If a driver crashes their car, their auto loan will be covered, but only if they have GAP insurance. Basic car insurance protects the owner’s investment in the car, but it does not extend to the cost of the auto loan. GAP insurance, or guaranteed auto protection, covers the monetary difference between the car’s actual cash value (ACV) and the amount owed on the auto loan or lease.
Auto Loans Questions
Sep, 4, 2013
Jul, 10, 2013
Yes, borrowers can pay off their car loans early, but it might hurt them. While paying off a car loan gets borrowers out of debt, it can damage their credit score making it more difficult to get another type of loan, such as a mortgage. It’s quite ironic considering that most financial advice says to pay off your debt as fast as possible, but haste can make waste as far as credit scores are concerned. Self-Injured By Early Payment
Jun, 10, 2013
Financially, the most contentious part of a divorce is usually the divvying up of assets between spouses. When it comes to auto loans, there are several factors that determine who the loan and, more importantly, the car, will be granted to. Do you live in a community property state?
Jun, 7, 2013
Borrowers can get an auto title loan even if they are behind on car payments. However, this is not a very wise financial decision. If borrowers are already behind on car payments then it means they are in a dire financial situation (or disastrously forgetful). Eric Counts, President of CreditNerds, told loans.org that if a borrower is behind on car payments it means that “either you are having money difficulties and are unable to keep up with the payments, or you are financially irresponsible.”
May, 15, 2013
Before approving an auto loan, lenders use a set list of criteria to gauge a borrower’s credit worthiness. The criteria include a borrower’s credit score, repayment history and overall credit history. Borrowers with high credit scores and reliable sources of income can count on receiving money easily and usually at a low cost. Those with low credit scores will have to pay more in interest on their loans, but borrowers with poor credit histories often have no access to financing at all.
May, 2, 2013
Yes, your parents can cosign on an auto loan for you. In fact, there are several benefits when parents do so for their child. Gail Cunningham, Vice President of Membership and Public Relations at the National Foundation for Credit Counseling, told loans.org that when parents cosign on car loans for their children, it could help their son’s or daughter’s financial reputation. “Assuming payments are made responsibly, this activity will help build a positive credit report for them,” said Cunningham.
Apr, 29, 2013
Experts recommend limiting your car loan term to 48 months or less, but there are some benefits to choosing a longer term length. In the last quarter of 2012, the average duration of an auto loan term was 65 months, or nearly five and a half years. Seventeen percent of auto loans issued that quarter lasted 73 to 84 months. These longer, subprime auto loans are a result of increased competition among financers to draw in more customers and increase profits. Longer auto terms mean smaller monthly payments for borrowers and bigger pay outs for financers.
Apr, 11, 2013
Yes, you can still get a car loan if you have a bad driving record. However, that poor driving record may still cause you problems down the road. When it comes to purchasing a car, driving records are not used when making a lending decision. In fact, it is not legal to deny an auto loan to an applicant simply because they have a poor driving record. Even DUI’s, the dreaded terminator of licenses, have no bearing on financial decisions made by car loan lenders.
Mar, 1, 2013
The decision of whether to continue repairing a used car or to buy a new one comes down to the individual consumer and their unique financial situation. Jonathan Kazary, general manager of New Jersey-based Kenwall Auto, said the decision to keep or buy is simple and straightforward. “If the owner is continuing to invest in ongoing repairs without seeing a light at the end of the tunnel, then it’s clear that is it time to buy — no matter if it will be a used or new car,” Kazary said.
Jan, 25, 2013
There is a time limit for auto loan debts on when they can no longer be legally collected. Debt collectors and lenders cannot sue a borrower once the financing in question has been statute-barred. A statute of limitations is the deadline for filing a lawsuit. But it can be difficult for borrowers to rid themselves of the burden. The time it takes for a debt to become statute-barred depends on the type of debt and the state in which it originated.