How to Easy Finance a Car

How to Easy Finance a Car.

You’ve found the car of your dreams. Now what do you do? How do you get the money for it? When an individual decides to buy a new or used car, he or she often needs to finance part of or all of the vehicle’s price. Because cars are such a big purchase, many buyers can't provide cash down for the vehicle, so they choose to finance a car over a period of time. There are two financing routes you can choose to go down — either getting a direct or a dealer loan. Before you choose to finance your next vehicle, you should do your homework to ensure that you get the best deal.


Method 1 Doing Your Homework.

Find out how much you can afford up front. If you know the ballpark value of what you want to pay for a vehicle, and how much you can afford to pay in cash, you will know about how much you will need to finance.

Maximize your down payment. A smart way to finance a car is to get as much of a down payment as you can. The more you can pay at the beginning of a deal, the less you will have to pay in interest. Even if you have to temporarily sell some assets to buy the car outright, that can be a better deal than financing a major portion of the cost.

Know your credit score. Much of the financing offer for a car is based on your credit score. Those with good credit will get better interest rates and cheaper car financing offers. This is important no matter who you finance your vehicle through.

Find out your credit score either through the dealer or online at websites like www.annualcreditreport.com, www.freecreditscore.com, www.creditkarma.com, or www.myfico.com.

If your credit score is higher than 680, you are considered a prime borrower and are eligible for the best interest rates available. The higher your score, the better bargaining position you will be in.

Compare loan rates online. There are many websites that compare deals at no cost. Additionally, it is a great way to get in contact with various companies.

Get the necessary materials together. Most lenders will want your name, social security number, date of birth, previous and current addresses, occupation, proof of income, and information on other outstanding debts.


Method 2 Getting a Direct Loan.

Contact certified lenders. Local and national banks, as well as credit unions can give you the terms and interest rates they are offering on used car loans over the phone and online. Shop around and find the best rate for you. You don't have to apply for financing through the dealer, though you certainly can. Oftentimes you can get a fairer deal when you figure out your financing first before you walk into the dealership. Apply for financing through a bank or an app that connects you to lenders.

Oftentimes, credit unions have the lowest interest rates, especially if you are a member. Check with your employer to see if they have any connections with local credit unions for you to take advantage of.

Many lenders offer 5 year loans on vehicles that are five years old at most. Older vehicles are often only eligible for 1 to 2 year loans. In many cases, the fear is that an older car will break down and then borrowers will default on their loans.

Additionally, lenders often impose mileage restrictions (often 100,000 miles) and will not finance salvage-titled vehicles. Typically, they will only fund loans for vehicles purchased through a franchised dealership, not through a private party or independent dealer. In these cases, you’ll have to get a deal loan. See below.

Solicit rate quotes from several lenders. The interest rates offered on used car loans are generally 4 to 6 percent higher than rates offered on new car loans. This is because lenders are fearful of financing used vehicles.

Be as specific as possible with a lender. Provide the lender with information about the vehicle you choose. You will need to provide the car's make, model and VIN number, among other things. The more detail you can give the lender, the more firm your rate quote will be.

Talk to lenders about any fees or extra charges. Some lenders offer low interest rates and make back the money by tacking on additional fees and charges to a loan deal. You'll want to know about these, as well as any other specific loan agreement aspects like prepayment penalties, which can trigger fees if you pay the loan off early.

Get prequalified. Fill out the paperwork ahead of time. Many banks or lenders will pre-qualify you for a car loan based on your credit score, the type of car you plan on purchasing, and your driving history.

Ask the lender with the best rate offer for a pre-qualification letter. It should outline the terms and conditions of the loan. Bring this letter with you to the dealership when shopping for the car. When you go to the dealer's lot, you can show them evidence pre-qualification from a reputable lender. This will expedite the car buying experience. It will also tell the car dealer you are ready to buy.

If you haven’t prequalified, you can get financing at the dealer's lot for a one-stop shopping experience, but having other lender alternatives helps you to get the best deal.


Method 3 Getting a Dealer Loan.

Get a loan through a new or used car dealer.

In general, interest rates offered by dealerships are higher than interest rates you can find directly from a lender. In many cases, smaller dealerships work with third party lenders to finance your vehicle. Because they play the middleman, they pass off the costs to you. Therefore, you may want to apply for a direct loan first and cut out the dealership middleman.

In some cases, financing lenders like local banks and credit unions won’t take a chance on used cars. For used cars, most dealers will finance used cars they sell, regardless of its age. Therefore, you may want to apply for a dealer loan if a direct lender denies you financing.

Bring leverage. Bring interest rates from direct loan lenders, even if you plan on financing with the dealer. Dealers are more likely to offer lower interest rates, if you show them that you know what other lenders are offering. Make sure you research competitive interest rates based on your credit score.

Offer a down payment in cash or trade equivalent to at least 10% of the vehicle's purchase price. The larger the down payment, the less money you will have to finance and the less interest you’ll have to pay on that loan.

Tips.

If you have a low credit score, consider asking someone with a high credit score to co-sign on a loan. A co-signor with a high credit score may help you to secure a lower-interest loan.

If your loan application gets rejected, don’t feel bad. Most likely, the lender doesn’t think you are able to pay back the loan on time. Reassess your budget and try again or try a different lender.

Warnings.

If you finance a used car, be prepared to pay for comprehensive insurance on the vehicle, which is more expensive than collision insurance commonly applied to used cars. Lenders require that you carry comprehensive insurance to protect their investment. Lenders often fear that if you damage the car, you will default on the loan, so they make you take out better insurance.

Be wary of dealers who advertise financing with "no credit check." Typically, these car lots sell high-mileage vehicles with inflated down payments and interest rates.

November 22, 2019

how to easy finance a car

How to Easy Finance a Car.

You’ve found the car of your dreams. Now what do you do? How do you get the money for it? When an individual decides to buy a new or used car, he or she often needs to finance part of or all of the vehicle’s price. Because cars are such a big purchase, many buyers can't provide cash down for the vehicle, so they choose to finance a car over a period of time. There are two financing routes you can choose to go down — either getting a direct or a dealer loan. Before you choose to finance your next vehicle, you should do your homework to ensure that you get the best deal.







Method 1 Doing Your Homework.



Find out how much you can afford up front. If you know the ballpark value of what you want to pay for a vehicle, and how much you can afford to pay in cash, you will know about how much you will need to finance.

Maximize your down payment. A smart way to finance a car is to get as much of a down payment as you can. The more you can pay at the beginning of a deal, the less you will have to pay in interest. Even if you have to temporarily sell some assets to buy the car outright, that can be a better deal than financing a major portion of the cost.



Know your credit score. Much of the financing offer for a car is based on your credit score. Those with good credit will get better interest rates and cheaper car financing offers. This is important no matter who you finance your vehicle through.

Find out your credit score either through the dealer or online at websites like www.annualcreditreport.com, www.freecreditscore.com, www.creditkarma.com, or www.myfico.com.

If your credit score is higher than 680, you are considered a prime borrower and are eligible for the best interest rates available. The higher your score, the better bargaining position you will be in.



Compare loan rates online. There are many websites that compare deals at no cost. Additionally, it is a great way to get in contact with various companies.



Get the necessary materials together. Most lenders will want your name, social security number, date of birth, previous and current addresses, occupation, proof of income, and information on other outstanding debts.









Method 2 Getting a Direct Loan.



Contact certified lenders. Local and national banks, as well as credit unions can give you the terms and interest rates they are offering on used car loans over the phone and online. Shop around and find the best rate for you. You don't have to apply for financing through the dealer, though you certainly can. Oftentimes you can get a fairer deal when you figure out your financing first before you walk into the dealership. Apply for financing through a bank or an app that connects you to lenders.

Oftentimes, credit unions have the lowest interest rates, especially if you are a member. Check with your employer to see if they have any connections with local credit unions for you to take advantage of.

Many lenders offer 5 year loans on vehicles that are five years old at most. Older vehicles are often only eligible for 1 to 2 year loans. In many cases, the fear is that an older car will break down and then borrowers will default on their loans.

Additionally, lenders often impose mileage restrictions (often 100,000 miles) and will not finance salvage-titled vehicles. Typically, they will only fund loans for vehicles purchased through a franchised dealership, not through a private party or independent dealer. In these cases, you’ll have to get a deal loan. See below.



Solicit rate quotes from several lenders. The interest rates offered on used car loans are generally 4 to 6 percent higher than rates offered on new car loans. This is because lenders are fearful of financing used vehicles.

Be as specific as possible with a lender. Provide the lender with information about the vehicle you choose. You will need to provide the car's make, model and VIN number, among other things. The more detail you can give the lender, the more firm your rate quote will be.

Talk to lenders about any fees or extra charges. Some lenders offer low interest rates and make back the money by tacking on additional fees and charges to a loan deal. You'll want to know about these, as well as any other specific loan agreement aspects like prepayment penalties, which can trigger fees if you pay the loan off early.



Get prequalified. Fill out the paperwork ahead of time. Many banks or lenders will pre-qualify you for a car loan based on your credit score, the type of car you plan on purchasing, and your driving history.



Ask the lender with the best rate offer for a pre-qualification letter. It should outline the terms and conditions of the loan. Bring this letter with you to the dealership when shopping for the car. When you go to the dealer's lot, you can show them evidence pre-qualification from a reputable lender. This will expedite the car buying experience. It will also tell the car dealer you are ready to buy.

If you haven’t prequalified, you can get financing at the dealer's lot for a one-stop shopping experience, but having other lender alternatives helps you to get the best deal.







Method 3 Getting a Dealer Loan.



Get a loan through a new or used car dealer.

In general, interest rates offered by dealerships are higher than interest rates you can find directly from a lender. In many cases, smaller dealerships work with third party lenders to finance your vehicle. Because they play the middleman, they pass off the costs to you. Therefore, you may want to apply for a direct loan first and cut out the dealership middleman.

In some cases, financing lenders like local banks and credit unions won’t take a chance on used cars. For used cars, most dealers will finance used cars they sell, regardless of its age. Therefore, you may want to apply for a dealer loan if a direct lender denies you financing.



Bring leverage. Bring interest rates from direct loan lenders, even if you plan on financing with the dealer. Dealers are more likely to offer lower interest rates, if you show them that you know what other lenders are offering. Make sure you research competitive interest rates based on your credit score.



Offer a down payment in cash or trade equivalent to at least 10% of the vehicle's purchase price. The larger the down payment, the less money you will have to finance and the less interest you’ll have to pay on that loan.





Tips.

If you have a low credit score, consider asking someone with a high credit score to co-sign on a loan. A co-signor with a high credit score may help you to secure a lower-interest loan.

If your loan application gets rejected, don’t feel bad. Most likely, the lender doesn’t think you are able to pay back the loan on time. Reassess your budget and try again or try a different lender.

Warnings.

If you finance a used car, be prepared to pay for comprehensive insurance on the vehicle, which is more expensive than collision insurance commonly applied to used cars. Lenders require that you carry comprehensive insurance to protect their investment. Lenders often fear that if you damage the car, you will default on the loan, so they make you take out better insurance.

Be wary of dealers who advertise financing with "no credit check." Typically, these car lots sell high-mileage vehicles with inflated down payments and interest rates.

November 17, 2019

How to Find a Buyer for Your Annuity

How to Find a Buyer for Your Annuity.

Although an annuity is meant to provide steady income, particularly when you retire, there are circumstances under which you might decide to sell your annuity. For example, you might decide to sell your annuity in order to buy a home, invest in a business, or to cover the costs of an emergency. Perhaps you've done the math and discovered that your annuity isn't the best most profitable option for you, and you'd like to reinvest. To find the right buyer for your annuity, look for buyers who can give you the terms you desire. If time permits, get competing offers rather than going for the first buyer you find.

Part 1 Evaluating Your Annuity.
1. Determine whether or not your annuity is transferable. If your annuity is not transferable, then you cannot sell it under any circumstances. Check your contract to see if it is transferable. If you are trying to get immediate funds, list your nontransferable annuity as an asset or form of income and apply for a bank loan.
2. Determine if your annuity is a structured settlement. Check your contract or consult your accountant to learn about the laws in your state. Most states have laws that protect people trying to sell their structured annuity. If your state has a Structured Settlement Protection Act, your transaction will have to be approved by a state court. The Periodic Payment Settlement Act protects those who received a cash sum as a result of personal injury and wrongful death lawsuits, from spending the awarded money too quickly, which may then force them to turn to public assistance to meet their needs.
Don’t try to sell a structured annuity by yourself, especially if you are living in a state that does not have a structured annuity protection law. Talk to a trusted broker and attorney before you proceed.
3. Evaluate your annuity. Before you shop around for annuity buyers, find out what the resale value of your annuity is. Hire an accountant if you are unclear on the details of your investment and its relative worth. Keep in mind that selling your annuity always result in your receiving a lower amount of money from your annuity. You will get a lump-sum payment that is adjusted with a discount rate, meaning that you'll get about 8 to 14 percent less than you would if you waited for the payments.
4. Understand the tax implications of selling your annuity. All annuities offer tax-deferral from the time of your initial investment. Your distributions, however, are taxable. This means that your annuity grows tax-free in the accumulation phase, but is taxed as distributions are made to you. These payments are taxed as ordinary income.
Gains made by selling your annuity before it matures are taxable as ordinary income. However, losses on the sale are not tax-deductible as investment losses.
If you withdraw from an annuity before age 59.5, you are also charged a 10% tax penalty. However, exceptions are made in various cases, such as the death or disability of the annuity holder.
You can also trade your annuity for another qualified annuity contract without paying taxes on the first annuity. These "1035" exchanges can be tricky, so check with a tax accountant or investment adviser before proceeding.

Part 2 Finding a Buyer.
1. Search for potential annuity buyers. Your best source for locating a potential buyers is the insurance agent that first sold you the annuity. They understand the market well and will likely have contacts for this sort of transaction. Additionally, they may also charge you a reduced commission for finding a buyer, as you already paid them a commission when you purchased the annuity. Alternately, you can search for an annuity buyer online. Before working with any of these companies, make sure that they:
Have positive, independent reviews of their services.
Have excellent customer service.
Can make a competitive offer for your annuity.
Are licensed to conduct business and follow all appropriate regulations.
Communicate timelines and figures in a transparent way.
Recommend that you first consult with a financial professional before selling.
Try checking with the Better Business Bureau (BBB) to identify whether or not the company is reputable. Companies with poor ratings from the BBB should be avoided.
Some reputable buyers of annuities include JG Wentworth, Catalina Structured Funding, Peachtree Financial, and Stone Street Capital. These companies can be contacted by phone or through their respective websites.
2. Hire a broker. If you are having trouble finding potential buyers, or if you can't find the price you think is reasonable, hire a broker. You’ll have to pay a brokerage fee, but you may stand to gain from the expertise of the broker's negotiations. Choose your broker carefully. Check their certifications to ensure that they are licensed to negotiate the sort of sale you want to make.
Ask the broker you want to hire for a quote. If they quote you a percentage, calculate it before you agree.
Look up the name of a broker you haven't worked with before. Any violations or complaints they have might be online.
3. Get offers for your annuity. Try to obtain offers from at least five companies before you choose. When you find companies online, use their quote form to get a free quote from them. A quote is not necessarily the amount you would receive, and it may not include the fee that may be deducted when a settlement is reached.
When you fill out the free quote form, give them only the standard information. Your name, email address and the name of your annuity should be the only information they ask for.
Do not give your social security number, bank information, or pay any fees to obtain a free quote.
Give yourself as much time as you can to make the sale. A rushed sale is less likely to get you a good deal.
4. Pick the best offer. Getting an offer of about 80% of the value of your annuity would be considered a good deal. Do not take a deal in which your buyer expects you to pay fees out of pocket before a settlement is agreed upon. Once you have finalized your agreement, all agreed upon court costs, legal fees and commissions should be deducted from the final settlement.
5. Gather your paperwork. To sell your annuity, you will need copies of your original annuity application and your annuity policy. If you are already collecting on your annuity, you will need your most recent disbursement check and tax return. If you have a settlement agreement, you will need a copy of that. Bring your valid government issued id, such as a passport or driver's license, and a written declaration that you are selling your annuity of your own free will.
Gather any other documentation your buyer requires, such as a copy of a court judgment for a structured annuity, or copies of any release agreements.

Part 3 Deciding What Kind of Sale to Make.
1. Decide what type of funding you are trying to get from your sale. Investigate the various ways annuity buyouts are made. Remember that no matter what kind of deal you make, the buyer will get the better deal in the long term. You will likely be offered anywhere from 60% to 85% of the value of your annuity. With this in mind, consider alternatives to selling your annuity.
If you are just selling your annuity to free up some cash, taking out a loan might better serve your purposes.
2. Consider selling as a straight purchase. If you sell as a straight purchase, the buyer will give you one lump-sum payment for your annuity. You will not go on to collect future payments. Choose to sell as a straight purchase if you are trying to get the largest immediate sum possible, or if you have determined that your annuity is not serving its purpose.
If you sell an annuity contract, you will have to pay ordinary income tax on your annuity's earnings.
3. Consider selling as a partial purchase. In this case, the buyer purchases your immediate annuity payments for a set period. At the end of that time, you once again collect your annuity payments as scheduled. Consider this option if you have a temporary shortage of cash, but would like to continue investing in your retirement.
4. Consider selling as a reverse purchase. Sell several years of your annuity. For example, if you are now receiving $1,000 per month for the next 15 years, sell your payments from years 5 through 10 only. You will get a lump sum for those years, but still receive your current payments up through year 4. You will then receive no monthly payments in years 5 through 10, but they will resume in years 11 through 15.
Know that this will result in a lower overall payout from your annuity. You will get the money for the sold years up front, but it will be lower than the total value of the payments from those years.
You also need to be sure of the value of the future payments before any deals are made.
This might be a good option if you need money now, but know you will be able to support yourself during an upcoming time period.
5. Consider selling as split purchases. If your buyer makes a split purchase, they will receive part of your monthly payment. If you only need $500 a month and your annuity payment is $1,000, sell half your annuity; you will get an immediate lump sum for the half you don't need, and continue to receive monthly payments of $500.
Even though you've only sold half the annuity, you will still pay ordinary income taxes on the deferred earnings and any gains made on the sale.

Tips. 

Give yourself as much time as possible to make the best sale. Let the companies you deal with know that you are making casual inquiries. If you appear to be shopping around without rushing, you will be more likely to get better, more competitive offers.

May 04, 2020