That’s a good question. We hear it all the time. If you are considering financing a new Cincinnati car it is important to understand how your APR rate is created so that you can be more knowledgeable in your negotiations.
So what is APR?
How is it determined? It is important to realize how important your credit history is to understand how the APR is determined. The following factors are what determine your APR rate:
Current finance rates
Understanding your credit history is the first step in securing a lower APR. In this case, a higher credit score will improve your chances of not only getting approved for the loan in the first place, but getting a better APR.
Have a question about credit repair or financing? Ask any of your Cincinnati Car dealers in the Superior Automotive Group.
So, you’ve decided to look for a new car and have narrowed down your choices to the two or three you really want from your Cincinnati Car Dealers, the Superior Auto Group. At this point it is more about getting your money’s worth out of your dream car. When working with dealerships you’ll inevitably be financing your next vehicle, so trying to find the best deal on a monthly payment is just as important as the price on the sticker. But how do you find out which car to take if you don’t know how much it will cost?
This is where edmunds.com can really help you out. They have a auto financing calculator that helps you find out how to get the most car for your dollar. While there are many similar calculators online, each with their own pros and cons, I like the one from Edmunds because it allows you to calculate whether to go with the lower APR or cash-back if you have to choose between the two. Also, you can compare each vehicle’s average repair cost and see how much you can save by comparing gas consumption.
Whether you use Edmund’s calculator, or anyone else’s, its important to do the research before pulling the trigger on your next car purchase. It will give you a good idea of what your new car will cost each month, and whether or not you’ll need to budget around it accordingly. While your finance agreement may depend on other conditions such as the bank or dealership used, and prior credit history, these calculators will help give you a ball park figure for how much you can expect to pay month to month.
If you have any suggestions for other good online financing calculators, feel free to leave them in the comments. If you have any questions about financing or other payment questions, feel free to contact me at Superiorcars.com.
For those of you scratching your heads, “upside-down” means you owe more on the car than it is worth”. The Superior Auto Group knows this can be particularly frustrating for people looking to buy a new car in Cincinnati. If you owe more on your car now than it’s worth, the remaining debt gets wrapped into your new car purchase. Increasing the cost of your new car, but not necessarily the value.
This can be a vicious cycle for a lot of people. How do you stop it? Here are some ways to get out from under being upside-down:
Consider your automotive purchases more carefully in the first place. Look into the “residual,” which is the projected, future resale value. Even though they may cost more up front, vehicles with higher residuals are less expensive to own in the long-term because they depreciate less. Purchase mainstream vehicles. A higher trim level four-door sedan in a fairly common color will hold onto its value more than a lime green sport model with excessive customization. Unless you find a buyer whose taste in personalization is exactly like yours.
Resist the urge to keep buying new cars on a regular basis. Take care of what you have and hang onto it. Pay it off. If you’ve taken care of it, then it will bring more money when you sell it or trade it in. And if you’ve paid it off, you will then have some positive, rather than negative, equity. Spend a little time and money cleaning it up and ready for sale, but you’ll get more in the bargain. Fixing it up and spending a few Saturdays waiting by the phone can result in several thousand dollars in your pocket. If you don’t want the hassle, the dealership will be more than happy to take it in trade and make some good money on it.
Here’s an in-depth explanation on being “Upside Down”.
When looking to purchase a new car from your Cincinnati car dealership, potential owners have to first consider whether they should buy the car outright, or lease it for a term. There are certainly advantages and disadvantages to both. However, we’ve found out that in some cases, there is a little confusion in regards to what it actually means to lease a car. Watch the short video below, it provides a good definition and examples of what you can expect from leasing a car.
Regardless if you are looking to buy, or lease a new car, truck or SUV from your Cincinnati car dealer, you’ll want to get all of the facts about both options before your make your final decision. It could mean the difference of saving a couple of hundred dollars a month and getting a nicer car, or owning it out right after you’ve reached your payment term. If you aren’t sure what option bests suits you, call Mike Albert Direct and we’ll help you weight our options.
“So, how do I improve my credit score?” It’s not something you learn how to do in school and, to be honest, it’s sort of assumed that everyone just “knows” how the whole credit scoring thing works. As you can imagine, here at the Superior Automotive Group, credit is a major influencer of car buying. Here’s a quick, short explanation:
People who utilize credit, from credit cards to auto loans, have three standard credit scores tallied separately by the three major credit reporting agencies. The scores are known as FICO scores (Fair Isaac Corporation). The scoring ranges from 300 to 850. The most current national median score is roughly about 675.
Let’s say you need an auto loan but have a low credits score.
Here are a few key principles you can follow to raise your credit score.
1. The most important way to improve credit scores is also the least complicated. Pay your bills in full and on time. Your overall history of making payment on your current bills accounts for about 35% of the FICO score. Missing credit card payments or submitting the minimum due each month will immediately lower scores, as will any debt collections or bankruptcy filings that show up on your credit report.
2. Build up an active and lengthy credit history. Don’t close out all of those old credit cards! Keeping them open builds your credit history. This makes up about 15% of the FICO score. Keep a few dormant accounts active.
3. Don’t open new accounts within 60 days of making a major purchase. This results in about 10% of your score. Taking out new credit lines raises red flags because it makes you look riskier. Just be smart and think twice about your future purchases and what looks likely to take place over the next few months.
4. Maxing or topping out your credit cards will drop your score like a rock. Even using 50% or more of your limit can cause problems because it increases the risk that you may not be able to repay. If you have five credit cards with a $5,000 credit line each, for example, it’s not wise to carry a balance of more than $2,000 per card. It’s better to carry smaller balances on several cards than to pile everything onto one card.
5. Get a copy of your credit report and make sure your credit report is accurate. This is very important. Since credit scores are based on credit reports, it’s very important to make sure the information in your reports are fee of errors and fraud. Federal law gives you the right to get a free report from each of the major credit bureaus once per year.
6. Have a wide variety of credit experiences and loans, over time. This is called diversification and you’ll get credit for having a variety of loans. It’s better to have an assortment, including installment plans like auto loans or mortgages rather than simply credit cards.
Sounds simple enough. If you think you need help with your credit because you need a new car, see the any one of the Superior Automotive Group stores.
The Superior Auto Group reccomends that before you even pick out your new car, ask yourself this question, “Am I going to Buy, or Lease?”
We already know what it means to “buy”. You end up owning the vehicle outright, but should you be leasing instead?
When you lease, you pay an amount that is equal to the depreciation value of the vehicle during the time of the lease. Depreciation is the difference between the value of the car when the lease is signed and its value during the time the customer is driving the vehicle.
What type of leases are available?
There are two kinds of leases: open end and closed end. An open-end lease is mainly used for commercial vehicles. In this case, the lessee takes on all the financial risks of the vehicle because business vehicles usually accumulate more annual miles. The closed-end lease permits the customer to return the vehicle at lease end with no other responsibilities or financial concerns as long…as they have met the conditions on mileage limitations and/or excessive wear and tear.
When You Should Lease
When you want lower payments is the main reason. Nearly every lease agreement will mean lower monthly payments, sometimes as much as 60 percent lower. It also means a new vehicle every two to four years, depending on the terms of your lease. Plus, the fact that you are driving a newer car all the time, the maintenance costs are much less. Finally, you usually pay less sales tax because you are paying tax only on the payments made, not on the entire value of the vehicle.
When Not to Lease
If you think you will have to terminate a lease agreement before the term is up, DO NOT sign a lease contract. You will be smacked with hefty fees for early termination. If you drive great distances regularly…there are mileage limitations on the lease agreement know what they are. If there is uncertainty about staying within those limits, you should probably buy instead. Finally, if you have a tendency to be Fast and Furious with your cars vehicles, it’s best not to lease. There will be extra costs for excessive damage and wear and tear during the lease term.
This is just a basic explanation. Thanks to ehow for the referenced information.
To buy, or lease…that is the question. The Superior Auto Group has the answer!
If you are looking at buying a new car or truck, then you will most likely be financing. This means that looking at a car’s sticker price is just a guide for how much you will actually end up paying for your new vehicle. While the sticker price is an important factor, it is the monthly payments that really add up to what your car will actually cost you. While these two numbers are what most car buyers look at, there may be more to it than that.
To help consumers get a better idea of what they will end up paying in full for their car, Edmunds has released their Four Square program online. Here’s some more information about how it works from Inside Line:
If you’ve ever financed a new car, you’ve probably seen the foursquare. (Inb4 the “I only pay cash. Financing a depreciating asset is a terrible idea” crowd.) The foursquare is a worksheet containing everything from loan payments to trade-in price which “helps the salespeople view the total profit to the dealership while reviewing the separate elements of the deal.”
It’s also an area where people get roped into deals they weren’t expecting. It’s easy to get trapped looking only at monthly payments and not total price. But now Edmunds has launched a new foursquare-style Simplified Car Pricing tool that will give buyers a sense of what they’re going to see on the worksheet and the overall impact small changes will have.
If you want a big picture view of what a car will actually cost, then I would highly recommend using the Four Square. It will allow you to stay within you budget, as well as understand how much you will be for the life of your car. If you want to look for a new car to use the Four Square on, then be sure to stop by Superior Cars.
If you are looking into buying a new car, chances are you will need to finance it. But with so many different numbers and offers out there, how do you know which choice is right for you? Understanding how financing works, and what financing companies look at is a good way to figure out if you can afford that car you’ve been dreaming about or not.
With numerous offers from every dealership, it’s easy to get confused how much you may actually be paying for your new car. Rebates and interest rates mean different thing to you, the consumer, so it’s best to know what they mean. Also, before you go car shopping, make a budget for yourself. Understanding how much you want to spend every month on your car, and how long you want that contract to be, will help you make better decisions when at the dealership. Here’s more information from themoneyalert.com about financing options.
Check Your Credit First
Your credit will have the most significant impact not only
on your ability to get a loan, but also the amount of the
loan you receive. The better your credit, the more likely
you’ll get a high loan with a low interest rate. On the
other hand, if you have a low credit score, you might
get a high interest rate, a low loan amount, or even
Before you start car shopping, first check your
credit report to see if there is any negative information
that could prevent you from getting a car loan. Negative
information includes things like late payments, collection
accounts, foreclosure, or tax liens. You can order a free credit report by visiting www.annualcreditreport.com.
Rebates vs. Interest Rate Incentives
Often, you’ll see advertisements from dealers or manufacturers about rebates and interest rate
reductions on certain cars. Manufacturers typically offer rebates when they have a large inventory of a car
and they’d like to increase sales of that particular model. Interest rate reductions are often offered by
dealers and their financing companies to entice you to buy from them rather than other dealers.
If you’re choosing between a rebate and an interest rate reduction, the rebate will often result in the
lowest price, assuming the interest rate you ultimately receive isn’t much higher than the interest rate the
dealer is offering.
Typically, low dealer interest rates require you to have a good credit rating. Not only that, you often have
to agree to a shorter loan term, i.e. 24 to 48 months. Because the loan term is shorter, your monthly
payments are often higher than they would be if you were paying on your loan for a longer period of time.
How Much Can You Afford?
Before you start looking for car financing, you should know what size loan you can afford. First, decide
how much you can afford to spend on monthly car financing. Then, decide how many years you will spend
paying off your car. Multiply the number of years by 12 to come up with the number of months, e.g. 5
years X 12 is 60 months. Finally, multiply your monthly car financing amount by the number of months to
come up with the amount of loan you can afford. For example, $500 per month X 48 months, means you
can afford a car that’s around $24,000.
So be sure to know what you are getting into when you are looking for your next car. Knowledge is power, and being prepared will go a long way. If you are looking for finance options on your new car, be sure to let me know and we can get you behind the wheel.
Just because your credit is less than stellar does not mean that you can’t get a new car. In fact you really shouldn’t worry all that much about it. Russell over at Car Loan Pal explains how bad credit car loans are very prevalent in today’s society. Our economy isn’t at it’s best but there are still things you can do. We know you want a new or used car and trust me you don’t need to be so stressed out about it.
So you need a car but have bad credit? Don’t worry; bad credit car loans are highly prevalent in today’s world so you are not the only person in this boat as nearly 25% of Americans have issues with their credit. As long as you prepare yourself and follow the right course of action, you should be able to purchase the car you want as well as receive a bad credit car loan.
As I just mentioned, preparation is the key. Your first course of action should be to review your credit history so that you can ensure that there are no errors. There are many free credit websites out there you can use to help you.
The next important step to obtaining a bad credit car loan is to determine how much you can truly afford to pay for your car. It is absolutely essential that you be honest with yourself about how much you can afford and don’t let your eyes get bigger than your wallet. You should have a number in mind for how much you can afford for both a down payment and monthly payments.
Now that you have taken care of the preparation, you must be prepared to provide proof of employment and income so that the lender can have all of the information in front of them, which will facilitate your bad credit car loan. The lender may not always ask for these documents but it’s better to be safe than sorry when applying for a bad credit car loan.
Once you have followed the aforementioned steps, you must take extra steps in the future to ensure a clean credit history. You must make it a priority to make on-time payments for your bad credit car loan so that there are no bad marks on your credit history. You will also want to avoid car title loans or any other type of loan for that matter in the event that you need cash. It is much more logical to consider a refinance car loan.
If you still have questions about bad credit car loans, you can find answers and other great information on the CarLoanPal.com blog and through other mediums such as forums and reviews of companies. You can also get a lot of help through loan companies. Although your credit may be a little worse than you would prefer, these companies still want to be able to make loans work since that is how they make money so they will certainly be willing to discuss bad credit car loans with you.
So take a deep breath and don’t worry! You can still get a car.