The Best Times to Buy a Car

Sometimes it’s all about timing. That’s certainly the case when buying a car. Before heading to the dealership, you may want to apply for a car loan online and also consider these ideas about the best time shop for a new vehicle.

Day of the Month All the savvy-car-shopping experts agree – the end of the calendar year is the best time to visit the car dealership. Don’t forget to do your research well before you go. The savviest of the savvy say there are actually specific months that bode best depending on what vehicle you’re buying. May isn’t just for flowers after April showers. It’s for midsized SUVs, too. Get down to the dealership with spring in the air and in your step to get yourself a healthy serving of safety with a side of savings. Are you a truck person? October is monster truck month – not just for a show – for epic savings – so be sure to get yours. It’s not spooky to win at saving. If sedans and coupes are your speed, November is for more than just Thanksgiving. Go talk turkey with your local car dealer. Luxury your thing? You’ll need to exercise some patience because your month is the year’s last. Deals abound in December on luxury vehicles, especially high-end SUVs. Give yourself a great gift and save money doing it. If you don’t believe in the month-specific-savings hype, you can buy a new vehicle any month of the year. Play darts with a calendar, but be sure to go at the end of whichever month you choose. The very best time is the last day of the year. Bonus savings points if it also happens to be the last day of the month.

Day of the Week & Time of Day Then there’s the day-of-the-week camp. They don’t care which month, but you’d better be sure you’re at the dealership early in the week. If you’re serious, make it Monday. Not sure what time to go? Don’t bother taking the day off. Have dinner and then stop by to see your local car dealer. Make an evening of it and plan to be out late. The later you keep them at the dealership, and yes, they will stay to close a deal, the better price you’ll negotiate.

Holidays / Special Events Pro tip: Black Friday isn’t just for TVs. We all know that Black Friday means getting up early or just skipping sleep altogether. Early bird gets the worm and all that. Still true. Go, fight big crowds, buy lots of gifts and save lots of money. Then, have a relaxing dinner and follow the same guidelines noted above. Finish your Black Friday with a gift for yourself – an awesome deal on a new car. All those three-day weekend holidays were basically invented for salespeople to make their yearly quotas. Hey, they’ve got to eat too and it helps you get great deals. Some things only the keenest car consumers know is that mother nature plays a role in the sales cycle. Other deal days are rainy days (and Mondays, but we’ve already covered that) and because we know we’re supposed to go at night – do it by the light of a full moon. Some experts say the lunar cycle and precipitation can make a difference in your favor. You can also enjoy savings offers during model changeovers and be sure to look out for special factory rebates. Another thing to keep in mind before you head to the dealership is how much you can afford. Try using an online car loan calculator so you know before you go. Now go forth and save!

Owning a Vehicle: Know the True Cost

When it’s time to purchase a vehicle, whether new or used, it’s important to pay attention to more than the purchase price. Of course, that’s the primary expense, so let’s first take a look at the monthly car payment. According to Experian, for 2017, the average payment for new vehicles is $506 and $364 for used vehicles. Whether new or used, car payments vary based on your credit. If you’re going to purchase a car soon, you’ll benefit if you pre-qualify for a car loan before visiting the dealership.

AAA has been studying the total cost of car ownership since 1950. According to the organization’s 2017 study, it costs nearly $8,500 annually, or just over $700 monthly, to own and operate a new vehicle beyond the actual purchase price. For new vehicles, AAA accounts for fixed costs such as finance charges, insurance, depreciation, as well as the variable costs of fuel and maintenance. Used vehicles incur additional expenses too.

If you’ve purchased a new car, you’ll want to consider depreciation. Unfortunately, you’ll lose an average of $15,000 in value over the first five years according to AAA. Some vehicles depreciate more quickly than others. If maintaining value is important to you, possibly a small sedan or small SUV is best, both depreciate more slowly than other vehicles. Not surprisingly, electric vehicles depreciate at the quickest pace, followed by minivans.

As for the annual variable costs of car ownership, the largest this year is fuel. This expense varies greatly depending on the type of vehicle and gas. AAA derived a standard, determining Americans spent, on average, $1,500 to fill their tanks.

We also look to AAA for average maintenance and repair costs per year, which is $1,186 for 2017. This figure includes regular maintenance such as oil changes and replacement parts like new lights, batteries, and tires in addition to more complicated repairs.

Regarding used cars, the purchase price, and therefore loan value, will decrease compared to a new vehicle. Insurance and depreciation costs will be lower with used vehicles as well. Maintenance costs may be higher, however, in the end, you can save substantially by buying a used vehicle.

Thinking of buying soon? Visit Advantageautoloans.com and use the convenient tools to discover your possible car payment. Be informed before going to the dealership and get the offer you deserve.

Note – There may be minimal monthly cost overlap of finance charges. This charge was factored into both Experian and AAA studies.

Can Flex Fuel Save You Money?

Flex Fuel also known as E85 (Blended 85% ethanol and 15% gasoline) can be used in approximately 11 million vehicles today.  It current runs about 60 cents per gallon less than regular gasoline.

Some drivers have a Flex Fuel vehicle and do not realize it, so you can check under your fuel door and look for the E85 Label or the Yellow gas cap.  Other vehicles have a badge with the term E85, Flex Fuel or FFV.

     

E85 provides fewer miles be gallon (less energy content), so you fill up more frequently.  FFVs typically get about 15% to 27% fewer miles per gallon when fueled with E85.  As a rule, E85 would have to be priced 30% less than gasoline for you to save money.  You should test this on your own Flex Fuel Vehicle and do the math to confirm if the numbers work for you.

You may also have trouble finding E85 and a gas station near you.  There are approximately 2400 Stations that carry Flex Fuel across the US.   Many are located in the upper Midwest.

My 2014 Chevrolet Captiva is rated for 24 MPG combined City/Highway using Regular Gasoline and only 18 MPG combined City/High when using E85.  It costs me about the same to run gasoline versus E85, so in my case there is no actual savings.

Extended Warranties – What is covered and what is not covered.

As a general rule, maintenance items are not covered under any extended warranty. Oil changes, Tires, Brakes and Windshield wipers are examples of maintenance items and are the car owner’s responsibility.
Normally your new vehicle comes with a factory warranty, which is also known as a Bumper to Bumper warranty. Factory warranties may also cover powertrain, corrosion and emissions coverage.

Bumper to Bumper
• A basic warranty or new-vehicle warranty, a bumper-to-bumper policy covers components like air conditioning, audio systems, vehicle sensors, fuel systems and major electrical components.

Powertrain warranty
• This warranty typically covers just the engine and transmission, along with any other moving parts that lead to the wheels, like the driveshaft and constant velocity joints.

Emission warranty
• Major components like catalytic converters and engine control modules are covered for performance and defects.

Here are some examples of Manufacturer Factory Warranty Coverages

Company Bumper to Bumper  Powertrain          Corrosion   Emissions
Buick  4 yrs/50000miles 6 yrs/70000 miles 6 yrs            8 yrs/80000 miles
Chevrolet 3 yrs/36000 miles 5 yrs/60000 miles 6 yrs/100000 miles 8 yrs/80000 miles
Dodge 3 yrs/36000 miles 5 yrs/60000 miles 5 yrs 8 yrs/80000 miles
Ford 3 yrs/36000 miles 5 yrs/60000 miles 5 yrs 8 yrs/80000 miles
Kia 5 yrs/60000 miles 10 yrs/100000 miles 5 yrs/100000 miles  8 yrs/80000 miles

As you can see, coverages vary by Manufacturer and there are some exceptions which can be found in your owner’s manual.

When purchasing a used vehicle, the coverage of an extended warranty becomes very important. An extended car warranty must be purchased before your vehicle needs repairs, you can’t expect to receive coverage on pre-existing problems.

If you meet the years and mileage above, you would continue receiving factory warranty coverage. Once you reach the year or mileage limits, then your extended warranty kicks in.

Extended warranty coverage varies by provider, but in some cases you can extend your coverage up to 10 years and 160000 miles.

Each extended warranty company offers different levels of coverage, so it is important to investigate and understand the coverages offered before selecting a plan.

Buying a Car When You Owe on Your Trade

Worried you owe too much on your current vehicle to buy another car? You’re not alone; nearly half of all car buyers find themselves in this position. It’s important to know the value of your trade-in before visiting the car dealership. Easily check this yourself with tools available online; be sure to use one or more reputable sources like Kelley Blue Book or Edmunds.

If you’re considered “underwater” on your vehicle, most dealers and finance companies will include the difference of your trade in the new loan. For example, if you owe $8k and your trade is only worth $6k, your car loan will have an extra $2k added to cover the difference. Increasing your loan value makes negotiating the best interest rate crucial. Be sure to check your credit score before talking with the dealership or finance company. Or, even better, get pre-qualified for your new loan. Keep in mind you may want to speak with the lender to extend your term in order to maintain a more affordable monthly payment.

To avoid being upside down on your new loan, there are some things you can do to prevent transferring your old balance to your new loan.

Sell It Outright  
Consider selling your car to a third party. Generally, you will get more selling it than you would as a trade.

Delay Your Purchase 
Wait to purchase your next vehicle and focus on paying down your loan in the meantime. Can you take on a part-time job to increase your payments? Also, there are companies that will refinance auto loans, which could help you pay yours off faster with a shorter term, or lower your payments to allow you to make additional payments.

Look for Big Incentive Deals   
Keep your eye out for dealerships offering big incentives at year-end or model-end sales. If you’re lucky, you may find a deal that covers your car equity deficit.

Buying a Car Without a Down Payment

So you need to buy a car, but you lack the funds for the down payment? This is a tough situation and to make it more difficult, your credit isn’t the best. It may seem the only thing you can do is pay a high interest rate – the rate you want to avoid. But wait…there’s hope – there may be another option.

The Smallest of  Down Payments  
In the past it was standard to put down 20% on a vehicle; these days many dealerships will take half that and sometimes, even less. If you can put down anything it will help lower your payment. However, if even the smallest down payment isn’t doable for you, there are car dealers and finance companies that will fully finance your loan at over 100%, to account for fees, but as you may have guessed, it’s going to cost you more every month at the highest interest rate.

If you can wait a few months to make your purchase and save for a modest down payment, the wait will literally pay off. Also during this time, strive to pay all bills on time and correct any potential issues on your credit report. A cleaner credit report should reduce your interest rate and therefore your monthly payment.

Do Your Homework  
Don’t be afraid to negotiate. If you have a deal in mind, you won’t get it if you don’t ask. Talk to dealerships, not only about the price of the car, but also about financing options. Again, you never know what they can do until you ask. Do your research – there are online tools that will prepare you before you visit a dealership or reach out to banks, credit unions and specialty finance companies. Take a few minutes and check out a Payment Calculator, Car Loan Calculator, and Income Calculator. Get familiar with the range of interest rates so you get the best deal. Don’t pay more than you should! 

Dispelling Credit Myths

For consumers with bad credit, improving a credit report can be the key to getting a car loan at a great rate. Yet there’s also a lot of misinformation out there about the best ways to do this.

Consumers should know right off the bat that the absolute best way to improve their scores is to use credit responsibly.  By taking on a credit card or car loan and making the monthly payments on time, they may see their score rise dramatically over just a few months. Other strategies that many claim work can be minorly helpful, such as disputing inaccurate or misleading statements on the report, but there is not true cure-all for bad credit. KIII TV Channel 3 recently listed a few of the more popular myths. Among them was that closing out an old and inactive account could raise a score. In actuality, the reverse is true. Closing out an older account could make a consumer’s credit history appear artificially shorter, thereby lowering their score.

Another myth is that bad credit automatically disqualifies a consumer for a car loan. In many cases, these drivers are actually pre-approved for a loan. They can find out more about what types of rates they can get by applying for quotes online.