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.