How To Save Money On Your Next Car

Finding the right car at the right price can be quite a difficult task. This is especially true if you are looking for something specific, great on gas, and something you won’t have to worry about breaking down on you. If you’re looking for tips and tricks on how to save money on your next car, you’ve come to the right place. This article will help you do just that, and make sure that you get the most out of your next car purchase.

One of the first things you should consider when looking to buy a new car is what you need in your car. If you’ll be travelling and commuting a lot, you may want to look for a car that has great gas mileage. If you have a big family, you’ll want something with a lot more room, so that everyone can ride together if need be. All your specific needs are incredibly important in making sure that you make the right purchase when it comes to your next car.

Next, you’ll want to look up certain cars that fit your criteria, as well as ones that you like. Finding a long lasting car, even though it may be a bit more expensive up front, will end up saving you big money in the long run. It’s important to consider these factors when purchasing a car, because it all makes a difference in how much your car costs in the long run, which can dramatically go up and down depending on the quality of car you buy.

You should also consider travelling to buy your new car. You’ll want to take someone with you so that you can both drive back, but it’s a great idea to save money this way because some states have lower taxes and you’ll end up paying a lot less. This is also true for states that have more cars in smaller spaces, making the demand much less and the price of cars cheaper. This is a great way to save money on your next car, but you will also have to figure in the price of travel. Shop Orbitz today for huge savings on your trip.

Tesla – On Its Way To Michigan?

You may or may not know that Tesla has been selling cars in New Jersey.  Recently, the FTC has once again put its focus on Michigan. Three staff members recently wrote an eleven page letter to Michigan state Senator Booher. The issue at hand is a recent law in Michigan that bans direct sales of cars, which is the only way Tesla sells cars.

The three FTC members wrote the Senator to say the FTC supports the movement to allow direct sales to consumers. While these three FTC employees may not express the views of the entire commission, it shows the mindset of the commission is leaning in favor of direct sales.

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How Does it Work When You Trade in a Car?

Trading in a car is simple, but you easily can be taken advantage of if you do not arm yourself with a bit of knowledge beforehand.

Finding Trade-in Value of Your Vehicle

The first step in trading in your car should be a search on the internet or, if you are old school, a trip to the library. The search is so that you can arm yourself with an approximate value of your vehicle before you go to a dealership. The two most reliable sites to visit are Kelley Blue Book ( and the National Automobile Dealers Association ( Both companies publish book versions of their value charts for those of us who prefer something we can put our hands on.

Vehicle Condition:  Being Honest with Yourself

The values are based on the condition of the car, so you will need to be honest with yourself about your car’s condition. If it has a couple of small dings where a shopping cart hit it, you may claim good or better condition. If it has a dent the size of a basketball, you cannot. Seem silly to say that? There are people who are attached to their car and assume it is a great specimen, when in fact it has in excess of 200,000 miles, leaks like a sieve, and only starts if you hold your tongue on the right side of your mouth while standing on your head when you turn the key. These people are very surprised when a dealership will only offer salvage value for the vehicle.

Sticking to Your (Price) Guns

Now, once you have a value in mind, it is time to go shopping. Granted, even if you carry a copy of NADA Guides into the showroom with you, the salesperson is going to try to lowball you. Haggling is great fun to some, but a nightmare to others. Stick to your guns as much as possible, give a little if need be, but be prepared to walk out if the dealership does not come close to what you want.

How Trade Equity Impacts Your Purchase

Once you have agreed to a trade-in value, the loan process begins. If you do not have a current loan, it is simple. The agreed upon value (trade equity) is deducted from the agreed selling price, then you either pay or finance the balance. If you have an existing loan, there are two scenarios. In the first, the trade-in value is greater than your balance, so the difference between your agreed trade-in value and the loan is deducted from the sale price. In the second, you owe more than the vehicle is worth. In that case, the trade-in value is deducted from your loan balance. Any balance that is still remaining is added to the sale price of your next car and you must either pay for the total of the two or finance that total.

Issues with Loan-to-Value Ratio (LTV)

If you have a loan balance that must be carried over to the new car, you may find it difficult to finance the new vehicle because of the negative equity created. One of the most weighted aspects of a vehicle loan is its loan-to-value (LTV) ratio. Major lenders will not approve a loan that exceeds 115 percent of the value of a vehicle. You can learn more about how LTV works here.

Fortunately, there are loan sources other than major banks. Credit unions may allow you to carry a higher LTV. Even if a credit union denies your loan, do not despair. There are many online specialty lenders who look more at your personal situation than at the LTV of a vehicle.

How Long Should You Finance Your Next Car?

How Long Should a Car Loan BeThere is no hard and fast answer to how long you car loan should be. There are several factors to consider, the main one being what you can afford without destroying your budget. Here are a few key points that may help you decide the ideal car loan length for your situation.

Payment vs. Total Price

When you look at a car, the first thing a salesperson will ask is ”how much of a payment can you afford?” That question is meant to get you to focus on monthly payments instead of the total purchase price. It also helps a salesperson steer you toward a longer loan term for a more expensive vehicle. The thinking is that as long as the monthly payment meets your needs, you may buy a more expensive vehicle, adding to the dealerships profit margin and the salesperson’s commission. As the buyer you need to focus on the total purchase price in order to avoid paying an excessive amount of interest over the life of a loan.

Higher Interest Rates

The longer your loan term is, the higher your interest rate is going to be. In some cases the rate can double just by adding 12 months to the loan term. Take this example for instance. The national average APR for a 60 month note was 2.69 percent in early 2013. All factors being even, extending that same loan to 72 months brought the APR to 4.9 percent. On a loan of $25,000 for a new vehicle, you would pay an extra $2,158.57 in interest and the monthly payment was only $44 cheaper.

Negative Equity

Everyone knows that your car will lose value immediately after purchased and will continue to do so for at least three years. You will be upside-down on the loan during that period, there is no way to avoid it. If you have a loan that lasts longer than 60 months, the added interest and finance charges will cause you to remain upside-down even longer. Depending on how quickly the vehicle depreciates, you may have negative equity in it for as long as five years.

With negative equity comes the harsh reality of not being able to recoup the balance of your loan when you trade the vehicle in. So, if you want another new car before this one is paid off, you will be forced to finance the remaining balance of the original loan as part of your new loan. By doing that, you guarantee that you will have negative equity in the new car for an extended period of time. Additionally, if the balance on the original loan is too high, you may not be able to get approved for another loan until the balance is paid down.

In my opinion, you should never finance a new vehicle for more than 60 months or a used vehicle for more than 48 months. If you opt for a loan of this length, coupled with a reasonable car payment amounting to no more than 10% of your gross monthly income, you will be in a good position to finance your next car.

2014 Dodge Charger Pursuit Police Car is America’s Fastest AWD Sedan

Criminals in Michigan have got it tough. Not only do they live in Michigan, but they also have to be on the constant look out for the Michigan State Police who are now driving the 2014 Dodge Charger Pursuit, which has just won the title of being America’s fastest all-wheel-drive car.

At this year’s Police Vehicle Evaluation at Grattan Raceway, the Michigan State Police got the AWD Dodge Charger Pursuit to set a time of 1:33.85, which is so fast that it is less than a tick of the second behind the 1:33.70 record for rear-wheel-drive cop cars set last year.

The talking heads at Chrysler are predictably pleased with the time posted by the the HEMI-powered sedan housing a 370-hp V8 engine. “With the record-holding rear-wheel drive Dodge Charger Pursuit and now the fastest-ever recorded all-wheel drive model, Chrysler Group offers those who protect and serve us with the best pursuit-rated sedans in the business. And with the only test cars achieving lap times less than 1:34, Dodge Charger Pursuit highlights the segment’s best combination of world-class technology, acceleration, braking, handling and dynamics” said, Peter Grady, Vice President of Network Development and Fleet for Chrysler.

GM Warren Plant Builds 2 Millionth 6-Speed Transmission

Word out of General Motors Warren Transmission Operations facility is that its busy-bees have built their two millionth six-speed transmission. In celebration of the marked accomplishment, the General Motors Foundation is giving a total of $70,000 in grants to a number of organizations in Warren, MI, to include the Warren Symphony Orchestra, Family Youth Interventions, the Big Brothers/Big Sisters of Metropolitan Detroit, Macomb Science Olympiad, Clinton River Watershed Council, Winning Futures, Judson Center, and Warren Lions Club. This foundation is on pace to grant $1.6 million to community-service organizations in the 45 cities that are home to General Motors’ plants and facilities.

General Motors places the six-speed transmissions into many vehicles to include the Buick Enclave, Cadillac XTS, Chevrolet Traverse, Chevrolet Equinox, Chevrolet Impala and Chevrolet Malibu, GMC Acadia, and GMC Terrain.

Michigan-Based Credit Acceptance Corp Posts Strong Q1

With sales force and loan terms increasing, Credit Acceptance Corp is on the rise. With a 9.8 million dollar increase in net income in comparison to last year’s first quarter, the company has proudly reflected on its accomplishments. Loan contract terms have reached a competitive length of 48 months, in comparison to the past’s 36 months, which now gives Credit Acceptance Corp a tactical advantaged to expanding its edge on the competition. A redesigned focus that’s geared towards positive collections and dealer support adds hope for a promising future. Such hope aspires that in four years this quarter will be viewed as the great launch off that birthed great future success.

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Ally Financial To Continue Leasing Support Of Chrysler vehicles

Although Ally Financials exclusive agreement with Chrysler automaker expired on Tuesday, the company will continue its leasing support. The big change coming in the future will be that Ally Financial will no longer arrange subvented leases for Chrysler vehicles but rather this will be handled by Chrysler Capital. The new private-label, full-service lending program was created by Santander Consumer USA and Chrysler.

The Chrysler subvented originations declined since the second quarter of last year when the company posted a recent-high of $0.7 billion. Although Ally Financial reports an overall normalization of its financial based primarily on higher dealer stock prices. So far, Ally is on track with its company financial projections for the year.

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Peninsula Credit Union Auto Loans: 1.99% APR for 24 Months

It is important that new and first time car owners be able to purchase the car they want, and doing so may at times require them to take out a short term loan to buy the car of their dreams. Peninsula Credit Union is able to offer well qualified individuals short term 24 month loans with a fee of 1.99%, providing the time and funds necessary to acquire the desired vehicle. Short-term auto loans like these result in higher monthly payments, but borrowers end up paying much less in total interest.

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VantageScore 3.0 Gives 27 Million More Consumers a Score

Recently, VantageScore Solutions LLC released their new product VantageScore 3.0, and the author of this article takes a gander at what this could mean for consumers. Some of the updated changes including easier ways to interpret your credit score and protection when a natural disaster occurs.  They have also loosened criteria to allow 27+ million more consumers to have a score.

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