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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.

China cuts car import duty to 15% in boost for foreign automakers

SHANGHAI -- China will steeply cut import tariffs for cars and components, the country's finance ministry said, opening up greater access to the world's largest auto market amid an easing of trade tensions with the U.S. Import tariffs will be cut to 15 ...

Published:  Tue, 22 May 2018 03:04:00 GMT



China cutting auto import taxes as of July 1

The Finance Ministry said charges for many imported vehicles will ... many economists said the impact of price hikes for users of the metals, including the auto and oil industries, would destroy more jobs than curbs on imports would create.

Published:  Tue, 22 May 2018 03:06:00 GMT



Trump Eliminates Federal Auto Lending Anti-discrimination Guidelines

The Senate approved the resolution last month along Republican party lines. Research shows black and Hispanic customers are often charged higher interest rates on car loans than white customers who have similar credit profiles. Then-CFPB Director Richard ...

Published:  Tue, 22 May 2018 02:34:00 GMT



Wells Fargo to expand auto lending

The San Francisco-based firm still likes that business, he noted. Wells Fargo decided to rein in car financing in mid-2017 and tighten underwriting standards. The decision came as a drop in vehicle resale prices made it harder for lenders to blunt losses ...

Published:  Mon, 21 May 2018 23:22:00 GMT



China says to cut auto import tariffs on July 1

China will cut tariffs on most imported cars to 15 percent from July 1, the finance ministry said on Tuesday following ... China currently restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies.

Published:  Tue, 22 May 2018 01:59:00 GMT



China cutting auto import taxes July

China has announced it will reduce auto import duties effective July 1 following promises to buy more U.S. goods and end restrictions on foreign ownership in the industry. The Finance Ministry said Tuesday that charges for many imported vehicles will be ...

Published:  Tue, 22 May 2018 02:42:00 GMT



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