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      March 21, 2019

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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.

America's obsession with trucks and SUVs is helping push car-loan payments to a 10-year high

The average car-loan payment just hit a decade high, according to Experian data first reported by Automotive News. In the fourth quarter of 2018, the average car loan in the US was $545 a month for ...

Published:  Mon, 18 Mar 2019 08:09:00 GMT



US Car Loan Payments And Interest Rates Reach 10-Year High Thanks To Trucks, SUVs

The new vehicle market in the US is now facing the highest average car loan payment (along with interest rates) in a decade, mostly due to the surging interest in trucks and SUVs, according to Edmunds ...

Published:  Wed, 20 Mar 2019 08:03:00 GMT



How to maximize your auto loan program

While auto loans often hold a prominent share of a credit union's overall portfolio, some credit unions make the mistake of viewing indirect financing, leasing, and direct lending as entirely separate ...

Published:  Wed, 20 Mar 2019 00:30:00 GMT



Auto Parts Supplier BorgWarner Names New Finance Chief

Automotive parts supplier BorgWarner Inc. on Tuesday named Kevin Nowlan as its new finance chief, tasking him with cutting costs to cope with the car industry's headwinds in markets such as China and ...

Published:  Tue, 19 Mar 2019 08:28:00 GMT



FICO Survey: UK Car Buyers Shifting Toward Online Financing

In a new FICO survey, 21 percent of car buyers said they got their auto loan online, up from 15 percent last year 37 percent plan to find their auto loan online next time UK car buyers got their loans ...

Published:  Thu, 21 Mar 2019 02:14:00 GMT



Herring, other AGs criticize federal change on payday, car title loans

Could it be, just possibly be, that lobbying to protect high interest rate loans pays off That, in any event, is what Attorney General Mark Herring and 24 other top state law enforcement officers ...

Published:  Wed, 20 Mar 2019 07:52:00 GMT



Finding a Car Loan with Poor Credit in Los Angeles

When you have poor credit in Los Angeles, it isn't always easy finding a dealership that can help you get financed. If you're in the market for a car, but aren't sure how to improve your chances of ...

Published:  Tue, 19 Mar 2019 05:11:00 GMT



ON THE MONEY: How to avoid late auto loan payments as prices rise

DETROIT (AP) - New vehicle prices and interest rates are on the rise, causing millions of people to fall behind on their auto loan payments. But experts say you can avoid being one of them by ...

Published:  Tue, 19 Mar 2019 17:42:00 GMT



Money Matters: Refinancing a car loan

With interest rates still historically low, refinancing a mortgage can be a smart move: it can save you hundreds a month, or thousands over the life of the loan. But does that same logic apply to your ...

Published:  Sun, 17 Mar 2019 07:06:00 GMT



Lakeside Auto's Gabler locked out, spars with receiver

Defaults on millions of dollars in bank loans led to the takeover of Andrew Gabler's auto dealership by a court-ordered receiver in January. New court filings show that Gabler has since been frozen ...

Published:  Thu, 21 Mar 2019 00:02:00 GMT



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