Car Finance Basics

There happens to be a lot of different things that people do no understand when it comes to getting yourself a new vehicle whether it is through leasing it or buying it, it still requires some information to know how it really does work. The thing that you should keep in mind the most is that a car dealership does not typically finance a car lease or a loan but in turn they will most definitely have some sort of impact on how much you will end up paying on your car financing.

One good thing to keep in mind is that a car dealership will always sell you a vehicle for cash in hand. These people are third party businesses that have purchased a franchise from one or multiple different car makers in order to sell the vehicles. They do not work for these car makers and always work for themselves. It is important to realize that the dealers buy these cars themselves usually through the use of a very large loan through a bank or another type of financial institution and as a result they are also charged rates of interest on these car loans. They then need to sell the cars off in order to pay off their initial loans as well as all of the other associated costs that come with running a car dealership.

Dealers will always get cash for a vehicle that they sell to someone, it could either come from the consumer himself, or some other financial institution that has loaned out the finances to a consumer in order to purchase the vehicle of their choice through an auto loan. People are usually under the misconception that they will be able to get a discount or a better deal if they pay for a vehicle in cash but this is not the case because they in fact will make more from raised interest rates and commissions if you go about financing the vehicle itself.

When a car dealership sells a vehicle to a consumer he will usually push onto them the typical bank or financial institution that they have working with them in order to get their financing settled. A lot of these dealerships will use some of the more well known and major financial institutions that have special deals with the car makers if you do not already have one and you would be paying an additional premium for that luxury. As a consumer however, you have the ability to bring on your own auto financing company if you would like to. The point of stating this is to make it perfectly clear to you that a car dealership does not finance a loan to a consumer at all. They will not process the loans or even take payments on the loans themselves, all they will do is take the application papers that you fill out and will try to arrange some sort of financing with companies that they usually work with for a small fee.

Now a dealer could go about checking your credit history, but this is not for the purposes of getting you the consumer a car or vehicle loan, but is done in order to figure out quickly whether or not the consumer would even be capable of getting a vehicle or if they have any serious credit issues that are currently outstanding. The dealer is not the financial institution and is unable to approve you the consumer for a loan. The financial institution that the dealership forwards your filled out application to will do their own set of credit history checks as well as check out your past payment history and your overall debt to income ratio. This check is a lot better done then what a dealer could possibly do so if you happen to have a dealer check out your credit and tell you that you are alright, they really may not have any idea at all so keep this in mind as well.

When the financial institution is done checking out your credit worthiness you will be classified in one of three types which are prime, near prime, and sub prime. Prime means that you have a great credit profile and have a higher score usually above six hundred and eighty, as a result of this you will be offered the best possible interest rates on your loan. Near prime usually will fall around the six hundred and twenty to the six hundred eighty mark and will usually mean that you could pay as much as four or so percent more then someone that has a prime score. If you happen to be below that and are considered to be sub prime then you are going to have some issues with finding a lending institution that will be willing to give you a auto loan and when you do end up finding a good one the rate of interest you will be paying is going to be very high.

You should also be aware that a car dealership has the ability to change the rate of interest that you would be paying on your car loan. One of the types of hidden fees that some shady car dealerships will try to include to consumers when they purchase or lease a vehicle is to mark it up so that your interest rate is increased regardless of your good credit score. This sort of markup can go up as much as two percent on your overall rate of interest and this particular markup of your interest rate will never be mentioned on any document that you would ever be signing. The car dealership will say that this increase can be considered justifiable because it helps them cover the cost of getting the consumer the financing they need but it is just additional profit or is used to make up for something they may have given to you somewhere else in the car deal. The most a car dealership is legally allowed to mark up your interest rate is by two and a half percent.

Something that a lot of people will ask when they go about getting a new car or vehicle is whether or not they are able to negotiate for their own rate of interest. In a lot of these situations you will not be able to negotiate the base rate of interest that a lending institution gives to you but you will be able to try and haggle down the markup that a car dealership tries to give to you. You should know that though some car dealerships practice this shady act not all of them take part in it. You should also realize that the better credit profile that you have the better rate of interest you will receive over all from the financial institution. So knowing what your credit profile looks like and shopping around on the internet is of the best things you can do for yourself before even ever walking into a car dealership.

Even if a car dealership does check your credit it really does not matter and this is a mistake that most people think occurs. Just because they said it looks good on their end it does not mean it is a done deal for you. When a consumer buys or leases a new vehicle with a car finance they will usually sign papers that state that they agree to purchase the vehicle using funds that are provided to them through a financing company and if they are not approved by the company the deal itself is considered nulled and voided unless they are able to secure another way of financing. Once this is done the car dealership is in no way again involved in the monthly repayment of the loan itself and is no longer responsible for it.

If you happen to have poor credit and come across problems trying to get approved for a vehicle because of your past payment history or debt to income ratio there are still a couple of things that you can do in order to get yourself that car of your dreams. Often times a co signer will allow you to get a vehicle without much of a problem. Other times a financial institution will ask for a large down payment to off set the high amount of risk that you have shown to them through your credit history. This will usually allow you to keep the same monthly payments while having the overall cost of the vehicle to go up. Even if a dealer lets you drive away with the car if the bank or financial company comes back to them denying the loan application the vehicle still will legally belong to them and they will require you to return it regardless of anything that you could have signed originally.

So when it comes down to it you should always know what your personal credit profile and score is before even walking into a car dealership just to make sure that you will not be startled when something goes down later on. The next thing you should do is to shop around for a good car finance that is flexible for all situations online before going into a car dealership so that you are prepared with money in hand in order to make sure that the car you are buying is yours and not the dealers. There are many different places to do this online and getting multiple quotes from different companies will allow you to find the best possible deal regardless of your credit history and situation.

If you have credit problems, repossession, bankruptcy, slow pays or are a first time buyer and in need of Car Lenders in USA. The car finance company offers the opportunity to buy a car on credit when you have been refused credit in the past. So, whatever the reasons - bad credit or no credit or bankruptcy, there is a good chance we can help you!



November 16, 2009
By Denis Dcosta
It's Fast, Free and Pre-Approved car credit program will try to secure the best auto loan and car finance available for you depending upon your current situation. Regardless of your credit history, our network of thousands of bad credit car lenders can help.

Car Financing

Why Are Japanese Cars so Popular at Auctions and Dealerships

Japanese cars are world renowned for building quality cars such as the cars produced by Honda. The high testing standards and quality roads underscores the Japanese culture of keeping cars in great shape. The attention, care, and pride, the Japanese take in their cars makes these cars popular at auctions and dealerships.

At auctions and dealerships one can find such cars from companies like Honda at very affordable prices. Auctions take place in nearly every country, including the United States. In Japan, auto auctions are held every day. When looking for a Japanese car at an auto dealership or at auctions, including online auctions, it is important that you look at the grade of the particular car that you are thinking about bidding on or buying. Grade 5 indicates the car is almost new while Grade 2 denotes a car that may not be in great shape. Some of the best deals can be found at a Grade 3.5 and higher.

One can acquire a good quality and high grade cars such as a Honda car that are very fuel efficient, have low mileage, and are of very high quality. These cars have been tested to meet Japan’s high standards so you know you are getting a great car. As well, you are getting great value for your money.

The best way of getting a great deal on a Japanese car is through Japanese auctions, particularly online auctions. There are over 100 auctions that are run weekly all around Japan. Each one can have anywhere from several hundred to thousands of vehicles that are up for auction. If you are a car dealer, it would be very beneficial to your business and your pocket book to register for these auctions. These cars can come fully equipped with Japan’s high tech equipment and can contain such features as air conditioning, power steering, electric windows and retractable mirrors, climate control, ABS and airbags, full electronics, CD players, and other quality features.

The benefits of buying Japanese cars such as those from Honda are great quality, reliable, economical, and meet the standards set by Japan which have the highest standards in the world. Because of the best roads and the Japanese’s Government encouragement of getting a new car every 6 to 7 years, Japan’s used car market is extremely popular. Most of these cars have great suspension, low mileage, and are in great condition. The overall condition for cars of similar age will be significantly better in Japan than in most countries. Many of these cars are never used to their full potential and often spend the entire time being driven short distances.

The general public can contact a professional to place a bid from their side and get an idea about the cost of used vehicles at an auction location. As well, the price of vehicles sold at dealer auctions tend to be lower than those advertised on a dealer's lot.

Acquiring a Japanese car has so many benefits that it makes for a great investment.



November 4, 2009
By Amy A Nutt
When looking for used cars in Toronto be sure to check out the massive selection of used Honda cars, trucks and SUV's at Formula Honda - your Toronto Honda dealership. http://www.formulahonda.ca

Honda Dealer

Tips On Looking For The Best Used Car Dealer

Buying used cars is a more practical way of avoiding a public mass transportation commute. However, with the industry’s numerous car dealer options, lack of education could lead you straight into a bad car deal.

So how do you know who to trust? Which car dealer is best to transact business? Here is some useful information on searching for the best used-car dealer.

1) Reputation: This is the most vital in choosing car dealers. Making business deals with fair, honest and accommodating car dealers is easy as long as you find a reputable dealership. You should check with the local Better Business Bureau for car dealers reliability report and you could ask relatives and friends for past car dealers they dealt with that guarantee satisfaction.

2) Services: Finding the best car dealers should not be the only factor to consider. Make sure the services the car dealers provide are appropriate. These services include:

* Check and check out – Most car dealers provide express maintenance and service appointments to its customers.

* Car loans - Some extend their services by handling or providing assistance with your financial needs.

* Service rates - Each car dealership has various service discounts. Service rates may vary depending on the name, location, other benefits, and negotiations.

* Warranty – Some car dealers offer free extended car warranties when you purchase used cars or service and examine vehicles from them.

3) Price range: Most people assume that the price you pay is for the whole vehicle. This is not the case when doing business with car dealers.

Majority of dealerships include “add-ons” that may include window tinting, car accessories, CD changers, paint protector products, undercarriage coatings, car interior accessories and many more. Some dealers may try and force the customers into purchasing them usually install the add-ons.

If these additional accessories would be an advantage for you, it might be a blessing. However, if you prefer to purchase the car alone, check to see the car you wish to buy if it includes add-ons refrain from paying additional for each.

Extra fees such as dealer handling and dock fees are charged to set up a used car for sale, maintaining the car and preparing needed documents for the car sale. These extra fees could be negotiated since all of these services would only provide additional profit for the dealer.

Aside from a respectful, dignified and honest dealer, consider these factors in choosing the best car dealer. You may be purchasing a used car, but by looking for the best person to assist you, it will lead to a good investment.



September 30, 2009
By Gregory Ashton
Gregory Ashton, your resident automobile enthusiast, bringing to you over 20 years of vehicular passion, and expertise; presents for your approval his insider secrets on selecting, buying, and maintianing the car that is ideal for you. http://www.best-car-buying-tips.com

Car Manufacturers Need To Be More Pro-Active To Beat Whiplash

Car manufacturers are not doing enough to help protect against whiplash. Statistics show that in America a rear-end crash occurs every 17 seconds. One of the most common injuries sustained in these types of accidents is whiplash. Whiplash occurs when the force of an impact causes a person’s head to move rapidly forward and then snap back. This action can hyperextend the neck and damage the nerves and ligaments, resulting in ongoing pain and stiffing of the neck. Whiplash can occur even if a crash takes place at low speeds of around ten miles per hour.

The good news is that a lot can be done to protect against whiplash injuries. One simple way would be to install adequate head rests and seatbacks for all passengers, which can reduce the effects of whiplash by providing support to the head. However car manufacturers seem reluctant to spend money in this area, as most car safety reports focus on other areas of importance, most likely because whiplash injuries are very rarely fatal.

But although the injuries may not be fatal they can still cause a lot of discomfort and may result in vertebrate in the neck fracturing and ligaments becoming severed. Later on in life accident victims may suffer from arthritis in the neck as a result of the injury. Every year in America around two million claims for whiplash are filed, with roughly 10 percent of these injuries so serious that they will result in long term damage.

Car manufacturers need to pay more attention to developing headrests and seats that will minimise the effects of whiplash. However this is a challenge, as there is no one sizes fits all and an effective headrest and seat needs to accommodate people of all different shapes and sizes. In addition there needs to be flexibility in the system to allow people to tailor the headrests to their needs, so that they get the maximum benefit. This is especially important for tall people, who are at a higher risk of suffering severe whiplash injuries.

While the car manufacturers need to ensure that the vehicles they produce are as safe as they can be, drivers and passengers need to do their bit as well. Most head rests are adjustable and correct positioning will help prevent severe whiplash. The problem is that most people do not know how to alter their headrest, or what the best position is. In addition many people don’t have the time to change their headrest, or don’t even think that it can help them if they had an accident. Education is required to help drivers and passengers understand the value of making sure that their head rest is currently positioned before driving, just like they ensure they put on their seatbelt.

Cars produced in 2009 will have to meet new federal requirements which concentrate on reducing neck injuries. This rule came in 2005 and aims to bring American car manufacturers up to the standards of their European counter parts. Hopefully this will force the car industry to realise that whiplash can be a life changing injury and more needs to be done to prevent it from occurring.



May 20, 2009
About the Author/Author Bio
Danielle is an author of several articles pertaining to No Win No Fee, Compensation Claims, Personal Injury Claims and other legal articles.
Article Source: http://www.articlesphere.com/Article/Car-Manufacturers-Need-To-Be-More-Pro-Active-To-Beat-Whiplash/142114