Most all bad credit car loans are simple interest loans, which are best. You should avoid any offer for a front loaded loan. In front loaded loans, you pay most interest upfront.
Typically, bad credit car loan interest rates are based on:
Your credit history and score How long the loan term is, which is typically 3, 4 or 5 years The year and model of the vehicle The mileage on the vehicle Your debt to income ratio Your past car credit
Fortunately, there are flexible sources for bad credit car loans. Most new car loans are paid back over 5 years, whereas most used car loans are 4 years or less in length. The longer the length of time to pay back the loan, the higher the interest rate, in general.
The total amount financed vs the loan value of the vehicle is very important to a lender, if you have bad credit. The lender needs to have the security of being able to resell the vehicle for the amount owed, should the vehicle be repossessed. If the loan value is close to the amount financed, you are less likely to have negative equity.
There are many sources for bad credit car loans. You can use a dealership, local bank, credit union or online lender. Dealerships are a good option if you have good credit. It’s common that you’ll find the lowest interest rate, lower payments and less money required for a down payment, if you use an online lender. The reason for this is simply because there is more competition among lenders on the internet.
Whether you choose to get your loan approved through a dealership or online, it’s best to shop around for loan rates, just as you do for the car itself.
Posts Tagged ‘ Mileage ’
Sep
If you are looking for car loans than there are a number of options that could be open to you.
One of these may be to try an online car finance broker to help you find the most appropriate loan for your own circumstances out of the numerous car loans that may be available on the market.
Applying is straightforward
You’ll need to supply a few basic details about yourself and your employment. This will allow a decision to be made about just how much you could comfortably afford to repay on your car loan.
You can then use this figure as a guide when looking for your new car.
Finding your car
Some car loan companies online may have their own dealerships where you can select a vehicle. Others may allow you to extend your choice and also look elsewhere.
You may need to bear in mind that to use car finance facilities such as these, your chosen dealership may need to have a valid consumer credit licence. This may make this type of borrowing unsuitable for a car purchase from a private individual for example.
Once you’ve located a car that you like, you’ll need to let the loan company know a few basic details about it. This will include its registration, mileage, how much of a loan you’d need and who you are buying it from.
This will allow them to calculate the loan they are prepared to offer.
Market value
A car loan is typically based on the market value of the vehicle rather than the selling price.
This helps avoid situations where your loan has a greater value than the car itself.
What this means in practice is that the amount the lender may be prepared to advance you will vary depending on the actual car you’re interested. It may not be:
l as much as the guide figure you may have been given when you submitted your application
l enough to cover the asking price of the car.
You can always contribute to the purchase yourself or perhaps offer your old car as part exchange.
Car loans can help you keep mobile if you decide you’d like to upgrade your vehicle to a newer model. Applying is often easy and fast.
The insurance companies will always reward you for driving less. If you rarely put wheels on the road, the chances of a claim are small and all your premium will be “profit to the insurer. So how does this work? In theory, it could not be more simple. The insurance company looks at who you are, when you drive and where you drive in deciding how much of a risk you represent. If you live 50 miles from your work and have a daily commute along a busy Interstate, the chances of an accident are high. But if you live on a bus route to work and only use your vehicle for odd journeys at off-peak times, the chances of an accident are small. When you answer the questionnaire, you will see questions covering these possibilities. Remember, if you get caught out in dishonest answers, the insurer will cancel your policy and leave you without any coverage.
The first question is where you live. Although some states like California have outlawed setting rates according to your zip code, the majority of companies focus on your home address. If there’s a high accident or theft rate among people living in your area, you will all pay a higher premium. The only choice, if you can afford it, is to live some place where the crime and accidents rates are lower. You look for the middle ground between the worst inner city crime hot spot and a house on the prairie where you never see another vehicle from one day’s end to the next. All the discounts favor drivers who only drive off-peak during the day, and restrict their annual mileage. No more late night and early morning driving when the majority of other drivers may be tired or affected by alcohol and/or drugs. This raises the question of monitoring. It’s easy to answer the questionnaire and claim the maximum discounts. But the trend among insurers is to ask people to drop their vehicle in for a regular inspection of the recorded mileage. The maximum discounts are given to the drivers who agree to devices being installed which collect all the data on driving and transmit it to the insurers. These devices have a GPS element that records where you drive, the time and, in some cases, some measurement of the quality of your driving, e.g. how often you brake. The reward for accepting this invasion of your privacy can be discounts of up to 25% on top of the usual discounts. Obviously, it’s not a good idea to use your own vehicle to rob a bank since the insurance company will know you were there.
This set of discounts is somewhat frustrating. In the larger cities with well-developed public transport, it’s usually not too much trouble to get where you want on time without using your own vehicle. Assuming your vehicle is safely in a garage to reduce the risk of theft, you should break even or better, i.e. what you save on the insurance pays for your use of buses and trains. But the most of the US has poor public transport, so there’s little choice. Remember the car insurance quotes are not the final word. Call the company, explain your circumstances and discuss how you might qualify for discounts. In discussion, you often discover options not included in the website. So, treat the car insurance quotes as the opening offer and start negotiating. Investing a little time often saves you money.
With Alice back in Wonderland thanks to Tim Burton, we continue this series of articles on how to earn discounts when insuring your vehicle. This time, the trip down the rabbit hole (or through the looking glass as you prefer), deals with the practicality of your use of private transport. Remember the insurance companies want as little risk as possible so they prefer you to have the vehicle parked on your front yard where you admire it from a distance and, when it gets dusty, wash and polish it. In short, the less you drive, the more you save. So lets see how it works. There are three times during the day when accidents are more likely. These are the two main periods for commuting to and from work, and the late night and early morning when driving is often associated with alcohol and other “substances”. The statistics show the more vehicles there are on the road around you, the greater the chance one will collide with another. At peak times for commuters, the roads are suddenly full and the risks of accidents are high. Now change the weather from sunshine and gentle breezes to the first ice and snow of the winter. The majority of drivers have forgotten the risks, made no advance preparations and find themselves on a skating rink without any way of stopping in a hurry. The accident rate goes sky high until people relearn their winter driving skills. At night, its the reverse problem. From 11 p.m. through to the early hours, there are fewer vehicles on the road, but the majority of drivers may be less alert. At best, this is simple tiredness. At worst, its substance abuse and you are in the way.
So, if you agree not to drive at the most dangerous times, you get a discount. For the same reason, agreeing to restrict your mileage also earns a discount. If you only drive a few miles every now and again, the chances of you being involved in an accident are small. The lower the mileage you accept, the better the discount. For the same reasoning, where you drive affects the premium. Although the practice is outlawed in some states, your zip code sets the tone for the premium rate. Some areas of the cities and larger towns are statistically more accident-prone. Equally, if you live in a wilderness area or in a remote part of the prairies, you can go miles without ever seeing another vehicle. Collisions are therefore rare, although some trees are known to throw caution to the wind when crossing the road. Be honest with yourself. Do you have to use the vehicle? Yes, it may be slightly inconvenient to use public transport but, if you are saving money on your insurance, you can be safer and better off financially.
In an earlier article, we mentioned the problem of fraud. The biggest discounts are given to those prepared to prove their honesty. Check the auto insurance quotes for those companies offering monitoring, whether face-to-face or through technology. Some companies ask you to call in once a month to prove your mileage is within limits. Others have devices to fit into your vehicles that monitor when, where and how you drive. This information is then routinely transmitted to the insurer. Sure Big Brother is watching but, if this saves you big dollars, its worth searching through the auto insurance quotes to find these offers.