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      June 20, 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.

Trying to save money on buying a car? Shop for a loan first

With the cost to own a new vehicle rising, it's more important than ever to consider what you'll pay for a car loan and to shop for the best interest rate. The average new car loan interest rate ...

Published:  Tue, 18 Jun 2019 11:38:00 GMT



What to Know About No-Credit-Check Loans

When you apply for most types of loans, including personal loans, mortgages, and auto loans, lenders typically check your credit. They do this for one simple reason: Your credit is a good ...

Published:  Wed, 19 Jun 2019 06:37:00 GMT



Should I Pay Off My Credit Cards or Student Loans?

An auto loan at a reasonable interest rate is an example of a potentially good debt, because it allows you to buy a car, which gets you to and from work. I'd also put student loan debt into this ...

Published:  Wed, 19 Jun 2019 04:14:00 GMT



Before heading to college, learn these 6 things about student loans

Then, students are refunded leftover money to use for other expenses. Loan money can be used for education-related expenses only. "You cannot use it to buy a car," says Robert Muhammad, director of ...

Published:  Tue, 18 Jun 2019 02:02:00 GMT



Rachel purchased a $22,500 car three years ago using a 8 percent, 4-year loan. She has decided...

One common example of a transaction wherein we can use the present value of annuity is the purchase of automobiles. Considering the high amount of price needed to purchase it, buyers often enter ...

Published:  Tue, 18 Jun 2019 08:15:00 GMT



How to Refinance Your Car Loan

Do you continue to get offers about refinancing your car loan? You may be completely happy with your current car loan. It may be easy to make your monthly payments. Perhaps you received a fantastic ...

Published:  Wed, 19 Jun 2019 05:47:00 GMT



Shift Boosts Customer Financing & Insurance Options; Adds TD Auto Finance, U.S. Bank

SAN FRANCISCO, June 18, 2019 /PRNewswire/ -- Shift Technologies ("Shift "), an e-commerce platform on a mission to make car-buying convenient, fair, and accessible, today announced the addition of ...

Published:  Wed, 19 Jun 2019 05:03:00 GMT



Alliance Credit Union offering complimentary services for auto appraisals and loans

LUBBOCK, Texas-Now's a great time to get yourself the best financing options, with Alliance Credit Union offering free auto appraisals and pre-qualification auto loans. Take a look at this video to ...

Published:  Tue, 18 Jun 2019 16:10:00 GMT



Krungsri Auto asserts leadership in private car financing Announcing three-year compound annual growth rate of 25% and accelerating digital strategy

Krungsri Auto, a leader in automotive finance under Bank of Ayudhya PCL, asserts its position as the category owner of private car financing market with Krungsri Rod Baan achieving the compound annual ...

Published:  Sun, 16 Jun 2019 19:58:00 GMT



Carvana's Rapid Expansion Brings The New Way to Buy a Car to Four Additional North Carolina Markets

By removing the traditional dealership infrastructure and replacing it with technology and exceptional customer service, Carvana offers consumers an intuitive and convenient online car buying and ...

Published:  Wed, 19 Jun 2019 04:08:00 GMT



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