Loan Strategies I Used to Pay Off My Car

Written by adminAugust 15, 2018
Student Loan Consolidation

Your car or truck is your pride and joy. You love driving it and you consider it the pearl of the road. Maybe you’ve even named it and treat it well, like a member of the family. You get regular oil changes, take it in for a tune-up, and keep it clean. If you got a loan for your vehicle, you might be locked into a long-term relationship.

This is only part of your responsibility as a car owner. I do the same for my truck to keep it running as long as it can. But something I didn’t like doing was paying for my truck every month. As my budget tightens and I have other bills I need to pay for, I decided to look for ways I can pay off my loan sooner.

Another reason why this is important is to avoid paying more than the vehicle is worth. If you’re paying off a loan, then you’re most likely paying thousands of dollars of extra interest as well. By paying it early, you can save yourself the extra cash and own your vehicle outright.

Also: http://financialhelpers.com/americans-are-now-paying-a-lot-more-in-credit-card-fees/

Here are the 5 strategies I used to pay off my truck loan sooner.

1) Instead of Making One Payment Every Month, I Made Two

This is sort of a brilliant trick. Most loaners will allow you to make as many payments as you want. Instead of paying only once per month, pay half in the middle of the month. By doing this, you’ll make 26 half-payments instead of 12 regular payments, which means you’ll end up paying 13 full payments overall. That’s squeezing in an entire extra month of payments.

To look at it another way, rather than paying off the loan during the 60 months you planned, you can be finished with it in 54 months just by making two half-payments per month.

2) I Rounded Up When Making Payments

When you pay your monthly bill (or bi-monthly if you use the step above), a large portion of it goes towards interest. Anything above that threshold is payment towards your vehicle. If you decide to round up to the nearest $50 increment, you can cut a 60-month loan down to 47 months and save over $500 in interest.

For example, if your monthly bill is $208, but you decide to pay $250, that extra $42 goes directly towards your vehicle, not the interest, meaning you can pay off the loan faster and save on the interest you would’ve had to pay if you just paid the minimum. It would add up to an extra $512 paid towards the loan in a year.

3) I Made Several Larger Payments

This is an obvious point, but it certainly helps to make an additional larger payment or two if you can afford it. You might want to spend that money on something else, but the more you can put into it during the year, the faster you’ll pay off the loan and the less you’ll thrown down in interest.

4) I Never Missed a Payment

This is a big one. Since getting a truck loan, my credit score has gone up significantly. One of the major reasons for that is I have 100% on-time payments. If you do miss a payment, it can reflect negatively on your credit score.

While some lenders do allow for a missed payment a couple times a year (hey, stuff happens), missing that payment will just add more interest and take you longer to pay it off. Do your diligence. If you have to cut back on other bills, do it. Once you’re clear and free of the loan, you’ll have a lot more money in your pocket.

5) I Was Able to Refinance

I mentioned in the point above that making on-time payments significantly improved my credit score. When you get a loan, the interest rate is based on that score, as it offers a picture to the lender about your ability to pay it back. If your score goes up after a decent amount of time of regular payments, you’re more trustworthy.

You might be able to get lower monthly payments, less interest, and a shorter term by refinancing. If you can’t get all three, then it might not be worth it. Even if you can get lower payments, still paying the amount you were before will only help you pay it off that much quicker.

For me, these steps were part of a greater strategy. I had a poor credit score with little history. By showing some fiscal responsibility, I was able to improve my score and pay off my vehicle in a lot shorter of a time. It’s small steps like this that can get you closer to true financial freedom.

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5 Money Saving Tips for Buying a Car

Written by adminApril 24, 2018
Saving

Buying a car is a huge step for most people. Whether it’s your first adult car or you regularly seek out new leases every few years, it can be a frustrating (and quite expensive) experience. It’s especially troublesome if you go in not knowing how to find the best deal for you.

If you’re in the market for a new car or truck, this blog with share with you some money-saving tips that will keep you from making a huge mistake, while hopefully saving you a bundle.

1) Wait Until the End of the Month/Year

I know, I know. The thrill of buying a new vehicle is incredible! We want nothing more than to walk into a dealership today and walk out driving something with that new car smell. But if you wait until the end of the month, you can potentially get a bigger bang for your buck.

Most car companies pay their employees through commissions. The successful sellers often get perks and bonuses for selling the most cars. As the month goes on, a salesperson will get increasingly hungry to keep up with their quota, so they offer huge discounts, perks, and incentives to get you to walk away happy.

If you can be patient, end of the year deals can be really awesome as well.

Do your due diligence and visit several dealerships at the end of the month and compared which ones seem the most desperate to make a sale. You can also look for quarterly bonuses and special holiday events. The savings can total in the thousands.

2) Do Your Research Online

If you wait until you’re at the dealership to look around and do research, you run the risk of being strong armed or being swarmed with salespeople pushing you into a vehicle that’s not the best fit for you. Sometimes dealers have a vehicle they want to get rid of. They’ll try their hardest to convince you to buy something other than what you want.

Before you go to the dealer, you can do all the same research online. Look at the various models, sizes, colors, and prices you want to pay. There are a ton of resources online to help you, like Kelley Blue Book, Auto Trader, Carfax, and so much more.

A lot of dealerships even have a way for you to check out prices on their website and get a quote all without walking in the door. So, when you are ready to buy, you’re well-armed with tons of great research, ultimately saving you time and money later.

3) Shop Around for Trade-Ins

There’s no rule (written or unwritten) that says you absolutely have to trade in or sell your old vehicle at the same place you buy your new one. It may be more convenient to do it at the same dealership, but it can cost you money.

The trick is to take your car around to different places and write down the quotes you get. Once you’re at the dealership of your choice ready to buy, you have a nice tool in your pocket to start the negotiations.

The best way to go about it is to negotiate the price for the new car first, then mention you have a trade in and see what kind of deal you get. If it’s not as good as the deal another dealership offered, you have a great negotiation weapon. They’ll be eager to get your sale after already agreeing on a quote, so they might be more inclined to increase their offer.

4) The Best (and Worst) Time of Year to Buy

Spring is the worst time to buy a car. A lot of people get excited after getting tax returns and are ready to buy. Dealerships are prepared for that and prices will be inflated. They can afford to charge more as their buildings are often full during this time of year.

The best time to buy is in the fall. This is usually when the new model years come in, so they have a lot of the ‘older’ models taking up room on the lot. They’re more likely to give you a great deal to free a spot for the newer car, which can save you thousands for virtually the same vehicle.

5) Don’t Be Afraid to Negotiate Down Fees

You can bet your bottom dollar, when you receive your itemized bill, there will be a lot of additions to it you didn’t think you’d have to pay. Fees for this, taxes for that. Some dealers will charge you simply for doing paperwork. Yes, that’s a real fee that can hit as high as $800! Some states do cap the fee to keep it as low as possible.

In this case, if you get hit with a huge fee, try to negotiate them. Be willing to walk away, because it might take you threatening to leave if they don’t remove it. Some of the fees can get so ridiculous it’s not even worth entertaining doing business with them.

In the end, the best thing to do if you’re in the market for a new car is to wait. Experts say to start research at least 6 months ahead of time so you can be aware of all the great deals, sales, holidays, and times of the year when they’re a lot less expensive.

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5 Tips to Get Lower Auto Insurance Rates

Written by adminJanuary 4, 2017
Car Insurance , Insurance

If you own a car, then you almost certainly need to purchase auto insurance. Every state requires proof of financial responsibility, and for most vehicle owners, this means you have to satisfy the requirements that the state sets of liability insurance. If you’re still making payments on your auto loan, you’ll also need to satisfy your lender’s requirements for collision and comprehensive coverage. Liability insurance is the kind of coverage that pays for damage to the other guy, but comprehensive and collision insurance protect your vehicle.

These are some quick facts about U.S. auto insurance:

  • The average cost of car insurance in the United States was a little over $900 in 2014.
  • The cost of coverage has increased in most states in the past year between one and five percent.
  • Averages aren’t that useful because they could include various kinds of coverage, and premiums vary quite a bit in different states and cities.

5 Ways to Buy Cheaper Auto Insurance

If you have to pay auto insurance premiums each month, it makes sense to take some time to learn a little bit about how this kind of coverage works. Consider these five tips to curb your premiums:

  1. Some cars are cheaper to insure than others: If you’re planning on buying a new or used car, you should get quotes on that make and model before you decide which one to buy. For many, premiums are a big part of the cost of ownership. You might think that older or cheaper vehicles are always cheaper to insure, but that isn’t always true. In general, safer cars are less expensive to cover.
  2. You could change your driving habits: If your current insurer has just raised your rates, you might consider commuting by bus or rail and leaving your vehicle at home during the week. Many insurers offer discounts for low-mileage drivers, and you’ll also help save wear on your car, gas money, and the environment. You might be surprised to find that it actually works out cheaper to buy a bus or rail pass.
  3. You might consider increasing your deductible: Increasing your deductible from $250 to $1,000 could save you hundreds of dollars each year in premiums. You just need to be sure that you know there’s a risk of paying more out of your pocket if you do have a claim. It’s a good idea to set some of that money inside just in case, but if you don’t have a wreck, you’ll get to keep it.
  4. Look for an insurer with the right discounts: Many large insurers offer discounts for things you might already be doing or could easily do. For example, you might save money if you bundle policies with the same company, take a defensive driving course, or make sure any teen drivers in your family maintain at least a B average in school.
  5. Shop around for the cheapest auto insurance premiums: Some companies are better for some drivers than others. For example, the insurer that offered you low rates might not be the one who will write your your teenaged driver in for an affordable price. Even great drivers won’t get the best rates from some companies if they have low credit scores.

This may seem like a lot to keep in mind, and it’s only a portion of the help that you can get with FinancialHelpers.com. You might need to buy auto insurance, but you don’t need to overpay.

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