car loans http://www.wisebread.com/taxonomy/term/12168/all en-US Drive the Old Car or Buy a New Car? http://www.wisebread.com/drive-the-old-car-or-buy-a-new-car <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/drive-the-old-car-or-buy-a-new-car" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/car-126488331.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>When I was growing up, my mom drove a gray Oldsmobile Omega. By the time I was old enough to notice such things, it was an old car &mdash; much older, and clearly less luxurious, than those most of my friends rode to school in. When the plastic knob broke off the end of the shifter, it was replaced with a huge wooden one. When we hit a bump in the road, the radio hissed with loud static. Near the bitter end, duct tape held up the driver-side window.</p> <p>When my mom finally got a new car during my second year of university, I was relieved. But when &ldquo;Old Gray&rdquo; recently came to mind, I found myself feeling less embarrassed than grateful. Here&rsquo;s why. (See also: <a href="http://www.wisebread.com/7-ways-my-clunker-is-smarter-than-a-hybrid">7 Ways My&nbsp;Clunker Is Smarter&nbsp;Than a Hybrid</a>)</p> <h3>Do You Want a Nice Car, or a Nice Pile of Cash?</h3> <p>My parents were fiercely (and at the time, inexplicably) loyal to their reliable old car. In fact, when I admired newer cars on the road, my mom would sniff, and say, &ldquo;Yeah, but this one is&nbsp;<em>paid</em> for.&rdquo;</p> <p>At the time, I had no idea what that meant. I knew that both my parents had good jobs, so why couldn&rsquo;t we have a <a href="http://www.wisebread.com/the-joy-of-buying-a-new-car-9-car-buying-tips">new car</a> like everyone else? The answer &mdash; the cost was just too steep, and in more ways than one. According to the Federal Trade Commission, the average cost of buying a new car is approaching $30,000. At an average interest rate of 6.5%, that $30,000 car would mean monthly loan payments of $586.98 per month for five years. Put that money into an investment that returns 5%, and you&rsquo;ll end up with more than $40,000 in the bank in that same five-year period. Shelling out a lot of money to keep yourself in a nice ride is fine, if you can afford it. But with a national savings rate of just 4.5% of <i>disposable income</i> (not total income!), and many people arriving at retirement without a penny in the bank, chances are that a nice ride is further out of reach than most people realize.</p> <p>Just about everyone is guilty of a little &ldquo;keeping up with the Joneses,&rdquo; but there&rsquo;s a big difference between being able to afford something and being able to afford the payments. Next time you catch yourself envying what someone else is driving, think about what you might really be aspiring to. While I may have been rattling around in a beater as a kid, what this meant was not that my parents were poor, but that they were saving their money. And, as it turns out, that&rsquo;s not as lame as I had assumed.</p> <h3>Living in the Fast Lane Can Lead to&nbsp;Financial Crash and Burn</h3> <p>As my mom prepares to retire, I&rsquo;ve found yet another reason to be grateful for Old Gray &mdash; because we didn&rsquo;t ride around in a car my parents could barely afford, I don&rsquo;t have to spend my adult life trying to figure out who&rsquo;s going to finance my mother&rsquo;s retirement. This is no small thing. A recent report released by Massachusetts Mutual Life Insurance Company stated that only 3 out of 10 American parents believed they were adequately preparing for retirement. Plus, those parents were planning to have to care for their own parents as well.&nbsp;</p> <p>My parents stuck it out with Old Gray for more than 20 years, which was pretty unusual then &mdash; and very rare by today&rsquo;s standards. But, because of this and other similar choices, their retirement will not be something that will fall to me, which means that I have a shot at <a href="http://www.wisebread.com/how-to-tell-if-youre-on-track-for-retirement">retiring comfortably</a> too.</p> <h3>The (Somewhat Sensible) Way I Roll</h3> <p>Now you&rsquo;d probably expect that I&rsquo;d end this by telling you that I drive an old, reliable car. I don&rsquo;t. I bought it used, and I went for reliable &mdash; but I paid the price for a turbo engine and heated leather seats. What that says about <em>my</em> desire to keep up with the Joneses may be another story altogether, but what I do know is that while I&rsquo;ve taken some pains to drive a nicer car than my parents would ever buy, there is a limit to how much I would sacrifice for that experience &mdash; saving and investing will always come first. And if that means I&rsquo;m still driving the same car 20 years from now, so be it.</p> <p>Oh, and one more thing &mdash; Old Gray is still on the road. Perhaps my parents could have held on to it a little bit longer.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/drive-the-old-car-or-buy-a-new-car">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-used-car-salesman-reveals-dirty-tricks-and-how-to-beat-them">A Used Car Salesman Reveals Dirty Tricks (and How to Beat Them)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-this-the-best-search-engine-ever-for-new-used-cars">Is This the Best Search Engine Ever for New &amp; Used Cars?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-safest-cars-for-teen-drivers">The Safest Cars for Teen Drivers</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/can-t-afford-your-car-much-longer-negotiate-to-keep-it">Can’t Afford Your Car Much Longer? Negotiate to Keep It</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-top-10-cheapest-cars-to-insure">The Top 10 Cheapest Cars to Insure</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Cars and Transportation Retirement Buying a new car car loans used car Wed, 09 Nov 2011 10:24:33 +0000 Tara Struyk 778732 at http://www.wisebread.com Can’t Afford Your Car Much Longer? Negotiate to Keep It http://www.wisebread.com/can-t-afford-your-car-much-longer-negotiate-to-keep-it <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/can-t-afford-your-car-much-longer-negotiate-to-keep-it" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/car matt banks.jpg" alt="Car Loans" title="Car Loans" class="imagecache imagecache-250w" width="250" height="187" /></a> </div> </div> </div> <p>As so many are still struggling to manage paying their regular bills while living paycheck to paycheck, every day another car gets repossessed because families can no longer afford to finance their vehicles. Last year alone, more that 1.9 million vehicles were taken from those who defaulted on their loans. Just like the mortgage industry, people are seeking ways to keep their cars and still be able to afford the essentials.</p> <p>Consumers may still have options even when their pay has been cut or their job has been lost. Auto lenders and banks prefer to keep people in their vehicles rather than go through the repossession process. More lenders are willing to negotiate an auto loan modification these days and it may be in your best interest to ask for help.</p> <h2>Modification Options</h2> <p>Essentially there are two ways you can go about getting help. The key to getting that assistance is to be upfront with your lender about your financial situation and be proactive in your request. Don&rsquo;t wait until you are three months behind on your loan and the repo man is in your driveway before taking action. As soon as you sense a struggle with meeting your loan obligation, get on the phone.</p> <p>The two options for assistance are:</p> <p><em><strong>Extension of the loan term</strong></em> &ndash; if you ask about extending the term of your auto loan, the lender will allow you to tack payments to the back end of your loan. For instance, the lender agrees to forbear three months worth of payments for May, June, and July. Those three months will be added to the end of your loan term and you are not obligated to pay on your note during the agreed upon three months. Likely your lender will charge a fee for this extension so be sure to ask about it when agreeing to the extension. Some lenders will only allow for one extension during the life of the loan but again, it doesn&rsquo;t hurt to ask your lender directly.</p> <p><em><strong>Lowered interest rate</strong></em> &ndash; you might consider speaking to your lender about lowering the interest rate of your loan which will help to lower the monthly payment, making it more reasonable for you to meet your obligation.</p> <h2>Refinancing Your Loan</h2> <p>The process of refinancing the existing balance of your car loan can be a complicated process. More lending institutions are now advertising loan modification programs for vehicle loans but in a somewhat misleading way. Consumers are often led to believe the refinancing process is simple and instant. It may be in your best interest to skip the refinance with another company and stick with your original lender to negotiate help.</p> <p>Remember that you will likely need to have a reasonable excuse as to why you can not paid. Job loss or illness may be acceptable reasons for why you might default on a loan. Bad money management is not a valid reason. Most lenders are willing to work with customers since the recession has financially damaged so many around the nation but they are still a business operation looking to get paid what they are owed. Make contact with your lender as soon as you think trouble is on the horizon and figure out what options make sense for your financial situation.</p> <p>The worst thing you can do is ignore the situation until it gets so far out of hand that the law gets involved or your credit gets ruined. Debt does not go away and only gets worse over time. You have options to keep your vehicle so exercise those options and save your car and credit for the future even if you are still scraping by each paycheck.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tisha-tolar">Tisha Tolar</a> of <a href="http://www.wisebread.com/can-t-afford-your-car-much-longer-negotiate-to-keep-it">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/drive-the-old-car-or-buy-a-new-car">Drive the Old Car or Buy a New Car?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/remove-car-dents-quickly-and-cheaply">Remove Car Dents Quickly and Cheaply</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-why-you-should-never-buy-a-new-car">3 Reasons Why You Should Never Buy a New Car</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-you-should-always-buy-used">8 Things You Should Always Buy Used</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/17-things-car-salesmen-dont-want-you-to-know">17 Things Car Salesmen Don&#039;t Want You to Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Cars and Transportation auto loan modification auto payments car loans lenders Mon, 31 May 2010 13:00:08 +0000 Tisha Tolar 102670 at http://www.wisebread.com