Can I Refinance My Car Loan? Answers

Is it possible to refinance and lower my car payments?

refinancing a carMaybe.

Let’s explain.

It is natural to consider refinancing a car loan as a way to reduce monthly payments but it may not always be possible

Under the right conditions, you can lower your payments as well as reduce your total finance charges.

Under other conditions, refinancing may not make sense.

In some cases it might not even be possible.

Let’s explain.

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Can I trade my car for a cheaper car?

Can I lower my car payments by trading for a less expensive car?

trade for cheapere carYes — maybe.

But whether it’s a good thing to do will depend on your particular circumstances. Let’s take a look.

If you want to trade your car for a cheaper car, it probably means you are finding it difficult to afford payments on the car you now have. Or you simply want to trade down to have a little extra money each month by lowering your payments.

Let’s look at the two different possible situations, one of which will probably match your own situation.

Situation #1

You are “upside down” on your current loan. That is, you currently owe more on your loan than your car is worth as a trade-in vehicle. You can determine how upside down you are by first asking your bank or loan company to give you your loan payoff balance. Then compare that amount to the actual trade-in value of your car (see www.kbb.com and www.nadaguides.com). The difference in the two amounts will tell you how much you are behind in your loan (“negative equity”).

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How many miles are too much for a used car?

Should I buy a car with high mileage? How many miles are too much?

high mileage carsWe frequently hear these questions from people looking for used cars for sale.

Generally, 15,000 miles a year is considered an “average” number of miles per year. So a car that is 5 years old would have about 75,000 miles to be considered “average.” Anything significantly more, and a car is considered to be “high mileage.” Anything significantly less, and it’s a “low mileage” car.

What does it mean if a car has high mileage?

Does it mean you should avoid cars with “high” mileage? Or that low mileage is always better?

Are cars with high mileage a bigger risk? Will they break down sooner?

Not necessarily, to all these questions.

In the last decade or so cars have become much more reliable than years ago when a car was looked at as junk when it reached 100,000 miles. Not so anymore.

Many modern cars with 100K-150K miles are in great condition and will easily go another 100K.

However, if a car has not been maintained properly and has been driven hard or previously wrecked, it can be junk with only 30K miles on the odometer.

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What to Ask When Buying a Car

Car buying questionsWe’ve heard the question asked hundreds of times: “I’m buying a car. What questions should I ask?”

The answer is different depending on where you intend to buy your car — used car from an individual seller, used car from a dealer, or new car from a dealer.

Let’s look at each situation.

Questions when buying a used car from an individual

Important questions to ask when buying a car from a private seller:

  1. What is the car’s make, model, year, and mileage?
  2. Are you the original owner?
  3. Has the car ever been wrecked or seriously damaged?
  4. What problems does the car have now?
  5. Have you made recent repairs? For what?
  6. How does it drive?
  7. Are you the owner of the vehicle?
  8. Do you have the title?
  9. Is yours the name on the title?
  10. May I see the title?
  11. May I test drive the car?
  12. May I have my own mechanic check it out?

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Car Seller Scam Explained

Car Seller Advertises a Car Online – You Buy – Your Money Disappears and You Get No Car

[ If you are selling a used car and suspect a scam by a potential buyer, see our article, Car Buyer Scam ]

How the car selling scam works

car seller scamIt’s a common scam. Here’s how it works.

You find a car being advertised online on Craigslist, Autotrader, or other online classified ad web site. You like the car. You want it. The picture of the car is beautiful, the description is wonderful, and the price is unbelievably low.

You contact the “seller” who emails you details about the car and why it’s being sold so cheap.

By the way, the “seller” often has a woman’s name, which is intended to make him seem more trustworthy.

The seller (scammer) goes to great length to tell the story of his/her personal situation, a spouse’s death, a military deployment,  or other reason why he/she is selling. they explain how they are in a remote location (often military) with no phone, why the car is being sold at such a low price, how it will be “shipped” to you at no cost, and how your money will be “protected” by eBay, PayPal, or Amazon while you inspect the car, and that you can return it at no cost if you don’t like it.

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Used Car Advisor – Real Car Tips and Advice

A Guide to Buying Cars — Tips, Tricks, & Expert Advice — For Smart Buyers

used car advisorBuying a pre-owned used car can be tricky, especially if you are not a “car person” or don’t have a wealth of past experience.

It’s different from buying a brand new car from a new-car dealer in that used cars can come from individual sellers, small independent dealers, large national dealers, public auto auctions, government auctions, repossession sales, and even from scammers.

Since new cars depreciate in value so quickly, buying a used car will allow you to take the advantage and buy cheaper, after much of the depreciation has already taken place.

However, since used cars have been previously owned, there are potential problems and risks that depend on a vehicle’s age, mileage, condition, and accident history.

There are steps that should be taken to help avoid these kinds of problems when buying a used car.

  • How and where to find reliable used cars
  • How to know what to pay for a used car
  • How to find and negotiate the best used car deals
  • Warnings about used car scams
  • Used cars to avoid
  • How to finance and pay for a used car purchase
  • How to trade a used car if you still have a loan
  • What happens after a used car purchase

We answer all these questions and more on this website.

We’ll help you choose the right car, show you how to avoid problems, find and negotiate the best deals, steer clear of common car scams and dealer tricks. We’ll also tell you how to find cheap insurance, buy extended warranties, and the best way to finance your purchase. We also provide a handy easy-to-use online car loan calculator.

And much more ….

Car Auctions for Good Cheap Cars

Public Car Auctions, Government Auctions, Police Auctions, Repo Auctions, and Salvage Auctions

used car auctionsCar buyers who are looking for cheap cars often overlook public car auctions, or dismiss them because they think the auctions are only for car dealers.

It’s true that there are dealer-only auctions, but there are also many car auctions open to the public that provide an opportunity to pick up good used cars for good prices — if you know where to look and know how the auction process works.

What kinds of car auctions are open to the public?

  • Public wholesale car auctions
  • Government surplus auctions
  • Police and law enforcement seized car auctions
  • Unclaimed and abandoned vehicle auctions
  • Repossessed vehicle auctions
  • Salvage vehicle auctions
  • Public wholesale auctions

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Should I Buy This Car?

Question: Should I buy this car?

high mileage used carThis is a common question and is often asked when inexperienced buyers are considering a used car they have found for sale either from a dealer or individual seller.

We see this question frequently on automotive question-and-answer web sites on which we participate.

However, when the question is presented, it typically doesn’t contain enough information to allow a knowledgeable answer, which indicates that the asker doesn’t have sufficient experience to evaluate a car purchase for themselves.

The person asking the question might simply provide the make, model, and year of the vehicle. — and maybe the mileage.

They leave out important factors such as asking price, market value of the vehicle (from kbb.com and nadaguides.com), Carfax report information (accident and repair reports, number of owners, mileage stages),  title status (clean, lien, salvage, rebuilt), or condition.

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Why Are Cars So Expensive Lately?

Car Prices and Costs are Rising

It’s true, car prices are increasing at an alarming rate, often putting brand new vehicles and even relatively new used vehicles out of budget range for many automotive consumers.

When new car prices increase, so do used car prices.

So why are car prices and costs so high now?

New cars, like most other goods, are more expensive to build now than ever before. Materials, labor, distribution, marketing, and sales costs increase every year.

Contrary to popular belief, car dealers actually don’t have much built-in profit margin between invoice price and MSRP sticker price. As a result, dealers are forced to try to find other ways to make a profit to stay in business.

How dealers generate profit

One of the ways dealers generate additional profit is through what is called a “doc” fee, which is added to the cost of a car. It is made to sound like an official fee but is not. It’s typically in the range of $499-$699 for an average vehicle. It can sometimes be negotiated lower, or even out of a deal completely.

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Bad Credit Car Loan – Options

Buying a car with bad creditHaving bad credit can cause difficulties when buying a new or used car if you need a loan.

However, most people with a low credit score have options that will allow them to get the car they want.

About your credit history and why it is important

Just to be clear, anyone who has ever had a loan, mortgage, or credit card has a credit history file. That file is a detailed report of every loan or account a person has had. It shows account details, credit amount, current status and balance, and payment history. If there have been late payments, missed payments, repossessions, bankruptcies, or foreclosures, those are also in the file. Negative information in the file can remain there for up to 10 years.

When you apply for an auto loan, the lender (dealer, finance company, bank, or credit union) will check your credit history to determine your credit worthiness — which is a measure of how likely, or unlikely, you are to keep your promise to repay your loan — based on your past performance.

However, car dealers and finance institutions don’t take the trouble to read your detailed credit report. Instead, they look at your credit score, which is a numerical rating that summarizes your entire credit history.

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Used Car Guide – Expert Tips and Advice for Smart Buyers