Auto Loans and Financing
Car loans from institutions such as banks or credit unions for the purchase of an automobile
How should you 'break-in' a new car?
You should start off treating the engine very gently i.e. gentle revs and never more than 1/4 throttle. Over time you gradually use more revs and more throttle until you eventually end up using the full range of the engine. It is important to eventually end up using all the power and rev range to wear harden various parts. It is also important that you do not keep to a single continuous speed or gear but vary your speed quite a bit during this time (a long highway journey is NOT a good break in if you just sit in top gear at a continuous speed). This is because things are still hardening up and you can wear a groove into them.
Modern engines break in relatively quickly, often 1000km, older designs took longer as the tolerances were not as precise. The first oil change is often a lot sooner than later ones as during break in rough edges from manufacturing will be worn off and end up in the oil.
Here is more advice from various contributors:
- Drive it gently. General rule is not to exceed 3000 - 3500 rpm. for the first 500 miles. It is also a good idea to be kind to it for the first 2000 miles.
- "Breaking in" your cars engine is an old myth, it is also bull. Rule #1 if you want your engine to last a long time, treat it gentle all the time, not just for the first 1000km.
- Break in is important. All engine bearings and cylinders, etc. must wear evenly and proper. Also, piston rings need to seat. Have you ever seen a new engine burn oil until it breaks in? Some piston ring take up to 5000 miles to fully seat or wear evenly to cylinder bore. Not following proper break in procedures could result in premature engine/parts failure.
- This depends whether you purchase or lease a car. With a purchase you should break a car in for the reasons and using the methods described before, ignoring the one comment about it being bull. If the vehicle is a lease you may skip the break-in period if you so wish. Since not breaking-in a car may result in improper wear of parts, or even engine failure, during the warranty period it will be covered, and a leased car will be returned to the dealer before the warranty period expires.
- You shouldn't just break-in your car if you are buying it. Even if you are leasing it you should. Do the next guy a favor. A very inconsiderate answer man. Besides some people lease it and then decide they like it and want to buy it, so I say, you should break it in anyway. No matter what.
- If you research on how to break-in a new engine on the web, most sites will tell you a procedure to break-in the piston rings (the only thing that matters).
- The proper way to break in an engine is to drive at 30 mph and accelerate to 50 mph. Do this to break in the engine the proper way. Do this the first 3000 miles or so.
- Manufactures are making engines with much higher tolerances today. Where cylinder clearances used to be in the thousands of an inch, now its in the ten thousands. Bores are rounder and straighter. There is know reason to baby a newer engine, it will actually hurt. You need cylinder pressure to drive the rings out onto the bore, which actually shaves the bore into a perfect fit. By babying it the rings will only rub and burnish the surface leaving a less then Ideal finish. So ... keep the revs below 4000 the first 300 miles, then drive it ... accelerate with meaning for the next 2500 miles and your all set. This is how all High Performance engines are broken in, and all engines today can be considered a high performance engine since they pull more power out then there predecessors ever did.
- Most modern car engines are broken in at the factory, before assembly. Therefore the old tradition of breaking in a new car doesn't apply anymore. Just drive as you normally would drive and treat the car the way you would treat anything else of value.
Is there a way to trade in your car if you are upside-down on the car loan?
Yes, but the money you still owe (negative equity) must still be paid. Example: you owe $10k on a car and the dealer will only offer you $8k in trade - the $2k difference must be paid. In some cases, your lender or dealer financing will allow you to roll the negative equity into the new payment as long as the loan to value (LTV) does not exceed a certain percentage. Therefore, it is difficult to get into a less expensive vehicle because of the LTV threshold. Dealer advertisements claiming to pay off your trade are simply doing as described above, and this can be dangerous for those with eyes bigger than their wallets.
Can you still owe money after your car is repossessed?
Yes, your car will be sold and if the price they sell it for is less than the balance left on the loan, plus the repossession fees, you will be responsible for that difference and will have to pay it.
How is your balance calculated according the finance charge on owner financing?
Examples of computation methods include the following:
The most common credit card balance calculation method credits your account from the day payment is received by the issuer. To figure the balance due, the issuer totals the beginning balance for each day in the billing period and subtracts any credits made to your account that day. While new purchases may or may not be added, depending on your plan, cash advances typically are included. The resulting daily balances are added for the billing cycle. The total is then divided by the number of days in the billing period to get the "average daily balance."
Usually the most advantageous method for card holders, the balance is determined by subtracting payments or credits received during the current billing period from the amount left at the end of the previous billing period. Purchases made during the billing period aren't included.
Using this method, the cardholder has until the end of the billing cycle to pay a portion of your balance to avoid the interest charges on that amount. Some creditors exclude prior, unpaid finance charges from the previous balance.
The previous balance is the amount you owed at the end of the previous billing period. Payments, credits and new purchases during the current billing period are not included. Some creditors also exclude unpaid finance charges.
Issuers sometimes use various methods to calculate your credit card balance that make use of your last two month's account activity. Read your agreement carefully to find out if your issuer uses this approach and, if so, what specific two-cycle method is used.
If you don't understand how your finance charge is calculated, ask your card issuer. An explanation must also appear on your billing statements.
Can you sell your own car to your own business?
Check out the tax laws. If you are a sole proprietor, you may be able to write off mileage, which would be the simple thing to do. If it were me, I would avoid the crossover of personal assets with business assets.
What does the loan department do in a bank?
The Loans department of a bank does the following:
1. Process loan applications from customers
2. Finalize interest rates for loans
3. Approve/Reject & Disburse Loans
4. Monitor Status of Loans
5. Process repayments and identify troubled loans
What rights does a cosigner have when a car is repossessed when the cosigner is the parent and the adult child missed payments?
A co-signer is equally responsible for paying the debt for which they co-signed. That is the reason a lender requires a co-signer. The lender would not have loaned the funds to the primary borrower unless someone else guaranteed the loan.
Can you return a new car?
No. It is nothing more than a myth that the "Buyer's Remorse" or "Cooling Off Period", laws apply to the purchase of an vehicle of any kind, new or used. Those type laws do not apply to vehicle purchases in any state. Once you purchase a vehicle you own it. Also once you purchase a new vehicle it becomes a used vehicle the instant you drive it off the lot and is worth far less than before. Those type laws apply to unsolicited sales as in a door to door salesman or phone sales. The only way you could return a vehicle is if the selling dealer had such an offer as GM has done in the past, or if the selling dealer agreed to allow you to return the vehicle. Otherwise you are stuck with your decision to buy the vehicle.
Can you sell a car when you still have a big car loan to pay off?
As the vehicle owner, you can sell the car whenever you choose. You are liable for the car loan. If you are selling the vehicle for less than the loan (especially when you are upside-down on the loan - you owe more than the car is worth), you need to pay the difference to your lender.
When trading the car in to a dealership (in effect selling it to the dealer) the dealer should handle the loan payoff details. You need to inform both your lender and your state DMV that the vehicle is being sold. The lender will release the lien against the vehicle after they receive payment from the dealer.
Selling to another individual is harder. It is best to work with your lender and find out how they prefer to handle the transaction. You will need to supply the buyer with a clear title, but you can't get a clear title until you lender releases the lien on the title, which they won't do until they receive payment. Many lenders have a standard way of handling individual to individual vehicle sales.
For example, for a car with a loan greater than the sale price of the vehicle:
In Michigan, go to either a Bank or a Credit Union and get approved for a loan around the difference in price you are looking at. Then, when you find a buyer and agree on a price, you will go to the bank or credit union, and get the loan. You and the buyer must go to whoever holds the lien on your car, and you both pay your amounts owed on the car. The lien holder will sign the title releasing the lien, and you are free to take the title in to the DMV. It varies from state to state, but this is how it is done in Michigan.
Can you return a new car to the dealer if it's been in the shop twice in two weeks for the same problem without penalty?
In the next section of this answer are a lot of responses about returning cars because you don't like the car, don't like the deal, whatever. The QUESTION, however, was about returning a lemon. Every state has a Lemon Law, which requires the dealer to take the car back if it can't be fixed in a "reasonable" number of attempts. Check http://www.lemonlawamerica.com for your state's lemon law. In North Carolina, for instance, the car officially becomes a lemon if it can't be fixed in four attempts, or if it's been in the shop for more than 20 days.
So the answer is, no after two attempts, yes after three (many states say three) or four attempts to fix it.Returning a Car to a DealerHere are opinions and answers from FAQ Farmers:
- NO! Most large loans/purchases have a "3-day right of recission". During this time you may opt to not continue the sale and change your mind. The car sale is exempt. You may only return a car if there is Fraud in the Sale, Example: The Car is really a 1998 not a 2000 or it was not disclosed to you as a "Rental" car. You cannot merely change your mind or decide that the price is too much. On a new car, as soon as you take possession, the car becomes used and must be sold to the next buyer as such.
- If you live in California and you sign any contract, you will be unable to return the vehicle. In a rare case, I practically begged the manager of a used car lot to unwind the deal. I told him that my wife purchased a car for me prior to my purchase of their car, but I was completely unaware of it. They finally let me out, but withheld a $40.00 documentation fee and a 2.9% credit card surcharge. $178.00 is better than a $6000 used car that I decided that I didn't want. Also, when I purchased the car, I left it at the car lot and told them that I'll pick it up in a matter of days. I guess the unwinding of the deal helped for the simple fact that the car never left the lot and I came back the next morning. It only took me one night to think about the deal and realize that I wanted out. The most important thing is to not let the sales person pressure you into signing anything. Don't listen to 'this car may be gone tomorrow,' 'this is as low as I can go,' 'you will not find a deal better,' etc. It's all bull. It will get you in trouble if you sign the contracts, but you later want out. THERE IS NO WAY OUT AND THERE IS NOTHING THAT YOU CAN DO ABOUT IT. Everything is monitored and recorded from the minute you step on the car lot until you go to the back office to sign the 'nail in the coffin' contracts. Before you sign anything, go home and think about it. It will save you a lot of headaches. DON'T SIGN ANY CONTRACTS UNTIL YOU ARE COMPLETELY HAPPY WITH THE CAR! If you already have and you want out, the best advice that I can give is make up any good believable heartbreaking lie such as: Someone passed in my family and I need the money to help fund the burial expenses, etc. Go in the office crying if you have to. It may work, but it may not. YOU WILL BE CRYING FOR REAL IF YOU ARE UNABLE TO UNWIND THE DEAL. The best time to put on an act is when a sales person is with a potential car buyer. The car lot or dealership people most likely won't show their true colors in front of potential car buyers. They'll put on an act and most likely, unwind the deal. But again, this is rare, like in my case. DON'T SIGN ANY CONTRACTS UNTIL YOU ARE COMPLETELY HAPPY WITH THE CAR!
- The laws of Texas and Virginia...two states in which I have been in the car business...say that once the 'tailpipe leaves the curb' of the dealer's lot, the sale is complete. I think that is the case most anywhere, now. Some dealerships have thirty day money back guarantees. If you are buying a used car, get that deal!
- I sold cars for years. You can only return a new car (within 72 hours) if they came out to your house and solicited your business and had you sign the contract there. If you sign the contract at the dealership, and drive off the lot, you're stuck, unless you somehow convince the lender to back out of the deal. That's how it is in Texas.
How do you assume an auto loan?
- Assuming a Purchased Car
- Step 1
Do your homework. Owners who are upside down on their car loan, meaning they owe more than the car is worth, and want to get out of the loan would rather have someone assume their payments than sell their car, take a loss and still have to repay the loan. However, not all lenders allow the purchaser to do this, so it is up to you to make sure this is allowed by checking the car's loan contract or the lender itself.
- Step 2
Make sure you get records. Be sure you have a record of all the payments that have already been made, lender information and the loan document.
- Step 3
Find out what the payoff balance is.
- Step 4
Do the same homework you would do for the lease car, such as running the Carfax, checking the service record and filling out and having both parties sign the paperwork.
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Does credit acceptance corp defer car payments?
No they do not. And they will repo your car if you are too far behind. They may tell you that they will repossess your car if you are 10 days late, but it is a tactic used to scare you. They would loose more money trying to repo your car than waiting on your payment after 10 days.
Does Washington have a buyers remorse law?
Not for the purchase of an automobile. Vehicle purchases are not protected by the Buyers Remorse Law. Only unsolicited sales fall under that law. Once you buy a vehicle you own it and cannot change your mind.
Do you need a drivers license to buy a car in Ohio?
Yes you do
What do you do if the insurance for a totaled car does not pay off the car loan?
I faced the same thing about a year ago. The insurance company did not want to give me what was needed. I got on-line and found many cars that were just like mine and showed them that my car was worth more than they were wanting to give me. They still did not want to give me what the car was worth. So I went to small claims court and filed suit on the driver of the other car. The person's insurance has to represent them. Also go and look at the comps that the insurance company are using for your car to see if you can replace the car for what they want to give you.AnswerUltimately it is your responsibility that you either made low payments, took out a very long loan, or picked a car with high depreciation. The insurance company is not liable for the inflated amount you owe--only what the car is worth. AnswerThe insurance company will only give you the value of the vehicle, as per the "Kelly Blue Book". They will also send an appraiser out to see what the condition of the car was, as in mileage, any previous damage.
If the accident was another driver's fault, you have to sue him and/or his insurance company for the remaining balance.Whatever you borrowed to obtain the vehicle wil always be more than the car is worth. You have already lost money on it as soon as you drove it off the car lot. But do your research. Go online for "Kelly Blue Book", and get the estimate of the car's value. If it is more, then dispute it with the insurance company. Print the page out.AnswerWhen you bought the car new or used from the dealer you had the option to purchase something called GAP INSURANCE from them (the Dealer, not the insurance company) for your exact situation. If you did not have enough equity in your car for the insurance pay off to cover it AND did not have gap insurance. basically you are screwed and responsible for the rest of the loan amount car or no car. Some people believe Gap insurance is a rip off so they do not offer it to you and some just don't know what it is. They do not need to be selling cars. Not fair but the way of life. Father is an insurance sales man. I also had a girl hit me I had GAP insurance and she did not. She still had to pay off the balance on the loan even though she did not have the car. The courts won't do much because you had the option to purchase gap insurance and you did not, it does not matter that you did not know.
How can you trade a car when you owe more than it is worth?
You can't really trade it without staying in the hole. You can go to a car lot with about 8000.00 dollars and trade it but if your buying a new car that's 12995.00 and you trade a car you owe 9995.00 on they will just add the amount you owe minus what they give you for the car, which is usually nothing and the rest will be put on your new loan. You will owe 3 times as much as you did. The only way to not have the car is to let it go back, but agin that's a repo... I recently had to do that and just bought a car for cash. No car note..that's the best thing. The repo will hurt your credit, but as far as getting another car, you can after about a year and a half.
Does a cosigner have rights to the car?
A co-signer is jointly and severally liable on the note, but doesn't have any security interest in the vehicle. In other words he has no rights to the vehicle, other than to pay off the note if you fail to do so. A cosigner can ask that his name be added to the title, which means he has equal ownership. When the note is paid he can then have his name removed
But as a co-signer, it also means you have the responsibility to ensure that the owner of the property is able to pay on time for the financed car.
If you have any doubts you can call the bank where the car is financed; they will give you a clear answer.
How long do you have after purchasing a new car to return if you decide you do not want it?
No, the minute you've signed the contract, the vehicle is yours. "Buyer's Remorse" is a myth pertaining to the buyer's supposed legal right to change their mind and return a vehicle after signing the contract. Not at all based in reality! This myth probably stemmed from a stipulation called the "Right of Recission" when refinancing a home loan, which allows the person refinancing a three-day "cooling off" period after signing the refinancing paperwork to change their mind and cancel the refi.
I can't speak for other states, but, in Texas, the Lemon Law only takes effect if the car has been in three times for the same problem within a specified time frame (6 months or a year, I think). Also, it has to be something that renders the vehicle inoperable or dangerous. In other words, if your stereo keeps going out, or your power window is broken, then Lemon Laws do not apply.
If you live in California and you sign any contract, you will be unable to return the vehicle. In a rare case, I practically begged the manager of a used car lot to unwind the deal. I told him that my wife purchased a car for me prior to my purchase of their car, but I was completely unaware of it. They finally let me out, but withheld a $40.00 documentation fee and a 2.9% credit card surcharge. $178.00 is better than a $6000 used car that I decided that I didn't want. Also, when I purchased the car, I left it at the car lot and told them that I'll pick it up in a matter of days. I guess the unwinding of the deal helped for the simple fact that the car never left the lot and I came back the next morning. It only took me one night to think about the deal and realize that I wanted out. The most important thing is to not let the sales person pressure you into signing anything. Don't listen to 'this car may be gone tomorrow,' 'this is as low as I can go,' 'you will not find a deal better,' etc. It's all bull. It will get you in trouble if you sign the contracts, but you later want out. THERE IS NO WAY OUT AND THERE IS NOTHING THAT YOU CAN DO ABOUT IT. Everything is monitored and recorded from the minute you step on the car lot until you go to the back office to sign the 'nail in the coffin' contracts. Before you sign anything, go home and think about it. It will save you a lot of headaches. DON'T SIGN ANY CONTRACTS UNTIL YOU ARE COMPLETELY HAPPY WITH THE CAR!
Do you still have to make payments after returning a car?
No you do not have to make payments after returning a car as long as you are ok with having a repossesion on your credit history and as long as your ok with the finance company filing a judgment against you for the amount left owed after the sale of the returned vehicle.
Can you get out of a bad car loan?
Car buyers often get suckered into high interest or extended-term loans which far exceed the value of the vehicle. This is especially true for buyers with bad credit.
While debt relief and credit counseling agencies will tell you they can help, many of these companies are scams and will do more damage to your credit than good.
The truth is you can't just walk away from a loan. As soon as you stop making loan payments your lender will send the loan to a collection agency. Collection agencies will harass you and family members for payment. They can also legally garnish your wages to cover your unpaid debts. The fact that your account is in collections will also be reported to the credit agencies, and this will have a serious negative impact on your credit rating and credit worthiness.
If you cannot afford your loan payments, first call the lender. Many financial institutions have hardship programs available for people who cannot afford the monthly payments. How these programs work vary by lender.
Additionally, review all offers that loan agencies offer you before getting it. Sometimes, they do offer their clients promotions but in reality, and in the long run - this could cause you a headache and have a bad loan.
Can a husband cosign for a car loan for his wife?
What is meaning of deferred payment credit?
It can be:
Deferred Payment Credit
Red Clause Credit
Green Clause Credit
What if you can't afford the balloon payment?
Lenders do not want you to default on your mortgage. As with any other mortgage, in the case of the balloon payment, your lender will try to work with you to refinance your mortgage into payments you can handle. If you can't refinance, you may be forced to sell the property (unless the bank does it for you) to cover the balloon payment. Most people will be able to refinance, the question is just how high their rate will be. You do not have to use the same lender that your first ballon mortgage was with. Many lenders have programs for people with less than perfect credit. The only problem is your rate will be high, so you want to refinance as soon as you have a decent credit score to get a lower rate. If your balloon payment is coming due and you can not qualify for a loan because you owe more than the home is worth then talk to your lender about a shortsale or deed-in-lieu. If neither of these are available and a workout just isn't possible, it may make more financial sense for you to just walk away from the property.
Should you buy a car from a private individual instead of a dealer?
Buying a used car from a private seller is very different from buying a car from a dealer. Private sellers generally are not covered by the Federal Trade Commission's Used Car Rule and don't have to use the Used Car Buyers Guide. However, you can use the Guide's list of an auto's major systems as a shopping tool. You also can ask the seller if you can have a car inspection done by your mechanic.
Private sales usually are not covered by the implied warranties of state law. That means a private sale probably will be on an "as is" basis, unless your purchase agreement with the seller specifically states otherwise. If you have a written contract, the seller must live up to the promises stated in the contract. The car also may be covered by a manufacturer's warranty or a separately purchased service contract. However, warranties and service contracts may not be transferable, and other limits or costs may apply. Before you buy the car, ask to review its warranty or service contract.
Many states do not require individuals to ensure that their vehicles will pass state inspection or carry a minimum warranty before they offer them for sale. Ask your state Attorney General's office or local consumer protection agency about the requirements in your state.
The following tips are useful when buying a car:
- Do you homework on Carfax, KBB, eBay. Check prices. Getting a car from a dealer at Private Party price is often a good deal.
- Ask questions. Please note Carfax, Auto Check will not always show if a car has been in an accident - so have the vehicle checked out before you buy. Almost 100% of used cars sold by a dealership will have had paintwork done (and many new ones too)- so that may not always be a useful question to ask. Better to look or inspect. Do you see poorly done work? Check hidden areas for "ridges" to indicate paint that may not have been done well. (A note on extended warranties: buy cars that are at the end of their factory warranty.)
- There's an option where you can get great deals and it's still much safer than just buying from any private individual: repossessed car auctions (in particular, government car auctions). These are cars that have been repossessed by the bank or lien holder due to a lack of payment of the original auto loan, and then sold at public auctions so that the lien holder can make some of the money back. Even though you should always get a vehicle history report and inspect the car yourself, these are usually pretty safe environments, although they're attended by many professional dealers.
- Another way to get great deals (and safer than buying from a private seller) is hiring a professional negotiator. If you use a service (ex: Carsala), you can get private party prices from a dealership on a car that's been reconditioned, in good shape, clean title, etc.
Can a bank make you buy an extended car warranty in exchange for a lower interest rate in PA And if not do they have to remove the warranty from my loan since we since we told them we didNOT want it?
A bank cannot require a warranty for a car loan. If it is the bank requiring you to buy the warranty you can report them to the PA Banking Commission.
However, this is a typical scam from the car dealer saying the bank requires it when they actually don't. The car dealer is really making you buy an overpriced warranty.