March 23, 2018

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Are Auto Loans Through A Car Dealer A Good Idea?

The average cost to own a vehicle these days – including monthly payments, gas, insurance and maintenance – is over $10,000.

It is a hefty amount to put out each year, considering a vehicle is one of the worst investments a person can make. Unlike other investments, such as real estate, vehicles depreciate in value every year. From the minute you drive off the dealer’s lot, you’re vehicle already has lost about 10 percent of its value.

Knowing the facts and figures about owning a vehicle doesn’t stop people from having them. With public transportation in some areas lacking, vehicles are required to get around.

For most people in the market for a new or used vehicle, securing a loan to help finance the purchase price is necessary. While most auto dealers offer on-site financing as part of the convenience of doing business with them, it may not always be the best idea to opt for this kind of financing, as it usually is the most expensive option.

Auto dealers account for the source of nearly 80 percent of all new vehicle financing. But while auto dealers have a variety of financial institutions available with which to broker you the “best” deal, they also tend to add on hidden fees to earn a little extra money on the side for offering that convenience. Car dealers, by law, are permitted to tack on as much as 3 percent in fees to any loan it helps to secure for its clients. Many vehicle buyers are unaware this occurs, and assume the rate they are getting is based solely on what the financial institution offered the auto dealer.

Car dealers also are not subject to the same rules and regulations as other financial institutions when it comes to lending practices. In 2010, Pres. Barack Obama signed into law new legislation designed to protect consumers seeking loans from financial institutions. The law is intended to protect the consumer from unethical lending practices. However, it does not extend to car dealerships. Auto dealers also are exempt from other important consumer protection laws such as the Truth in Lending Act.

The Better Business Bureau reports that car dealerships are the most-reported industry for complaints it receives from consumers.

So are auto loans through a car dealer a good idea? The answer is a resounding no.

The best way to finance a vehicle is by securing a loan before you ever set foot on a dealer’s lot. One of the best places to start is with online auto loan companies. They usually have access to many bank car loan rates and can automatically compare these and deliver you the rock-bottom best auto loan deal. If you are a longtime member in good standing with your local financial institution, you may also visit them to see what kind of interest rate and maximum amount you are qualified to borrow.

Financing outside of the dealership will not only land you a better deal in the long run, but it also will help you to determine whether you can afford the monthly payments in your budget before you even step foot on a car lot.

It's going to cost us: As the Fed raises interest rates, the cost of credit cards, car loans and mortgages will rise

Americans are taking on more debt, and they're soon going to be paying more for it. The Federal Reserve on Wednesday raised its benchmark interest rate - to a range of 1.50 to 1.75 percent - citing an improving economy, low unemployment and rising wages.

Published:  Thu, 22 Mar 2018 14:15:00 GMT

Ally's auto finance platform to test digital service

Clearlane, Ally Financial's online auto finance platform, is launching a pilot of Clearmatch, a digital service that will approve customers for vehicle financing, connect them with participating dealerships and let them shop those dealerships' inventory in ...

Published:  Thu, 22 Mar 2018 13:55:00 GMT

OSCAR 2018-1 -- Moody's assigns definitive rating to OSCAR 2018-1 backed by auto loan receivables

SEE ALSO: Jerome Powell drops a major hint into the true state of the job market - and it suggests the Fed is making a big mistake »

Published:  Fri, 23 Mar 2018 00:51:00 GMT

Payday loans gone, but need for quick cash remains

"It's that they need baby food, to pay a utility bill to not have their water cut off, or get a car repaired." To limit defaults on payday loans, Tschetter said he self-regulated in that he performed pre-loan background checks and never loaned anyone ...

Published:  Thu, 22 Mar 2018 23:12:00 GMT

Auto Stock Roundup: Uber Crash Hits Self-Driving, SUP Tops, AZO Boosts Buyback

The partnership intends to finance, build up and manufacture self-driving systems ... Magna is likely to lead the manufacturing of the car and join Lyft's development team. In effect, Magna will lend its vehicle systems knowledge, manufacturing ...

Published:  Thu, 22 Mar 2018 21:28:00 GMT

The long road of car shopping

The seminar discussed buying a new car compared to a used one, information on negotiating and financing, gave students reliable research websites and suggestions on whether to buy or lease a vehicle. Nicholas Kilmer, assistant director for the ME Center ...

Published:  Thu, 22 Mar 2018 16:17:00 GMT

Axis Auto Finance : IIROC Trading Resumption - AXIS

IIROC can make a decision to impose a temporary suspension (halt) of trading in a security of a publicly-listed company. Trading halts are implemented to ensure a fair and orderly market. IIROC is the national self-regulatory organization which oversees ...

Published:  Wed, 07 Mar 2018 09:17:25 GMT

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