Much has been made in the news of automotive financing lately, as several American car manufacturers drop leasing as a purchase option and raise the credit requirement for people seeking to buy a new car through their financing companies. What was once a routine purchase has gotten quite a bit more complicated, leaving buyers confused and some fleeing to other brands.

A tough credit market and slow sales have also worked to shake up the auto industry, but for the person who wants to buy a new car right now, some of the best deals seen in years can be found.

Fortunately, where one door closes another one opens up or in this case other doors already in place are worth going through. If you plan on purchasing a new car before the calendar turns to 2009, then you’ll want to consider the following tips which can help make your transaction as trouble free as possible:

Select Your Model – Consumers who have their eye on a particular model but wonder if financing will be an issue should go ahead and choose that vehicle based on their desire to own that particular car. Chrysler Financial may not offer the best financing deal on your Dodge Challenger, but if you really want the car then get it – financing is a separate issue.

Shop Around – Year end sales are in full swing, but don’t be lulled into thinking that every car dealer has your best interests at heart. Shop several dealers, get their lowest price, and make sure that all incentives are included (military discount, recent college grad, etc.) along with the automaker’s deal and your dealer’s discount. Some dealers will plead poverty when you negotiate with them, but they’re getting their own rebates from the manufacturer when they sell a car to you.

Talk With Your Banker – Your own bank may be the best source for financing your new car, so before your wheeling and dealing gets serious, make a visit to your bank to see what offers are available for you. Banks are in the business of lending money and if your credit is good, then you could be just the right candidate for a loan. The same applies if you belong to a credit union. One note: if your banker isn’t offering you a good deal, then visit the competition to find out what they have to offer to you.

Alternate Leasing – For some drivers, leasing a car is their only option. With GM, Chrysler and Ford making it more difficult – if not impossible – to lease, what options do motorists have besides switching brands? Well, some savvy dealers are working with private leasing companies to come up with packages that might be attractive to you. Contact the financing departments of several dealerships to find out who they are working with, their rates, and other options available to you. If you finance or lease elsewhere, then manufacturer cash discounts are still available to you.

Pay Cash – If you’re in a position to pay cash for your vehicle but prefer to keep your money and finance your purchase, now may be a great time to simply pay cash. Cash is king and dealers know it. You’ll be able to get the maximum discounts from the manufacturer, have an excellent negotiating point with your dealer and be able to drive away in a new car that costs less than the person who had to have someone finance it.

Even if you choose to finance your car now, you aren’t stuck with the same loan for the next 48, 60, or 72 months. You can pay down your loan quicker or refinance your car loan later on when the financial markets stabilize and your personal financial outlook stabilizes. Year end deals makes buying a car now an attractive option, giving you the car you want at a price that cannot be beat.

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Tags: auto leasing, bank loan, banker, banks, car buying, car loan, credit union, leasing

The gloomy news affecting the economy right now can have you believing that absolutely nothing is going right. Even people who have long been accustomed to saying that the glass is half full are rephrasing their terminology to the negative glass is half empty expression, falling prey to what they see to be the prevailing sentiment.

Digging through the news you’ll soon learn that housing sales were up for the month of September while new cars sales are still about one million units, demonstrating that people with the means to buy something are taking advantage of lower prices and spectacular deals while they can. Indeed, before the economy does recover, finding a deal on a new car, trucks, minivan, SUV, or crossover vehicle can help you save thousands, but one problem could remain: how do you arrange financing?

Well, the folks at Carmax who happen to be the largest retailers of used cars in the country, have advice for their shoppers as well as for people in the market for new cars. We would all do well to heed the following financing tips, sage advice that can save you time, money, and headaches:

Maintain Good Credit

1. Maintaining a good credit rating is generally a matter of simply paying bills on time.

2. You should also be aware that overextending yourself on credit and actively shopping for credit could have a negative impact.

3. Know your credit history by getting a copy of your credit report. Check your credit report annually to see if any information on the report needs correcting. You can get a free copy of your credit report at www.annualcreditreport.com, You may also contact any of the three nationwide consumer credit reporting companies:

Equifax: 800-685-1111, www.equifax.com

Experian: 888-397-3742, www.experian.com

TransUnion: 800-916-8800, www.transunion.com

Know How Much You Can Afford

1. Determine how much you can afford for your vehicle purchase and monthly payments. Most financial institutions recommend that your monthly car payment not exceed 15% of your gross monthly income.
2. Maximize your down payment to lower your monthly payments and it may improve your offer and likelihood of approval.
3. Calculate how much your trade is worth and how much you owe on it to gain a better understanding of your total purchase. Go to any CarMax superstore for a free appraisal to determine the current value of your vehicle. CarMax will be happy to contact your current finance source for a payoff to help you determine your equity position.

Find a Car Retailer that Offers Competitive Finance Terms

1. Look for a car retailer that offers competitive finance terms without the hassles of negotiation.
2. Make sure the retailer shows you all available finance options. CarMax makes it quick, easy, and convenient to apply for financing and will show customers the details of all offers received so customers can make an informed decision.
3. Only buy a car from a retailer that offers at least a three-day payoff option. If you find a better offer or decide to pay cash after you take the car home, this gives you the option to pay off the financing with no fees or penalties.

Be Prepared at the Car Retailer

1. When shopping for a vehicle, take essential paperwork items with you, including the title and the registration for your current vehicle, your driver’s license and your insurance card.
2. Before signing any paperwork, review all the documents and understand all terms including vehicle price, trade amount, financing, warranties, return policies and fees.
3. Beware of any add-on or hidden costs not previously disclosed or explicitly requested by you.
4. Do not hesitate to ask lots of questions. Be prepared to walk away if you are unhappy with your car-buying experience.

Certainly, preparation is the key ingredient when buying a new car so go into any sales negotiation armed with the information you need to succeed. Creditors may have tightened things up for consumers with average or poor credit, but if your credit is good or excellent, you stand to find the best auto financing deal while saving big bucks on your purchase.

(Source: CarMax)

Tags: automotive financing, consumer credit, credit, financing tips, Loans, money, new car, used cars

The Chevrolet Volt will likely garner an IRS tax credit of $7500 for buyers when the car comes to the market in late 2010. Most hybrid models receive some sort of federal government credit, an allowance buyers should take into consideration when selecting a new car.

Federal Intervention To Help You Buy The “Right” Car

Never underestimate the federal government’s desire to steer consumers to purchase much more fuel efficient cars and get away from buying gas guzzling trucks and SUVs.

For the past several years, buyers of hybrid vehicles — those cars designed to run on either gas or electric power — has helped some consumers make the switch. As it stands right now most hybrids carry a price premium of $2500 to more than $10000 over the cost of a comparable gas-only powered car, making them only worth it for people who drive a lot. But, with an IRS tax credit of $250 to $3000 on select models, that differential is reduced, making hybrids a logical choice for more and more drivers.

Some Vehicles Qualify, While Others Do Not

Not every car qualifies for the tax credit as the IRS has created a formula which determines how much credit a car will get, if any. Some Toyota Prius owners have found themselves to be ineligible to receive a tax credit because the IRS phases credits out when a particular model sells more than 60,000 units in a year. The Prius is a popular car, but the US government doesn’t want to give industry leader Toyota too much help in this area.

Under consideration right now is a new legislative package which will offer even greater incentives to a new type of hybrid vehicle expected to become available by 2010. Plug-in hybrids, cars which can get the bulk of their energy from the electrical grid, are currently in the pre-production stage, most notably the Chevrolet Volt, a car with a range of 40 miles on electric power only. These cars will also be equipped with small gasoline engines to help extend their range, but the bulk of the people who will be buying plug-in hybrids will be commuters, particularly those whose commute falls within that 40 mile round trip range.

A Handsome IRS Tax Credit Coming

The federal package zipped through the Senate earlier this week, approved by a 93-2 margin. The house will be taking up the legislation shortly and is expected to pass the bill. President Bush is expected to sign the measure into law, paving the way for what will be a generous IRS tax credit.

Under the proposed legislation, plug-in hybrid owners will receive a significantly larger credit thanks to their vehicle’s ability to store more electricity than conventional hybrid vehicles. That credit will range from $2500-$7500, which will come in handy as the chief vehicle it was designed for, the Chevrolet Volt, will retail for about $40,000, some $15,000 more than a Toyota Prius. The price differential is due in part to GM using a lithium-ion battery to power the Volt while the Prius uses older technology, a nickel-cadmium battery.

Buy Now Or Wait?

For consumers wanting to save money on their next car purchase, the temptation to wait ’til 2010 looms large, especially if other incentives packages to buy a plug-in hybrid are announced. Some large corporations have talked about offering incentives to employees to purchase cars like the Chevrolet Volt including providing free recharging stations which could recharge employees cars while they work. This would be an attractive option for the person who lives beyond the Volt’s electric range, effectively allowing them to tap into the power grid while at work and again once they return home at night. Some states, including California, are studying additional incentives which will help ease the financial burden owners.

But, waiting until 2010 may not be right for every buyer, particularly for the motorist who needs a new car before that time. Fortunately, Honda will shake the market up again when its new Insight hybrid is released, a car with a proposed base sticker price of $18,500, not including IRS tax credit.

Regardless of what decision you make when buying your next car, hybrid vehicles are looming larger than ever before. Standard hybrids offer fuel economy numbers from 20 to 60 mpg, while plug-in hybrids push that figure up to the 150 to 250 mpg range. Clearly, reducing your pain at the pump is an excellent reason to consider hybrid powered vehicles and beginning in 2010, that picture suddenly brightens considerably.

Tags: Chevrolet Volt, hybrid cars, IRS hybrid tax credit, plugin hybrids, tax credits, Toyota Prius