Bertie Kerslake




Acquiring and owning a car has become almost an inevitable necessity these days. But everybody cannot afford to by new cars. Such people often opt for used cars or nearly new cars. Also, it is not possible for every one to purchase a car paying the entire amount directly. There comes the significance of loans and such financing deals.

You will come across a whole lot of loan providers in the market nowadays. If you have decided to go for a loan so as to realize your long cherished car dream, look for the best deal available in the market before homing on to a particular car deal. One of the attractive offers that are being proposed by car dealers these days is zero percent finance on brand new cars.

A car dealer offering zero percent finance usually will be having a specific customer at mind. They offer it to individuals who can actually afford such an offer. For such deals, the customer needs to have a somewhat outstanding credit background. So zero percent car loan deal is something of a mere mirage to an ordinary client, for most probably an ordinary person is likely to have at least one blemish in his or her credit report. Usually it is to already existing customers that car dealers propose such deals. For new clients, they set up a standard for credit background such as income parameters, location of the customer, employment or business status, or even the assets that the customers own.

You might be asked to put down a pretty good deposit on zero percent deals. Don’t declare it as ‘unusual’ if at all you are asked to deposit as much as half the value of the car!! The balance is payable in the form of monthly installments with out ant interest hassles. As compared to regular credit terms that have interest, credit terms for zero percent finance are usually much shorter, generally below two years. This obviously implies that the monthly installments that should be paid will be some what sky high. But then with longer credit terms, the contract price tends to be higher because the interest rate is induced for a long period of time.

In case you are unable to pay your monthly installment of the zero percent credit term on time, as a penalty you need to pay a high interest rate. You also need to pay other penalty charges which make your deal much more expensive than what you could imagine.

Another aspect of zero percent car loan deal that deserves a special look is the fact that this particular financing is always restricted to certain makes and models of cars only and not to all models. Normally, these will be cars in stock that the dealers want to get rid off. If at all the model is okay with you, you may find it difficult to get the color and interiors of your choice with these zero percent car loan deals. You are supposed to be satisfied with what the dealer offers you, even if it is a brand new car.

Though not always workable for an ordinary customer, zero percent car finance is definitely a good marketing strategy that the business can employ to attract customers; and is definitely emerging as one of the most sought after car loan deals in the United Kingdom. The thing is that the zero percent car finance does work both for the car dealer and only those customers who can afford it.

Jane Muder




If you’re in the market for a new car or truck, you are probably excited to choose the model, the paint job, and all of the accessories that come with the vehicle. However, your ability to finance the vehicle is just as important - if not more important - than all of the cool details and add-ons.

Most people opt to purchase a new car or truck through financing, which is the process of paying for a vehicle with loan installments. Financially, this is a much more manageable method of vehicle ownership than paying for a vehicle in one giant, multi-thousand dollar lump sum.

You can obtain a car or truck loan directly through your dealership of choice; through a bank, or through a private individual. Each method of payment comes with inherent risks and rewards (for example, loan rates through banks can be higher - but you might not have legal recourse, should there be an issue with a private or family loan). Before deciding upon a loan type, these risks and rewards should be weighed carefully.

For many Americans, though, the biggest risk factor when purchasing a new vehicle is whether or not they will actually be eligible for the loan in the first place. An individual’s credit score determines his or her credit-worthiness - this number will tell the lending institution whether or not that person will reliably make car or truck payments. The lower your credit score, the lower your chances are of securing a loan at an affordable rate. In fact, some people with especially bad credit scores might find that they are having trouble securing a loan in the first place.

What is a credit score, and how does it affect your ability to secure a new car or truck loan?

Kenneth Elliot wrote in the Mar. 21, 2008 edition of the American Chronicle, “…[T]he FICO score remains a primary tool for lenders. It may not determine the final decision, but it definitely influences the ‘first cut’ when presented with a stack of applications to approve or disapprove.”

FICO stands for the name of the consulting firm that developed standards for credit score calculation, the Fair Isaac Corporation. The FICO scoring rubric is the method most commonly used to determine an individual’s credit-worthiness. In the United States, credit bureaus or credit reporters analyze an individual’s financial past - debts, loans, utility bill payments, previous car loans or mortgages, and more - to determine whether he or she is a good lending risk. A FICO score ranges from 300 to 850. 850 is the highest credit score possible; individuals with high scores have little or no trouble securing loans. Conversely, credit scores near the lowest end of the FICO score range indicate individuals who are high-risk borrowers; these people usually have extreme difficulty managing their debts.

CNN Money reports that the average American carries over 9 thousand dollars in credit card debt. Late or missed credit card payments are one of the biggest factors that lower individual credit scores. Many people spend more money than they actually make, and become attracted to the allure of credit-based purchases — which seem like easy money at first. Those individuals with high debt-to-income ratios might not be able to afford monthly credit card payments. After a few months of missed or late payments, an individual might find that his or her credit score is surprisingly low.

The FICO credit score is determined by a sum of factors. Each factor of a person’s credit history is given a different weight in the final evaluation of his or her financial situation. When determining a credit score, the greatest weight is given to the individual’s debt and bill payment histories (Is he or she timely or perpetually late?) and the total amount of debt he or she carries. Less important - but still contributing to the final credit score - are an individual’s credit history length; the types of debts he or she carries, and how often he or she has applied for new credit. Individuals who make timely bill payments, who have established long credit histories, and who have demonstrated convincing abilities to manage debt often have the best credit scores.

Before you are eligible for a car or truck loan, you will be asked to supply your lending institution of choice - be it the car dealership, the bank, or a private individual - with some information about yourself. Information required might include complete contact information; a social security number; details about your mortgage or apartment lease, and employment records. The lending institution will turn your information over to one of three credit reporting agencies - Equifax, Experian, or TransUnion. The credit reporting agency uses the FICO algorithm to determine your credit score.

If your credit score is less than stellar, don’t despair. You might still be able to finance a new vehicle. Remember: You always have two options when it comes to pitting a bad credit score against stringent car or truck loan terms. You can work to improve that score, or you can shop around for lenders who are willing to work with you. However, if your credit score is good, then you are a preferred borrower, and you will probably be able to get loans with attractive (meaning low) interest rates. Go out there and get that new car or truck loan!

Chintamani Abhyankar




There have been many credits recently added to the tax code for new car buyers. The federal government is trying to help the car manufacturers and the environment simultaneously by offering deep tax credits for eco-friendly auto purchases.

You can deduct both state and local taxes for new cars purchased between February 16, 2009 and December 31, 2009. In order to qualify, single tax payers must have an Adjusted Gross Income under $125,000 and married couples must have an AGI under $250,000.

The new plug-in hybrids are coming and tax incentives to buy these strictly battery powered cars are big. If you purchase one of the hybrids that run only on battery power, you can get a tax credit from $2500 -$7500. The only catch is that you must be among the first 250,000 buyers. After that, the incentive decreases.

When you are budgeting to purchase a new car, don’t forget to factor in the sales tax and registration fees. Sometimes people forget about sales tax especially. This can cost you thousands of extra dollars when buying a new car; so don’t forget to include it in your calculations.

If you will be using your new vehicle for business purposes, there are other tax deductions you can figure on receiving. Be sure to discuss these with your accountant or tax expert before you make the purchase, because the IRS has strict restrictions and regulations when it comes to deductions for business vehicles.

If you are planning to use your new car to carpool to work, your employer may offer incentives, as does the IRS. The Internal Revenue Service offers some deductions on carpool expenses to the car owner. Be sure to discuss these with your tax expert or visit the IRS website in order to learn more.

Also check your State Department of Revenue to see what tax incentives they may be offering for the purchase of hybrids and plug-in automobiles.

David Neehly


A new car is a major expense in anyone’s language. You only have to consider that what we now spend on an average priced new car is roughly what our parents spent to buy a new house a generation ago. A five or ten percent difference in the price on a purchase of this size can prove very costly.!

So, it’s clear that a new car purchase needs to be properly thought through. It’s imperative to do your research to ensure you get a great deal. Here are a few tips to help you get that great deal!

Tip #1 … Take your time. Car dealers thrive on making you think “todays special” will be gone tomorrow. Not true. Make it obvious that you have “all the time in the world” to buy a car. That gives you the upper hand in negotiations right from the start.

Tip #2 … Do your own research. You have to know a cars real value “before” you go shopping. The internet is a wonderful resource for finding out true car values. You can find out the average retail and wholesale costs of a specific make and model. These two pieces of information are vital to assess a good deal from a dud.

Tip #3 … Leave some profit for the dealer. They need to make some money on the deal, and you want to pay a fair price. This is where knowing your values are vital. You can often negotiate a price that’s maybe only $500 above dealer cost. Any dealer would sooner sell 3 cars a day and make $500 on each than sell one per day and make $1000 on each. You have to know how far you can squeeze them.!

Tip #4 … Only pay for the options you want. You may have to wait a few weeks for delivery to get exactly what you want, at the price you want. This is much better than “getting $5000 worth of extras for only $2000″ if those accessories that are of no use to you.

Tip #5 … Go car shopping near the end of the month. Most dealerships, and their salespeople, have sales budgets to meet. They’ll be much more likely to sweeten the deals near the end of the month to make the months figures look a little better.

Tip #6 … Negotiate your trade in value seperately. Dealers will always try to cloud the figures by offering you a “cash difference” figure. This just confuses the value being given to each vehicle. Keep it simple, and settle on the new car purchase price first, then negotiate the trade-in value. That way there are no tricks, and each car has a direct value you can assess for yourself.

Tip #7 … Stick to you assessment of car values. Salespeople undergo a lot of training to enable them to convince you that they are experts and you aren’t. Research doesn’t lie, but salepeople often do. Back yourself, and walk away from any salesperson that thinks they are smarter than you, or tries to “pull the wool over your eyes”.

Tip #8 … Make sure the car has a great warranty. New cars these days are backed by some outstanding factory warranties. An extra year or two of warranty can be worth both, a lot of money and a lot of peace of mind. You never get a second chance to get a new car warranty, so go for the best you can get. Dealers with top quality cars aren’t afraid to warranty them.

Tip #9 … Ask all your questions up front - even the silly ones. Whatever you do, always read the fine print of the sales contract before signing it. If anything is unclear, ask. Contracts usually contain legal jargon, if you are in any doubt at all about what something means, ask to have it explained before you sign.

Tip #10 … Take the car for a good, long test drive. Get the feel of the car before you take it home. If you aren’t a particularly “mechanical person”, get someone who is, to come for a ride with you. Most new cars a in near perfect condition, but if yours isn’t, you want to know now, not later. The dealer wants to clinch the deal now, so they’ll fix any minor defects immediately. Make sure they do.

I’m sure if you follow these 10 simple tips, you’ll have a very pleasant new car buying experience. In short, do your research, know your stuff, and you’ll walk away with the car you want, and the deal you want.!

Jon Arnold


Since you are reading this, I am going to assume that you are looking into the lease options for your next new car instead of purchase options. A new car lease MAY be a good deal for you but it is something that you should examine very carefully, since you may end up in a much worse position.

On the up side, a new car lease is almost certainly going to have lower monthly payments that a purchase, compared with the same amount of money out of pocket at the time of signing. You can usually get a good deal on a car lease for less than a couple thousand out of pocket. The monthly payment is going to be determined by what the estimated resale value of the car will be at the end of the lease. So a car with poor resale value is going to have higher monthly payments than a car with a much better average resale value.

But on the down side, you are still responsible for the maintenance of your leased car – gas, oil changes, tires, tune-ups, insurance, and all the other things that normally accompany car ownership, but you are NOT building any equity in the car. In other words, you are in effect RENTING the car, except that you also have the responsibility for the maintenance of it.

Not all new car leases are created equally. You should definitely do your homework as far as what leasing programs are available, what they include and exclude, and most of all, what is it going to cost you. One big thing in almost all car leases is a mileage cap, where a typically mileage cap says that you will put no more than 12,000 miles a year on the car. So at the end of a three year lease, you can have no more than 36,000 miles on the car. You do not get any extra brownie points if there are fewer miles on it, but if there are MORE miles than that on it, you will pay through the nose for it, something like 30 cents per mile. So in this example, at the end of the lease you have 40,000 miles on it, it is going to cost you an additional $1200 to turn in the car. Ouch!

Over the course of a lease, you may want to terminate the lease early. If this might even be a remote possibility, know what your options are up front. In most cases, there is an early termination fee. Sometimes if you leased your car from a large dealership, they will allow an early termination fee without penalty if you are within about 6 months of the end of the lease, but only if you sign another agreement on another new car lease.

I would strongly encourage you to do a fair amount of homework before you sign on the dotted line. Even if the lease being offered by the dealership on your new car lease appears to be incredibly good, you can almost always be assured that there is a better program available. Sometimes the payments might be the same, but other programs may allow a higher mileage cap, might have lower or no early termination fees, and a variety of other subtle differences that could make a huge difference to you and your intended use of the new car.

Jon Arnold


Let’s face it, you love cars. You love to drive a new or late model car, the smell of a new car, the feeling of new and untapped power under the hood. It is exciting. But one of the problems is that your financial resources are a bit more limited than your dreams are, so you may want to consider a car lease instead of going out to get a car loan for a purchase.

The first thing you need to understand is exactly what is a car lease. When you lease a car, it does not mean that you own the car. Rather, it is more like renting the car, although there are still many very important differences. For example, you still need to pay for the insurance on the car. This is critical because you need to carry full coverage on the car, including collision insurance, which serves to protect the risk of the owner of the car while you have it out on lease. This insurance is typically more than what you might normally have if you had purchased the car outright, so be sure to figure the cost of insurance into your overall cost of driving the car.

One of the big bright spots with a car lease is that you do not worry about depreciation of the car, since you paid for that up front. You see, the cost of the lease is figured based on how much the car will be worth in resale value at the end of the lease. For example, if the car you want to lease cost $40,000 and at the end of a two year lease, assuming you have put about 24,000 miles on the car, the resale value is about $25,000 then the lease payment is figured based on the difference, or $15,000. This is exactly the reason that you can get a much better lease deal on a car that has a great resale value, instead of a car that it pretty much shot after two years.

Another reason that a leased car can be considered a better deal is because the payments are typically lower than if you had purchased the car. Again, as described above, this depends on the estimated resale value of the car after the lease period, but generally speaking, your payments will be less. However, since you are driving more of the car as an asset or resource with less of your commitment to the vehicle, your credit needs to typically be a bit better than it would for a purchase or a car loan.

The real beauty of a car lease is that at the end of the lease, you can just turn in the car and slide into a new lease on a brand new car. This is assuming of course that you have not put too many miles on your leased car. You should have a good feeling for how many miles you will drive. Standard lease agreements state about 12,000 miles per year although that can be adjusted up front if you know you will drive more. Be very conscious of how many miles you are putting on the car, since all miles in excess of what you agreed to when you turn in the car are assessed a pretty hefty charge, like 30 cents per mile or even more.

On the downside of a car lease program, you never own the car. You have replaced tires, wiper blades, paid insurance on it, but since you are leasing the car, you will never own it and will therefore always have a monthly payment. Contrast that with a car purchase, where after the car loan term, you own the car and can still drive it but you are not making car payments anymore.

Consider which option is right for you. A car lease can be a great deal and keep more money in your pocket, as long as you can live with the restrictions and limitations.

Jon Arnold


Shopping for a new car when your old one is about to give up isn’t most people’s idea of a good time. It’s not deciding what kind of car you want that’s the problem. Most people are able to think seriously and be realistic about what kind of car they can afford to own. They’ll happily settle for a sedan, even if they dream of a sports car.

However, your credit might get in the way. If you’ve got less than great credit, car dealers can make you feel like a second class citizen. They don’t want to take the risk of selling you the car you need, so they steer you towards other, less desirable models. They don’t want to waste their time on you if you are not going to qualify for financing.

Very few people have perfect credit these days. There’s always an occasion where you miss a few payments on a credit card or other bill, or get laid off from your job and have to put off the least vital bills. However, even if things are now different and you can deal with your financial responsibilities, you’ll still have that black mark on your credit.

Credit bureaus can keep the information about those missed payments on your record for a long time. When you start investigating your options for financing your new car, they’re sure to turn up. This means that you’re on the defensive, and have to relive the period when you weren’t able to live up to your responsibilities. It’s necessary for you to explain to the dealership what happened, why you weren’t able to make those payments, and to justify your ability to make them now. Here’s some information to help you do this more easily.

The first thing you should do is realistically figure out how much you can afford for your new car payment. Don’t make the mistake of being too optimistic about your ability to save money or reduce expenses. Buying a new car shouldn’t affect your quality of life. If it’s necessary to stretch your budget that thin, you should put off getting a new car until things improve.

When you are realistically figuring out your budget, remember that cars do not drive on air. You will need to put gas in them and it would be a good idea to set aside money every month for maintenance like tires, oil changes, etc.

Also, it’s important to retain a good sense of reality in regards to how much you’ll get when you trade in your car. You probably won’t get the blue book price. For instance, if your car is worth $6000 as a trade in, realize that this is only $6000 off the sticker price of the new car. If you receive a discount on the sticker price (rarely do people ever pay the sticker price!), you probably won’t get as much for your trade-in. Sometimes the amount that the dealer discounts your trade in turns out to be the same as if you’d paid the sticker price in the first place.

However, should you be able to work things out with your dealer and arrive at a fair price, you still need to shop for a new car loan. Even if you’re getting a good deal on your trade in vehicle, you’ll almost certainly need to borrow money to buy a new car. What kind of loan you get is almost as important as picking out the car.

If you happen to have a good credit rating, you can often get a good deal on your new car financing through the dealer. They’ll use the manufacturer’s lending resources to help find you the right financing. The best deal you can get is a zero percent finance rate. There’s no interest with a zero percent rate. You can also get one point nine or two point nine percent interest rates, which are a lot better than you can get through most other lenders. Therefore, if you can get a good deal through the dealer, you should probably go for it.

However, those with less than perfect credit may need to look at other options for their new car financing. You may be able to find attractive loan programs through other lenders. These programs are designed for people with a few credit problems. You can even get loans designed for people with very poor credit or even those who’ve filed bankruptcy. However, you should be careful with these kinds of loans. Slipping up with them can put you in line for lots of fees and penalties, and the interest rate is going to be higher because they will consider you a higher risk.

Remember, when you buy a new car, shopping for the right car loan is just as important as picking out the perfect car. If you go with the first financing you’re offered, you may find yourself paying several thousand dollars more than you would have if you had bothered to shop around. Don’t underestimate the value to you of getting the right financing. There’s an option available for you, no matter what your credit history looks like.

Tom O’leary


Purchasing a new car extended warranty can be expensive. Yet, they can be a financial life-preserver should anything ever happen to your car or truck. Here are eight scenarios that detail whether you should purchase an extended warranty the next time you buy a new car, truck, van or suv.

SCENARIO 1: If you are Single, with no family obligations, make less than $40,000 per year and plan on keeping your new car or truck at least 5 years - Consider an extended warranty. Why’s that?

Well, I’ve found that most in this scenario are either recent college grads just starting out on there own or those that work in a specific trade.

The recent graduates are still trying to pay off huge student loans and deal with all the other normal expenses associated with life on-their-own. That situation severely limits their expendable cash resources.

For those in a specific Trade - most enjoy a comfortable lifestyle and a large, unexpected, out-of-warranty repair can put a painful cramp in that lifestyle.

SCENARIO 2: For those single folks with no family obligations that make more than $40,000 per year and plan on keeping your new car or truck at least 5 years - Skip the extended car warranty. For most in this group, a large, unexpected repair is affordable. The only exception to this scenario are those stuck in a week-to-week paycheck mode - you might want to consider a warranty.

SCENARIO 3: If you are married, with no family obligations, make less than $60,000 per year and plan on keeping your new car or truck at least 5 years - Consider an extended warranty. Why? For the same reasons listed in Scenario 1.

SCENARIO 4: If you are Married, with no family obligations, make more than $60,000 per year and plan on keeping your new car or truck at least 5 years - Skip the extended warranty. Why? For the same reasons listed in Scenario 2.

SCENARIO 5: If you are married, with kids, make less than $60,000 per year and plan on keeping your new car or truck at least 5 years - Consider an extended warranty. Most folks in this situation are stretched to the limits already. Family obligations usually limit expendable cash and an expensive repair will be financially painful.

SCENARIO 6: If you are Married, with kids, make more than $60,000 per year and plan on keeping your new car or truck at least 5 years - Skip the extended car warranty. Why? Typically these folks do have some expendable income and can handle the cost of a large out-of-warranty repair. However, if this scenario fit’s you, and you’re over-your-head in Credit Card Debt and other bills….it might be wise to look at a warranty.

SCENARIO 7: Those who are leasing or plan on getting rid of the car, truck, van or suv before the Manufacturer’s Warranty runs out, skip the extended warranty. Why pay extra for coverage you don’t need.

SCENARIO 8: Those who plan on “driving-the-car-till-the-wheels-fall-off” - Consider skipping the extended warranty as well. The Cost vs. Benefit just isn’t attractive for folks who keep cars for a very long time.

I’ve found that 99.9% of all new car buyers match one of these scenarios - just use the one that fits your particular situation.

Jon Arnold


When most people are looking for a new car, one of the options that they think about is whether or not a car lease would be more beneficial and cost effective for them than purchasing the car. There are many schools of thought about this and many differing opinions, but what it comes down to is that there is no right or wrong answer that applies to everyone, because everyone’s situation and needs are different.

When you sign on for a car lease, it means that your payments are going to reflect the amount of depreciation of the car over the term of the lease. For example, if the car you are looking at has a sticker price of $30,000 and you sign up for a one year car lease, the dealership estimates that this vehicle, after two years of use and about 24,000 miles, can be sold for say $20,000, assuming a modest dealer profit is included there as well. So your lease payments would be based on $10,000.

Granted, this is a very simplistic look at how lease payments are calculated, but this is pretty much the bottom line. Based on this, you can see that choosing a vehicle for your car lease that has a great resale value is going to keep your lease payments much lower than a car that depreciates much more quickly and does not have a good resale value.

The miles that you plan to drive the car that you put on lease is critical, since one of the major factors that influences the car’s resale value will be the number of miles on the car. Most lease programs allow you about 12,000 miles per year. It is very important that you are able to come up with a very good and very accurate estimate of the number of miles you will drive the car over the lease term, since that will have a major impact on the amount of your monthly lease payment.

If your planned usage of the car is to drive more or less than the standard number of miles per year, talk to your dealer about that. If your usage can be committed at 9,000 miles per year instead of 12,000 then your lease payments will be lower because the car will have fewer miles on it at the end of the car lease term, thereby giving it a higher resale value. But if you realistically plan to put 18,000 miles a year on the car, be VERY sure to mention that also. Your lease payment will go up, but that is much better than being assessed for excess mileage at the end of the lease, where excess mileage may be charged at a rate as high as 30 cents per mile!

In a car lease, you do not own the car and will never have title to the car. In essence, you are doing a long term rental of the car. But you still need to make the payments, and you are responsible for car insurance on it. And since you do not own the car, you will need to carry full insurance coverage on the car, including collision coverage. You are also responsible for repairs to the car, including things that are not covered under warranty, as well as “consumable” things such as tires, wiper blades, oil changes, etc.

The beauty of a car lease is that at the end of the lease, you turn in the car and can walk away. You don’t have the hassles of trying to sell it yourself, and can turn right around and lease a brand new car.

A car lease may be right for you but make sure you understand how a lease works and what the restrictions are so that it does not cost you more than a purchase would have!