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Posts Tagged ‘auto financing’

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Stimulus Provision Could Save Car Buyers Hundreds

February 20th, 2009 by Matthew C. Keegan | 3 Comments | Filed in Autos Express, Consumer Financing, Consumer Tips

The US car industry is in the worst shape since the early 1980s, with sales for some manufacturers off by more than 30% compared to a year ago. Credit has tightened by at the same time cash rebates and financing incentives have never been better. Truly, if you are in the market for a new car, truck, van, sport/utility or crossover vehicle, then taking advantage of these offers can save you thousands of dollars.

Tax Credit For New Car Purchases

new carNow the federal government is getting into the action as part of the $787 billion stimulus package signed into law by President Obama earlier this week. One provision in that package includes a $2.3 billion tax break for new car and truck buyers a move that could help consumers save several hundred dollars more on top of already deep discounts.

“This tax credit may make a new vehicle purchase more feasible for many consumers in the near future,” said Eric Hoffman, spokesperson for AWARE, a non-profit auto financing education group. “Auto buyers should educate themselves about financing before making a purchase. Shoppers should maintain a solid credit track record, and shop around for financing among several sources, including banks, credit unions, financing companies and auto dealers.”

Save Hundreds of Dollars

Taxpayers will be able to deduct both the local and state sales tax paid on new car purchases up to $49,500. The tax break will cover the purchase of any new car, domestic or foreign, through the end of 2009. Moreover, the deduction is treated as being “above the line,” which means that it reduces the amount of a filer’s taxable income. Eligible taxpayers must have an annual income below $125,000 for individuals or below $250,000 for families.

“Auto shoppers who are considering purchasing a car today or within the coming months should continue to educate themselves about the financing process,” Hoffman said. “Our research has shown that consumers who are educated and informed about the auto financing process are the most satisfied with their auto financing decisions.”

Free Tools to Help You Decide

Our sister site, SayLending.com offers consumers free tools to help them calculate how much car they can afford as well as monthly payments, interest rates and related loan terms. You can also get a free, no obligation auto loan quote to help you find the best rate on your new car. We always recommend that you secure your own financing before visiting a dealer to purchase a car, applying the cash rebate to your down payment while negotiating the lowest price for your vehicle.


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Forget December! Car Deals Abound In October.

October 14th, 2008 by Matthew C. Keegan | 1 Comment | Filed in Consumer Tips

After tallying up September 2008 new car sales, automotive manufacturers quickly concluded that waiting until December to run calendar year ending sales just wasn’t going to cut it, especially if they were to salvage something positive for the year. Bad news for manufacturers spells good news for Cadillac STSconsumers, especially for those new car buyers who can pay cash or have the credit to buy a new car.

Finding an excellent deal won’t take much effort as everyone is offering some sort of incentives right now including low rate financing, cash back, or both. Instead of focusing on specific deals, let’s take a look at some of the incentives currently being offered:

Cut Rate Financing — Zero Percent Financing remains one of the biggest draws for consumers and can be an excellent way for people to finance their cars. The finance arm of the automotive manufacturer will get you into a car and offer a loan from 36-60 months interest free (in a dwindling number of cases you may be able to find a 72-month term loan).  Most new car loans for people who have excellent credit carries an interest rate between 6-7%. This means that if you finance a $20,000. car loan for 48 months at zero percent interest, then your monthly payments would be $416.66, a savings of $60 per month compared to the prevailing loan rate of 6.5%. Over the life of the loan, you’d save $2880 in interest payments.

Cash Back – Instant savings is a huge appeal for some customers, especially those who have arranged their own financing or have the money to buy their car with cash. Any cash back offer that exceeds the savings of a special financing deal should be given consideration with even greater savings possible for people making an all-cash transaction. Typical cash back is at least $1000 right now with certain Jeep, Ford, and other truck models offering rebates of $4500-$7500.

Both — In some cases, an automaker will offer buyers a combination of cash back and cut rate financing. Large SUVs and big pickup trucks will sometimes offer both, but check the fine print: oftentimes the financing rate is higher and the rebate lower.

Which Offer Should You Take?

An automotive calculator can help you determine the best financing option for you. In addition, you may find that leasing offers a better deal, therefore compare lease/finance offers before heading off to your local dealership.

Though car makers are offering historically fantastic deals right now, those offers may not last especially as each company gets inventory trimmed down to meet customer demand.


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New Car Incentives Continue To Grow, Expand

July 3rd, 2008 by Matthew C. Keegan | 3 Comments | Filed in Consumer Financing, Money Management

Mitsubishi GalantThe rocky economy has something going for consumers, especially those in the market for new cars. End of model year incentives will be terrific, providing the opportunity for savvy consumers to save a lot of cash on their next set of wheels.

And, the model year doesn’t just change in October anymore. Throughout the year automakers are releasing new product, and slashing prices on the old. The best deals can be had with last year’s model which could still be a 2008 if the 2009 has already been released.

If you are planning to buy a new car, there are some thing you will want to keep in mind before making your purchase:

Do your research. Quite frankly, not all cars are the same. A Kia retailing for $14,900 and a Toyota priced the same share one thing only: price. The Kia likely is better equipped, while the Toyota has a better reputation. Check Consumers Report and pay the $6 they want for their advanced ratings and reviews, an investment certainly worth the price. Search online for additional information about that make/model.

Check for incentives. Almost across the board, all manufacturers are offering incentives. Popular models are typically not included, but then again the Ford Focus is on sale and carrying a cash back rebate that will vary upon your location. Last month, the incentive was $1500 on a car that gets 35 mpg! Use an automotive financing tool to help you compare offers.

Pay cash if you can. If you’re able to pay cash for your purchase, you should be able to negotiate the best deal possible while also taking the rebate. On the other hand, if both zero percent financing and cash back are offered, then finance your car for the highest amount possible. Then, take your cash and let it earn interest in a high rate savings account at ING Direct or elsewhere paying 3.5% or better on your money. Another alternative is to secure auto financing on your own and keeping the rebate.

One final thought as to why you should buy your car now: incentives are the strongest they’ll be for quite some time and some manufacturers are planning to increase the price of cars beginning this fall to recoup the cost of additional safety and technological improvements featured across the board.


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Unearthing Terrific Deals On Luxury Cars

February 11th, 2008 by Matthew C. Keegan | 4 Comments | Filed in Consumer Financing

Cadillac STSThe recent drop in car sales for the month of January 2008 (4.3% according to Autodata Corp. which tracks auto sales) wasn’t a surprise to industry experts. Mostly everyone is expecting that U.S. car sales would be off for the year, as much as 500,000 units perhaps even more.

Hit hardest are some of the luxury brands including BMW which saw its sales drop a whopping 22.2% over the same period a year ago. The reason for the drop? There may be several including:

  • Many people who would consider purchasing a luxury car are not normally luxury brand buyers. When the economy is good, they’ll opt for a premium brand. When the economy is flat or bad, they’ll either wait out the downturn or choose a less costly model. The Lincoln MKZ sedan is a nice car, but a Mercury Milan is essentially the same vehicle priced thousands of dollars less than the Lincoln; both sedans are sold in the same showroom.
  • Most luxury brands tend to be top heavy with fuel inefficient vehicles. People understand that today’s $3.00 per gallon for regular gasoline may jump to $3.50 or $4.00 by this summer. The rich don’t worry about surging fuel prices, but not everyone who opts for a luxury brand is wealthy. Besides, environmental concerns are starting to weigh in — who wants to be accused of driving a hog?
  • The luxury market is saturated. Just about everyone is selling luxury cars with even Hyundai poised to start selling its ultra-luxury Genesis sedan this summer. Mercedes sales were up for the month of January 2008, suggesting that BMW’s loss could be attributed, in part, to competition from its German rival.

All of this spells good news for the person who is shopping for a new car and who thinks that discounts for luxury models is a rarity. This may have held true as recently as 2006, but for 2008 buyers could save thousands of dollars off of the sticker price. However, you’ll have to do your homework as many of the special buys are not being advertised. Instead, the manufacturers are giving incentives to automotive dealers who may or may not share these discounts with you. Fortunately, if you take the time to do some research you could save an extra three to six thousand dollars off of the sticker price. Here is how you can arm yourself:

  • Edmunds — Edmunds.com is one of the most respected sites on the internet when it comes to new car reviews and pricing information. Edmunds will list the MSRP of a car in your area and then list the invoice price for the vehicle. In most cases, you can negotiate the price of your new car down to an amount closer to the invoice even lower if manufacturer incentives are uncovered.
  • Fighting Chance — For a fee, you can get all of the current information about the car you want by learning what the current pricing is for the car, incentives offered, holdbacks (secret incentives from manufacturer to dealer), as well as leasing advice, vehicle safety analysis, buying an extended warranty, and more.

The difference for most consumers is in the area of holdbacks, something that more than 90% of the vehicles sold today have but you aren’t supposed to know about. Get a portion or all of your share of the holdback and you’ll shave hundreds of dollars off of the invoice price.

Finally, if you get your lowest price and still need automotive financing, get pre-qualified for an auto loan in advance to secure your lowest rate. Negotiating on financing should never be contingent on the price of your car — you’ll want to get the best price first and handle financing separately.

Photo courtesy/copyright General Motors. Pictured: 2008 Cadillac STS


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