What Type of Car Finance Is for You?

Personal Loan

Personal loan is perceived to be the most popular way to finance a car according to many surveys.

Borrowing money from a bank, building society or other lender gives you instant ownership of the car. Comparison websites such as money supermarket will show you which lenders offer the best deals.

The annual percentage rate (APR) is the easiest way to compare loans, and essential in working out how much a loan will cost you over the repayment period chosen. If the APR isn’t mentioned then ask the question, the headline rate is not always what you get it depends on your individual credit rating.

It’s a temptation to take a longer repayment period which makes the monthly repayment smaller but you will pay more interest. Keep the loan period as short as possible.

The downside to a personal loan unsecured is that in the event of default any of your assets could be seized. With dealer finance only the car is at risk in the event of payment default.

Go for a personal loan if you say YES to any of the following:

• You don’t have any deposit
• You want to own the car outright
• You plan to keep it for a while
• You don’t want annual mileage restrictions

Hire Purchase

After a bank loan hire purchase (HP) is the easiest way to buy a car.

Under HP agreements there’s usually a deposit to pay, typically 10% followed by fixed monthly payments. The car is owned by the HP funder until it’s paid for including any option to purchase fee. At that point the customer has the right to sell the vehicle.

However some customers do sell their cars before the final payment and the good news is for buyers of non-paid up cars is that the law protects private purchasers who buy without knowing the car is not fully owned and no matter what the police or anyone else tells you will get good title if you buy a car on HP in these circumstances. The finance company can ultimately take action against the seller but that’s not your problem.

The credit on an HP agreement is secured against the car, so it’s like dealer finance in that the car can only be seized in the event of default. If you need to sell the car before the end of your agreement you will have to settle the outstanding monies first and early settlement fees may apply.

Go for HP if you say YES to 1 of the following:

• Ultimate ownership is important to you
• Your budget and circumstances suit fixed monthly repayments
• Your disposable income may decrease over the agreement term (eg if you’re planning a family)
• You like credit secured against the car only
• You don’t mind not owning the car until the debt is fully paid.

Personal Contract Purchase (PCP

This product is probably the most popular product of all.

It’s a bit like HP in that you pay a deposit, a fixed rate if interest and monthly repayments usually over 12 to 48 months.
Where PCP differs from HP is at the end of the agreement you have 3 choices.

1. Return the car to the supplier
2. Keep the car
3. Trade the car in against a replacement

The first option returning the car costs nothing, unless you’ve gone over an agreed mileage or returned the car in poor condition. In either case there will be an excess to pay.

Keeping the car means making a final “balloon” payment. This amount is the cars guaranteed future value, or GFV, which is set at the start of the agreement.

The GFV is based on various factors, including the length of the loan and the anticipated mileage as well as the cars projected retail value. If you exercise this final buying option, you can continue to run the car, or you can sell it and pocket any equity above the GFV that you have paid back to the finance company.

If you’re trading in your car, any GFV equity can be used as deposit towards its replacement.

If your car has gone into negative equity which can happen you will have to make up the difference. Shorter agreements are more likely to accurately project the GFV.

Go for PCP if you can say YES to 1 of the following:

• You want lower monthly payments
• You like the flexibility of options at the end of the agreement
• Trade the car in against a replacement

Personal contract hire (PCH)
This product is basically renting your car for typically 2 or 3 years with an agreed mileage limit. There is no option to buy the car at the end of the contract you just hand the car and the keys back to the finance company. Your payments are covering the cars depreciation.

While you’re running it, you’re responsible for its upkeep. On the plus side, the deposit is low as are the fixed repayments and you can negate the impact of repair bills by including a maintenance element into the agreement.

Cars that hold their value well are a good PCH option because the difference in their new and three year old values will be smaller so you will repay a lower amount whilst cars that plummet in value will see you pay more.

Go for PCH if you can say YES to 1 of the following:

• You don’t want to own the car or suffer its depreciation
• You like being able to change cars often
• You like the idea of driving better cars than you could normally afford
• You don’t mind looking after cars

Dealer Finance
Research is a must here as motor dealers love lazy buyers who haven’t done their research. There is no point in haggling on vehicle price if you waste it all on a poor finance deal.

Check out detail on current and forthcoming manufacturer finance deals. These might include interest free or low APR rates or deposit contributions.
Don’t fix on the rate or monthly payment though look at the total repayable to understand the total cost and compare with what you can find in the open market.
Also don’t assume that a dealers finance rate is set in stone, everything is negotiable. Take time to go through things you are not sure about and get the final offer in writing.

The only thing at risk if you don’t keep up dealer finance repayments is the car. Bear in mind that even with sweeteners thrown in the dealer will still make money somewhere in the deal and you are paying for it.

Go for dealer finance if you can say YES to 1 of the following:

• You like the convenience of “package” deals
• You’re happy to do some comparison research
• You don’t want to do the research but you don’t mind paying extra

Self – finance
If you want to own your car using your own money by buying outright it does make some sense when UK savings rates are so low. Buying a car outright is also a sensible alternative to leasing if your mileage is high or unpredictable because of excess mileage charges.

Using a credit card be an advantage as many funders offer 0% on balance transfers and purchases. You can avoid paying interest charges altogether by changing you card at the end of interest free periods.

Positioning Your Company for Debt Financing

Positioning Your Company for Debt Financing:

There was a time in the old days when going to the bank was the only way to get outside capital for your business. These days with the explosion of raising equity investment, many of the guidelines for running a company have been revolutionized. Unfortunately this new phenomenon is only true for companies with super “star power”, because these companies have potential to create sky-rocket return earnings.

For everyone else, sticking to fundamentals is where it’s at. Building your company incrementally, following a pre-prepared business plan, watching expenses, and increasing sales. When your company moves beyond its launch, it begins to operate much like a bank. On the financial side you will be making credit decisions
involving your customers. Some will have to pay C.O.D., some you will extend net 30 day terms. In this sense you are now becoming a banker for your customers.

Without getting into how inexpensive debt financing ultimately is compared to equity (try 20% annualized interest versus 20% ownership lock stock and barrel), in certain situations the time honored tradition of borrowing money can be the best solution for increasing growth or starting a company.

By knowing what commercial finance companies look for, you will become a much more attractive prospect.

1. Concentration – This means putting all your eggs in one basket. Avoid going out and making a large sale to a customer and then not continuing your sales effort to find more customers. The risk of a problem developing with your main customer, or for whatever reason they are no longer buying from you can obviously be detrimental to your success. Finance companies look for incoming revenue to be spread evenly over a number of customers.

2. Creditworthiness – Who are you lending your hard earned assets to? What kind of due diligence do you perform on new customers? The challenge here is whether to accept a lucrative sale with a company that could never get credit from any type of finance company. You are essentially telling yourself that you know better than the banker about loaning money. Finance companies will respect a business owner that has a thorough credit checking process and a number of stable credit worthy customers.

3. Book keeping – While some businesses send out all their accounting to outside agencies, it is helpful to have a qualified book keeper on staff. When it comes time to seek financing, being able to produce an instant fiscal snapshot of your company will show the sophistication of your operation. Finance companies appreciate businesses that keep a close eye on their books.

4. Taxes – Pay them. Using the Internal Revenue Service as your funder becomes expensive. Whenever you work with a finance company, you will be pledging assets as collateral, thus the nature of debt financing. When you fail to make tax payments, the government steps in and places a lien against those same assets essentially stepping into first position. This leaves the finance company with money outstanding to your business and no collateral to back it up. This places your entire relationship in default. When going to closing on financing expect to sign a form that allows the finance company to receive duplicate correspondence from the IRS. This is standard procedure to track tax problems. Owing taxes does not mean you cannot get financing. It is entirely possible to receive a subordinated debt agreement from the IRS which allows the finance company to work with you unencumbered.

5. Bankruptcy – If you have ever entered into a bankruptcy proceeding whether personal or business, own up to it right away. It will come out, and being up front about the circumstances will enhance the necessity to overlook the past difficulties.

6. Applications – Finance companies ask for a variety of information when performing their due diligence. Do not be alarmed, they are not trying to steal your secrets. They need to feel comfortable with you and your company. Each company has its own threshold for fact checking. Invariably the finance companies that do the most thorough job are the most reliable and safest to do business with. Finance companies like working with a business that takes the time to put a loan package together in advance of asking for financing. Typically you can start with; Interim Balance & Income Statement, Interim Profit & Loss Statement, Last Year End Statements, Accounts Payables Aging Report, Accounts Receivables Aging Report, and of course Tax Returns.

7. Contracts – Be prepared for onerous language. Finance companies cannot sugar coat the reality that if something goes wrong they need to exercise their rights. They have to go into the relationship always thinking that the absolute worst case scenario will unfold. Once a finance company finds itself being defrauded, stolen from or payments not made without explanation, it’s too late to insert stronger language for protection. By and large the language is standardized and walking from a deal to start shopping for less demanding legalisms won’t produce much. Remember this, a contract is just paper in a file cabinet until you default on your agreement. Stay within what you agreed upon and all the tough language won’t matter. Even if you start having financial difficulties, get in touch with your finance company immediately. You can greatly reduce the chance of default by showing that you are pro-active with your situation.

8. Using the money for the right reasons – This sounds obvious but in certain cases it can be highly relevant. You hear a lot about going to the right Venture Capital Firm that would handle your type of investment. In some ways that holds true for debt finance companies. They tend to work within industries that they feel comfortable. Additionally the type of financing company will depend on your plans for the money. If you are trying to set up a new business infrastructure, then a working capital line of credit is not your best option. You will probably do better with a term style loan that will allow you to amortize the expense over a period of years.

9. Management Integrity – Also like equity investment, get a good team together and hold onto them. Finance companies raise red flags when a long time Financial Officer who has been the contact person at the company since the inception of the relationship all of a sudden leaves without explanation. Again, always fearing the worst, the finance company could unjustly feel that something untoward was afoot and begin to scrutinize your account more closely. Even though finance companies are not part owners of your business, they are partners in your success just like your good customers. Keep them abreast of breaking news.

10. Be Professional – Answer calls and messages expeditiously, be prepared with information, show up on time. When its crunch time and you need an extra fifty thousand dollars for a week to get a better deal from a vendor, you would be surprised how much mileage you can get by being a courteous and thoughtful customer to your finance company.

Fabulous News For First Time Home Buyers

What fabulous news for first home buyers, a whopping $21,000 towards deposit, expenses or even new furniture if you buy a brand new home before June 2009. So if you’re ready to take the plunge and sign up for what is likely to be the biggest commitment you’ve ever made, now, more than ever, seems to be the perfect time to get into the property market as a first home buyer. Even though your friends and family will be full of advice, as with any major decision in our lives, it’s always good to take their experiences and opinions on board, however your own research will give you peace of mind and assurance, before you sign up for the big purchase and possibly sign your life away to the mortgage company.

Generally, most first home buyers already have an idea on the location and the type of home they want, so now it’s just a matter of finding out whether you can afford what you want to buy. Almost all the major banks and other lenders offer special packages with reduced application fees and lower interest specifically for First Home Buyers. With the help of some comprehensive search engines, shopping around not only for a home loan, but a property is almost as easy as 1 – 2 – 3, so jump on the internet and let your fingers do all the work for you. It’s important to remember that the bank can’t lend you all the money to buy your first home. As a first home buyer, at least a small part of your deposit will have to come from your own savings or alternatively a gift from your relatives. Once you find the right home loan, apply for a pre-approval. This can be done either online or in person. A pre-approval is the bank’s preliminary approval subject to an acceptable property. You will need to provide a completed application form along with requirements such as your identification, income evidence and savings (gift) verification. Once the bank is satisfied that you’re an acceptable first home buyer, they will issue a pre-approval and you can start shopping around for your first home.

So when and how do I apply for a First Home Owner Grant? The First Home Owner Grant is only available to Australian residents and citizens, so before you apply you should contact your state revenue office, alternatively visit their respective website for more information. If you satisfy all the first home buyer criteria and conditions, there are two ways you can apply for your first home owner grant. If you apply for your first home owner grant via your bank, you’re likely to receive the grant at settlement, so on the day you officially become a home owner. If you apply for the grant directly with the state revenue office, the grant is not likely to come through until after the settlement. The best way is to keep in regular contact with the lending manager of your chosen bank. Remember, they help first home buyers every day and are the best source of information and guidance, so don’t be afraid to call them if you have a question, after all, they’re here to help you.

Debt Consolidation Breaking News

The United States Department of Education is making bold moves toward cleaning house and we will talk about some of those that affect you as a parent of a soon-to-be college bound child directly. We do not want to leave out the millions of Americans that are returning to school and are the students themselves-but the largest percentage of school bound individuals are still under the dependent financial care of the parents. We titled this posting debt consolidation breaking news for a very good reason. That reason is as we go forward towards Halloween in the month of October it is time to start laying the groundwork for the upcoming winter school session in most parts of the United States.

Reformation in America

As debt consolidation is being reformed in America today and with President Obama taken the reins on so many financial concerns it is important that you know something about the debt relief situation going on the country. While you may consider yourself well-versed in the basic modality of what debt relief actually is you need to understand how that relates to the student loan obtainment for your incoming freshman. There are literally millions of freshmen that enter colleges and universities and technical schools all across this great country of ours and it is important that the parents of these soon-to-be college educated children know where to turn to for advice and information about that all-important student loan issue.

Department of Education Enactments

The most breaking news that involves debt consolidation includes the actions of President Obama’s administration as well as the Department of Education directly. The administration has mandated through acts of legislation and other such legalities that the middlemen are now cut-out of the equation for all concerns about student loans.

Saving Money

What this does right away is to save you, the American taxpayer, at the very least $500-$1000 a year in monies that was going toward the pavement of the third-party providers for student loans. Now that there is a direct-line of communication between you, the parent of the college-bound child, and the Federal government, which is the Department of Education, the streamlining of this form of financing of a college education is clearing up.

Great Intentions

We wanted to give you some earth-shattering as well as fundamentally groundbreaking news but in reality the debt consolidation world has so much going on it is important that we focus on the present and future and not so much worry about things of the past. If you are a parent of a student who is presently in high school you understand this and you understand that the future belongs to our children. With debt consolidation clearing the household and freeing up cash that would have been spent on credit card revolving debt and other unsecured debt loan accounts you will be that much closer to financing the dream of your child and of yourself of completing a college education in America in the 21st century.

Facts About Google Finance

Google Inc is one of the most respected companies in the world and, according to Fortune Magazine; it is also the most preferred employer in the world. It is a fact that “Google” has become a part of our vocabulary and is synonymous with online searches. Many young people use the term ‘Google it’ instead of saying ‘search it’ which shows the degree of impact it has been able to create on people. Many important and useful services are offered by this company apart from the search engine service, they are mainly YouTube for video hosting, Orkut for social networking and a recently launched service called Google Finance etc. Apart from the internet based services the company is also the developer of the popular mobile operating system called android. Thus, it’s a giant corporation with billions of dollars in assets and turnover and a business module which is diverse, expanding and advanced.

Google Finance:

It is a service that was launched in 21st of March, 2006 and has been active since then and is available in most countries around the world. The first Non-US country to have it was Canada; it was designed to provide a specialized search experience for information about the financial sector like trends, live market updates, stock news, financial news from around the globe etc.

Surprisingly not too many people use it or are aware of the various facilities associated with it. There are many advantageous of this financial service, they are:

1) It is an absolutely free of cost market information guide which takes live feeds and provides real time market information.

2) It takes input from search results on a given day to predict the kind of stocks or FOREX that people can trade in to reap maximum profits. As it is the market leader in search engine, so it has a reliable database to get the required information for such kind of predictions.

3) It has a unique feature called ‘get quotes’ through which we can get real time information about stocks of a company listed with NASDAQ. For example, if we type in ‘HP’, it will give us the current stock value of ‘HP’ as per NASDAQ.

4) Google Finance contains vital statistics about the monthly, quarterly and annual financial performance of various MNCs which can help people in deciding about the kind of company they can invest their money on.

Financing Car Parts – The Do’s and Dont’s

So you’re looking for some new car parts to compliment your cars appearance and attitude on the road. Great! You’re just like most people driving down the highway. In fact, most people take pride in their vehicles appearance and performance, and spend lots of money on extensive modifications. However, this can get costly.

Sadly, not everyone can feed their need for speed with their current salary. Thankfully, there are a few services out there that allow you to pay for your purchases over time. This can be convenient for emergency repairs such as blown head gaskets, transmission failure, or other catastrophic failure that requires a fast repair, allowing you to get back on the road. These services can also be used to purchase parts that aren’t necessarily an emergency, but still desired by the owner.

I’ve found a few car part financing options, and I’ll provide some information about them in hopes of informing you to make the right decision if you see yourself in a situation requiring you to finance car parts.

PayPal Credit – PayPal credit, formerly known as BillMeLater has been around since 2000. Users sign up for free, submit information for a credit check, and can begin making purchases if approved for an account. Payment terms are typically set in increments over six months or until the total cost is paid off. If the total is not fully paid off after the six month period, an interest rate of 19.99% is applied in the form of a late fee. If considering using PayPal Credit, keep in mind the payment terms and be wary of the high interest rate. PayPal Credit is a good option for financing car parts since it is used by many e-commerce sites who typically have lower prices than many brick and mortar establishments.

CarCareONE – CarCareONE is a car part finance service which works very similar to a credit card. Run by Synchrony Financial which has been around since the 1930′s, CarCarONE allows to you make monthly payments on routine maintenance, trips to the gas station, and emergency repairs with moderately low interest. Furthermore, no interest is applied to your purchases if they’re paid off within 6 months. To sign up, you must apply and consent to a background and credit check before making purchases. CarCareOne is great for emergency purchases as it is accepted at more than 16,000 establishments nationwide, but keep in mind the high interest rates if not paid off with the first 6 months.

Affirm – Affirm is a relatively new way to finance car parts, but offers the most leniency on credit. Just like PayPal Credit, Affirm offers a line of credit for users to spend on purchases. However, this line of credit is not fixed, rather underwritten depending on the amount and the merchant purchased from. Affirm applies small finance charges with each payment, so you risk paying more over time if you decide to split your purchase into multiple payments, but the rates are generally small. Affirm is a great option for users who want to purchase parts but would prefer paying for the item over time without risking long term high interest rates seen with PayPal Credit and CarCareOne. Remember, Affirm doesn’t affect your credit line, so this method may be the better option if your credit is low.

Hopefully this article has cleared up some questions you may have regarding how to finance car parts. While it may not always be the best option for long term, it is a great choice for emergencies!

Bad Credit Special Finance Car Loan – 5 Tips For Getting Funded Faster

If you happen to get extremely lucky, finding the right deal on a car loan sometimes can just sort of come together. It is almost like the Universe were helping you out: you see a commercial or research a great car online, walk into the dealership, make an offer (which they quickly accept), and then, you get a great deal on financing. An hour or two later, you are driving home in your new car with a smile on your face.

However, for most of us, landing a great deal on a car loan is not nearly that easy. The more common story that people tell is haggling with the dealer over the right price for an hour or more. Then, they spend more time negotiating with the financing department to get a good deal on a car. In the end, they leave the dealership without getting the offer they were looking for – or maybe no offer at all.

If the second situation sounds the more familiar of the two, you may have a less-than-perfect credit score. Having a bad credit score makes it harder for anyone to qualify for a car loan. Fortunately, there are ways to get qualified through a bad credit special finance car loan.

If you are looking for a bad credit special finance car loan in order to get the car of your dreams, here are 5 tips for getting funded faster:

1. Understand what bad credit special finance car loans are:

Start your journey to faster funding by learning about what a special finance car loan is. These are loans offered specifically by bad credit auto lenders. They are special because they are designed to work specifically with people in your credit situation.

2. Locate the websites of at least 5 bad credit special finance lenders:

Now that you know what lenders to look for, search for and locate the websites of these special lenders. Look for “bad credit car loans” and similar search terms in order to get your list started.

3. Evaluate each lender and look for the 3 signs of credibility:

Now, go through the website of each lender. What you should be looking for at this point is signs that they are going to be credible lenders. These are: a. they list out what other customers say about them, b. they give you the opportunity to pre-qualify, and c. they have active partnerships with auto dealers.

4. Pull your free credit report and fix any misreported items:

Now, if you are a U.S. citizen, pull your annual free credit reports. You can get one each per year from TransUnion, Equifax and Experian. Go through them like a good detective would, and make notes on anything suspicious or incorrect. If you find anything, get these errors corrected.

5. Follow through with submitting applications to at least 3 lenders:

Now, choose the top 3 most credible looking lenders and apply to all of them. You may get one, two or three offers. You will then be in the position to compare rates. Hint: ask for a pre-approval letter and walk it into the dealership in order to purchase the car of your dreams.

Where To Finance Cars Online

When buying a car, it is always advisable to pay in cash. Of course, life being the way life is, that kind of scenario simply doesn’t happen often enough for the average buyer. As such, buyers are left with the option of having to go through some sort of financing procedure. Among some of the recent developments with regards to financing auto purchases would be the ability to the finance car online option. There are several organizations online that will gladly help someone finance their recent purchase. These groups usually only need little information and filled-out applications to finance car online.

Most groups that allow you to finance car online offer flexibility in their payment terms. These companies are not typically as difficult to convince as a bank would be if your credit rating is not all that positive. Their payment terms, such as the length of time you have or the way the interest is spread through that term, can be adjusted to each situation. Like a bank, these institutions will ask for some sort of initial payment but from there, some of the details vary. One prime example of the variations in details would be how the interest is spread. Some banks have a tendency to lump the interest either at the start or at the end of the payment term, rather than spread it out evenly. In contrast, these online financing organizations consistently spread out the interest evenly across the term, allowing the buyers to be able to better plan their payment budget.

In terms of information, these “finance car online” companies tend to ask for similar information to their real world counterparts. In other words, they’ll ask for your name, address, phone number, any other pertinent contact information, and likely, a social security number. Since these organizations cannot see bank statements and the like, they will also ask for your credit card number, to review your credit information before approving the terms set out for your financing agreement. Some of these groups also like to check on other financial details, such as whether or not you have a currently outstanding debt or you were able to pay off any previous debt on time. A state of bankruptcy, of course, can kill your chances of getting your financing application approved.

The different websites of these organizations also have different additional features. Some websites offer services like car insurance or computations on the estimated amount of interest you’ll have paid off once the financing term is done. Some organizations also have certain ins and outs in their agreements that may not appear on those of another organization. In the end, these finance car online groups have as much subtle differences in the way they work as their real world equivalents. As such, the task of finding one that suits your needs is a matter of patience and research.

Regardless of which website you choose to finance car online, they all offer flexibility that you cannot get in most banks. While these finance car online sites do carry a certain level of risk to them, they are still viable options for your car purchase financing needs.