Bad Credit Blog

No one wants or expects to get duped by a car dealership. Unfortunately, it happens more often than it should. If you’re in the market for a new vehicle, protect yourself by recognizing the most common car dealer tricks and traps.

Scams happen on the car lot everyday. These aren’t the clever and amusing schemes you’ll see in movies like Catch Me If You Can or Matchstick Men. Car lot scams are nothing more than simple, petty tactics used by unethical dealers to trick you into spending more than you have to. You can avoid this by being Pre-approved before going car shopping .

Dealers love to say that they’re looking out for your best interest; but they aren’t always sincere. Here are some things to watch for:

VIN etching. Your dealer might recommend having the car’s windshield etched to deter theft. Not a bad idea, but politely decline if he wants to charge you a premium for the service. You can buy a VIN etching kit online for $20 to $30.

Loan guaranty. Ignore any claim that your dealer makes about paying off your loan if you find yourself unable to meet that obligation. If you default and the dealer pays it off, you’ll end up owing money and fees to the dealer instead of to the bank. Either way, your credit rating will be shot.

Affordable payments. Some dealers will want to negotiate with you on the car loan payment , rather than on the price of the car. They might say that they’re trying to make it more affordable for you. But it’s more likely that they’re trying to confuse you into paying too much. What’s another $1,500 when you’ve already agreed to pay $25,000? Some dealers like to strong-arm you into paying more by adding in fees after you’ve already agreed on a price. Here’s how they do it:

Dealer prep. Every dealer will try to charge you dealer prep costs. Your job is to know ahead of time what the standard costs are for that car by checking an Internet site, like Edmunds.com. Try to negotiate these as low as possible. And never pay more than another dealer would charge, or more than what’s listed on the sticker.

Extended warranty. It’s your decision to purchase or not purchase an extended warranty. Period.

Bait and switch APR. You buy the car and take it home. A week later, you’re notified that, due to a problem with your loan approval, your interest rate and monthly payment are being increased. The bait-and-switch APR scam is one of the most frustrating tricks a dealer can pull. Avoid this by arranging for financing before you walk into the dealership.

In this storyline, it isn’t the con artist who’s the clever one-it’s you. Keep an eye out for the warning signs and head for the door if you suspect someone’s trying to rip you off.

Ref: MortgageLoan.com

BY: Catherine Brock

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What is a car loan refinance? A car loan refinance is a similar concept as refinancing a home . When you refinance a car loan, you pay off your current car loan and replace it with a refinance car loan with a new lender at a different (generally lower) rate. If you have purchased a car and were given a loan with a high interest rate, you may want to think about refinancing your auto loan for a lower interest rate. Refinancing your existing car loan can save you money each month by lowering your car payments.

Is an Appraisal Needed to Refinance a Car Loan?

Some people think an appraisal is required to refinance their auto loan. This is not true. When you refinance your home, you do need to have an appraisal since the loan is based on the equity in the home. With a car loan refinance, the loan is based on how much money you need to pay off your current car loan, not on the value of the car.

Bad Credit Auto Loan Refinance

If you had credit problems, refinancing a car loan might be a good option for you. You may have accepted an auto loan with a high interest rate because of a bad credit history . But, if you have maintained a stable job since you bought the car and have been making consistent, on time payments for a year or more, you may be able to lower your current interest rate. It’s worth looking into it.

Car Refinance Example

If you financed a car loan for $20,000 over 5 years at an interest rate of 17.32% APR, the car loan payments would be $500.50 per month. If you were able to refinance this auto loan after twelve months and decreased the interest rate to 12.43% APR, the monthly car payment would drop to $457.80. By refinancing your auto loan, you would save $42.70 per month. This equates to a savings of $2,049.60 over the remaining 48 months of the loan, assuming all of the installments were paid on their due date.

HSBC Auto Finance HSBC Auto Finance is a leading provider of financing for new and used vehicles and has products that serve the full spectrum of credit consumers. HSBC Auto Finance originates or refinances auto loans through direct solicitations, the Internet and alliances. They are one of the top auto refinance companies in the US. If your interest rate is above 12% then give HSBC Auto Finance a call and see if they can get you a lower interest rate today!

For more credit help, please visit our site. We have been there and know how bad credit can affect everything, including your health. Take a look!

If you know someone struggling to quit smoking we found a great site that offers genuine  help. You can Quit!!

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As interest rates drop, people’s thoughts turn to refinancing - refinancing their home loan, that is. What they don’t know is that refinancing an auto loan is easier to do, and it can save you some serious money.

How much? Say you bought a new car six months ago. And say there were a few dings on your credit so the dealer told you that your auto loan would be 11% on a five-year loan for a $23,000 car. Your monthly payments are $500.

Now let’s say that you surf the web until you find a company that offers auto refinancing. You could refinance the balance of your car loan and lower your payments to about $400 a month. That’s a savings of nearly $6,000 over the life of the loan!

Other examples could well be more dramatic. In some cases, a new-car buyer could wind up with an auto loan based on an 18% interest rate. By refinancing at a competitive rate, the monthly payments would be slashed, and all it takes is about 10 minutes to fill out the application.

So what kind of consumers should consider refinancing their auto loans? An industry expert I spoke with identified the four types and gave them each a name:

The Saver: This type of customer is always keeping an eye on the Fed (Federal Reserve) and when interest rates drop, he begins shopping for a way to improve his personal financial picture. He may also consider refinancing when his credit score has improved, which could enable him to qualify for lower rates.

The Newly Educated Remorseful: A car owner may have recently bought a new vehicle and financed it through the dealership. Then, a neighbor or friend innocently asks, “So what interest rate did they give you?” The car owner goes back to her contract and finds that the dealer made a pretty penny on her by marking up the interest rate by several percentage points. Buyer’s remorse sets in…and the search for a new auto loan begins.

The Budgeter: This customer may have bought the car on a short-term loan — say, two years. The payments are high but affordable. Now suppose this customer’s economic picture changes — he buys a house, for example — and his monthly expenses shoot up. He looks at that auto loan and wants to spread the payment out over a longer period of time. Refinancing the auto loan is just the ticket to do that.

So, if refinancing is such a great move, why don’t more people do it? Possibly, they anticipate the same kind of application-heavy process found in refinancing a home loan. Or it could simply be that people don’t know it is possible. After all, the only risk is the 5-10 minutes it takes to fill out the application. Make sure, however, that no points are charged for the refinance process.

Remember, as the federal interest rate drops, auto loan rates follow. Why throw that money away paying interest? Join the wave of the future and refinance that auto loan today!

Ref: www.Edmonds.com

For more credit help, please visit our site. We have been there and know how bad credit can affect everything, including your health. Take a look!

If you know someone struggling to quit smoking we found a great site that offers genuine  help. You can Quit!!

Here is a great site for some wonderful Christian articles, short stories, plays, family stories, Bible studies etc. Check it out.

So your old car has finally bit the dust! You knew it was coming it was just a matter of when. The time has come to replace the old run down car with a new one.

Most of us have been there and done that so we can identify with your dilemma. However this situation is yours exclusively so you will have to answer certain questions to figure the next move. If it has been quite a while since you went car shopping you may suffer “sticker shock” when you shop. Let’s see if we can help you make this easier. After all life is hard enough without any extras thrown in!

If it has been awhile since you filled out a credit application here are some things the lender will be checking.

• Your credit score
• How much money you make
• Where you work and how long you’ve been employed there (two years of steady employment is what they are looking for)
• Your current credit cards and their balances according to the credit report
• How often you make on-time payments vs. 30, 60, 90 days late – and how recent were the late payments
• Whether you own your home or rent

The first two things are easy to prove. If you don’t know your credit score you will want to find out so you won’t be surprised or embarrassed. You should order a copy of your credit report to check for errors and fix those. There are three agencies (Equifax is the largest) that gather data from creditors. This information is then used to tally your credit score. They use a complex system and we explain that on our site . But the credit agencies make mistakes - sometimes lots of them - so you need to check your report for these errors.

We strongly advise getting pre-approved for your loan unless you like the headaches associated with shopping for a new car. Being pre-approved guarantees the amount of the loan and also guarantees the interest rate you will be charged. Then when you go shopping, tell the sales consultant how much you are approved for (and stick to it) because they will try to talk you into something that costs more money and of course a higher rate of interest if they arrange financing and higher monthly payments because they will make more money on the deal.

Check your local paper for pricing and the internet, but be sure to get pre-approved first so you will know how much you can afford.

Study our articles on car negotiating and verbal sales tricks that dealerships use to confuse you and get more money from you. (Car Negotiating Verbal Tricks) (Car Negotiating The Four Square)

For more credit help, please visit our site. We have been there and know how bad credit can affect everything, including your health. Take a look!

If you know someone struggling to quit smoking we found a great site that offers genuine  help. You can Quit!!

Here is a great site for some wonderful Christian articles, short stories, plays, family stories, Bible studies etc. Check it out.

So you need a new car but think you can’t get one.

Why not?

A friend of mine said that to me the other day and that’s exactly what I asked him – Why not?!

He and his wife had been late on a couple of credit card payments and he thought that this would make banks “laugh him out the door.” Not wanting to be humiliated he was not even willing to try.

If you are in the same boat, “let not your heart be troubled.” We have some great news; you can qualify for the car of your dreams and not break the bank to do it.

Here’s some simple steps to help you get the best deal on your next new vehicle.

Order a copy of your credit report. That’s not earth shaking news but that is the first step. You have to know where you are in order to know how to get how to get where you want to be. Order one here for free: Click Here.

All right, you have your credit report – what do you do with it? You carefully read it and check it for errors. Nearly 80% of credit reports contain errors; which means yours has a very good chance of having mistakes. Look for the most common mistakes - creditors paid off that still show as open, accounts that are not yours, loan balances or amounts owed that are not correct.

Highlight the errors. I love highlight pens; they are wonderful. Highlight anything that is wrong. You have the right to challenge anything that you feel may be inaccurate, untimely, misleading, biased, incomplete or unverifiable (questionable items). If a credit bureau can’t verify the accuracy of a disputed listing, then it must be removed from your credit report.

There are two approaches you can take next. If you are in NO HURRY you can write and challenge every questionable item and wait because this will take some time. The reporting agencies receive thousands of letters and from the time they write to the lender you are challenging there will be at least a 30 to 45-day period. You may or not get the item corrected. OR YOU CAN TAKE THE 2nd OPTION.

You can hire a professional law firm to dispute and have them removed for you. A law firm carries more clout than you or I do as individuals. PLUS they guarantee results. We have thoroughly investigated this field and know that there are many companies willing to take your money - but in the end you get absolutely nothing in return. That’s not the kind of credit repair we are talking about. We are talking about guaranteed results from a major, reputable law firm – period! That’s why we recommend (and ONLY recommend) Lexington Law .

Now that your credit is clear of errors, it’s time to get financing for your new vehicle.

There are several ways to get financing for a new or late model car. But let’s just look two for the sake of time.

Walking into a dealership and applying for financing after you’ve selected a car. This is the #1 way to guarantee that you’ll pay more interest than you have to! As ex-car salespeople we know all the tricks a dealership will try to pull. From lying to you about your credit score (because they get a percentage of the interest rate, so the higher the better for them), to telling you that you’re “approved” when in fact, you aren’t! (After you leave the dealership they’ll send your information to all the major banks and hope one approves you. Then they call you back to ‘resign” the contract and often your payments are $50 or more higher than you originally agreed to!)

The way to guarantee that you are getting the best deal is to be pre-approved for your loan first. With pre-approval you know exactly how much you are approved for, take the check to the dealer of your choice, make your selection and drive out. With this system, and it’s so simple you will wonder why you didn’t think of it yourself!

Major Tip: Don’t let the dealer tell you they can get you financed for more car! Remember they have a vested interest in the deal and they are NOT looking out for you. Once you’re pre-approved shop within your budget. Try it – apply for pre-approval now!

We have already written on how to avoid getting caught in an upside down car loan and ripped off at the car dealership – see “You Can Get A Bad Credit Auto Loan, But What Then? Know Your Stuff Before You start shopping !” This article and others like it are on our website and blog and we hope you will read them before you purchase your next vehicle.Since both my daughter and I have sold cars and have seen the problem from the inside we know, you can’t say too much” about this problem.

Of course one of the very best ways to get the best rate on either a new or used auto is to be pre-approved BEFORE you go car shopping. This is important because it puts you in the drivers seat as far as interest, amount of the loan etc. All the factors that can cause you to have an “upside down car loan.”

“Upside down” is the term car dealerships use when you owe more money on your car than it is currently worth. Everyone knows that a new car depreciates when you drive it off the lot - and we accept that - but you should not pay one penny more than you have to in either value or financing!

With any kind of new loan, whether home or auto, the borrower is paying more on interest than on principal for the first two or three years. That’s just a fact you can’t avoid. If you start out owing $20,000 on a car loan and are making $500 payments, the interest each month for the first year or so is $300 or more, so less money is applied to the actual amount borrowed during this period. Hence, having an “upside down car loan.”

While everyone is upside down the first year or so, we’ve both seen people 3 and 4 years into a loan and still severely upside down. Why? Because they were so enthralled with the “something new and shiny” syndrome that the salesman was able to convince them to buy that new car before they really sat down and thought about it.

There are several ways you can keep this from happening to you.

Before you go shopping know how much you can afford per month and the type of vehicle you want. Do your comparative shopping on the internet ahead of time so you are educated on pricing.

Contact a lender and get pre-approved for the loan. We have lenders on our site that will pre-approve you then give you a blank check and a letter to take to the dealer.

To avoid becoming “upside down” on any loan it is best if you can put at least 20% down. This will probably mean that you purchase an automobile lower down the food chain than you really want. A $25,000 car would require $5,000 down to accomplish this but a $12,000 car would only require $2,400 down. If 20% is not possible get as close as you can.

Down payments also “pre-purchase” the warranty and gap insurance so that they aren’t part of the payments. This way you are ONLY paying on the car, and not on those extras that don’t really ad value to your car, but are important to have.

Finance the loan for the shortest time you can afford. I can personally remember when 60 month loans were becoming popular. Now of course they are longer which keeps you in debt longer. If you are not pre-approved a lender will often try to “trick” you into stretching your payments out longer to make them smaller, when what you really want is for the lender to lower the price of the car to make your payments smaller!

Give serious thought to GAP insurance. GAP insurance covers the difference between what you owe and the car’s blue book value in case of an accident that totals the car. So if your car is worth $10,000 and you owe $12,000 you are on the hook for the remaining $2,000 when the insurance pays you off and that could be huge!

Consider purchasing a used car instead. Since most of the depreciation has already occurred your car will hold its value longer. You can qualify for a pre-approved used car loan just as easily - as long as the mileage is 50,000 or less. A car that sold new for $17,000 will sell 1 to 2 years old for $13,000 used which is much closer to it’s true, current value.

Sell your old car yourself instead of trading it in. If you can afford to wait for the money you can usually get more on the street than you will at a dealership.

The biggest way to keep from being upside down on a car loan is pre-approval . That makes all the difference!

By Dewey Kearney