Auto Loans Questions

A deal just made with a handshake
Jun, 27, 2012
A car title loan is a type of financing wherein borrowers offer their car as collateral in exchange for money. These loans usually require no credit check and their applications are quickly processed. Car title loans are often used as cash advances since their average term is only 30 days. Similar to payday loans, terms can be extended but this can lead to a cycle of debt with the looming threat of repossession. While the amount borrowers can obtain varies, lenders will rarely agree to lend more than 50 percent of the securing car’s value.
Lender to borrower to dealership triangle.
Jun, 20, 2012
Indirect auto loans are loans that are sold by auto dealers to third parties—like banks—or other types of lenders. Buyers of indirect auto loans are known as "holders in due course." A holder in due course is entitled to receive principal and interest payments from a borrower. In indirect auto lending a dealer will usually collect information from borrowers and furnish it to banks. Banks can either accept or reject applicants, but they do so without ever coming into contact with applicants. Usually dealers package loans into bundles for purchase to potential holders in due course.
Hand holding cash for car keys
Jun, 4, 2012
In order for borrowers to determine whether buying a vehicle with cash is right for them, they need to consider the lost opportunity cost that will occur as a result of avoiding a car loan. Lost opportunity cost, sometimes referred to as the LOC, is the potential future growth on a sum of money that is lost as a result of that sum of money being used for a purchase. In terms of vehicle financing, the lost opportunity cost occurs as a result of money being diverted to the purchase of a vehicle instead of to a car loan.
Car lease sign
May, 8, 2012
Leases are an alternative route to taking out an auto loan and purchasing a vehicle. When consumers lease a vehicle, they essentially rent a car, as they pay a monthly bill in order to keep it. There are two primary types of car leases: open-end and closed-end. While they both operate much in the same way, closed-end agreements are what most consumers are familiar with. These allow consumers to “walk away” from the car lease when the term has expired, whereas open-ended agreements often require consumers to pay a fee the term has lapsed. Closed-End Car Leases
Luxury Car Interior
Apr, 9, 2012
While certain models may be cheaper without upgrades, “packed” cars are completely loaded with features. Most dealers who commit a “packed” car scam do not offer any models without the upgradeable features, thus forcing interested auto loan borrowers to settle for an upgraded model if they wish to purchase a vehicle from that specific dealership. Bait-and-Switch
Kickback
Apr, 2, 2012
Dealer reserves are the kickbacks that auto dealerships receive from banks for originating auto loans. When auto dealers get a buyer to finance a vehicle in the dealership, they mark up the interest rates to higher levels than a direct lender would. That way, the dealer ensures a kickback from the dealer for the extra money made on the auto loan.
Yo yo
Mar, 28, 2012
Auto loan yo-yo financing is a scam performed by some dealerships that is basically a glorified bait-and-switch routine. Yo-yo financing gives a consumer one price, only to call that consumer back into the office a few days later and inform them of an increase in price that they must agree to if they’d like to retain possession of their new vehicle.
Piggy bank calculating auto loans
Mar, 7, 2012
Whether a borrower is a freshly-licensed 16 years old with a minimum wage paying job or a seasoned automobile buff making substantial sums of money, a question any fiscally-minded individual should ask themselves is, “What can I afford?” The unfortunate answer to this question is that it depends. It depends on a variety of circumstances, each beginning with a prospective auto loan borrower’s monthly income. Then depending on how that income is allotted amongst their needs, wants, and savings throughout the month, the borrower should be able to determine how much he or she can responsibly afford.
Pencil pointing at "Refinancing" definition
Feb, 20, 2012
On an existing auto loan bill, the best way to reduce one’s monthly payments is to refinance. Refinancing a car loan is a process that involves negotiating with a lender, then taking out a new auto loan that covers the balance of an existing one, but at a lower interest rate. And as the auto loan in industry continues to tread far in front of the rest of the financing industry, obtaining one of these refinances is becoming easier and easier.  Done are the Days of High Interest Rates  
Motorcycle and car
Jan, 27, 2012
Unfortunately, auto loans and motorcycle loans are considered to be two different kinds of financing in lenders’ eyes. While the loans act in the same way, one cannot simply apply for an auto loan and use that money to purchase a motorcycle without their lender’s consent. This is because many car loan lenders don’t issue motorcycle loans due to the belief that motorcycles are riskier bets.  

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