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Federal unemployment benefits ended for many states in the first week of September. This comes as a result of increased vaccinations, the reopening of most businesses, and an improving job market. While this may be good news for some, for others it means that the extra $300 a week that they were relying on to make ends meet is now gone. In this article we look at the unique economic position COVID put us in and give you some tips on how to manage the end of unemployment benefits.Here are some tips and tools to handle the end of unemployment benefits and help you balance your budget.How Spending Changed During the PandemicAccording to an Experian survey, 66% of consumers reported spending the same or less than they did in pre-pandemic 2019. The biggest reductions were reported in the following areas:30% said their biggest budget change was a reduction on eating out and entertainment23% said their biggest budget change was a reduction on nonessential purchases16% said their biggest budget change was a reduction on travel expensesYet despite this, a deeper look at these categories reveals that the reduction in savings wasn’t as drastic as some may think. The sharp uptick in online shopping replaced runs to the store, ordering on GrubHub or DoorDash replaced eating out, and increased entertainment subscriptions like Netflix and Hulu replaced entertainment purchases. A CNBC survey found, notably, that there was an increase in pet ownership and spending. There was a 23% increase in spending on pets during the pandemic, which is not surprising given that so many people were now stuck at home (and hey, what’s better company than a furry friend?)  So while spending may have been reduced slightly, it ultimately shifted to other areas.The most significant cuts to spending that were not easily replaced with other spending habits were travel and gym memberships.How Saving Changed During the PandemicTheoretically speaking, any saved income could be allocated to a savings account. A Credit Karma study revealed that only 28% of those surveyed said they were actually saving during the pandemic. When this was further broken down by employment status, it is unsurprising that those who were able to save were primarily those who maintained steady work throughout the pandemic.32% of people with full time jobs reported saving more than in 201934% of people with part time jobs reported saving more than in 20198% of unemployed people reported saving more than in 2019People who were able to transition easily to working from home were able to maintain their normal income while reducing their spending, even if only slightly. Those savings were reported to vary in intention from building an emergency fund, to making an investment such as a mortgage or a down payment, to paying down debts. But ultimately savings have been cut drastically during the pandemic. Credit Karma surveyed those who reported not saving at all during the pandemic. When asked why, they cited the following:21% said they had become unemployed as a result of the pandemic38% said they had lost hours or wages because of the pandemic32% said it was because of increased expenses during the pandemicBut why did expenses increase for some, while not for others? Research has shown that middle and lower income families saw increased expenses with the pandemic for the following reasons:The inability to shop around for the best prices on groceries and other necessities.Delivery minimums from stores made it difficult to split orders to multiple stores, again hindering the ability to shop around for deals.Increased energy and water bills.Costs associated with homeschooling and working from home (laptops, internet, etc).All of this adds up to a situation where people were making less money and in many cases spending more money. That was when the federal unemployment came in to bail out working families.How Unemployment Assistance HelpedThe people who were struggling the most during this time were the service industry professionals, gig workers, and retail employees that were forced out of work. For these people, the Pandemic Emergency Unemployment Compensation (PEUC) was passed at a federal level to provide assistance. This was put in place as an extension of states’ unemployment compensation, which expired 8-10 months after the original unemployment began. This extra $300 a week became a necessary addition to so many people’s budgets. With the reopening of the economy and increased vaccination rates, many businesses are now hiring and the unemployment benefits are coming to an end. The additional unemployment assistance ended for most people in early September. For many, this will be another difficult transition. Jobs are not filled immediately and there are often gap weeks between unemployment payments and paychecks from their new employer. Let’s look at some tips for preparing for another period of economic uncertainty.How to Manage Without Further Unemployment AssistanceMake a BudgetThis seems simple, but it is the most important thing you can do for your finances. Simply start a spreadsheet and start doing the math:Make a column outlining each and every expense you have. From your electric bill to your HBO subscription to your car loan payment. Record everything.Make a column outlining every source of income you have. Your income, your partner’s income, and any side hustle you have going on.Add ‘em up! Save If You CanIf your income is higher than your expenses, take the remaining amount of money in your budget and divide it further. Can you afford the fancy coffee two times a week? Great! Give yourself an allocation of “just for me money” where you can buy the non essentials. Try to add a saving item to your budget if you have the extra money. You should aim ultimately for 10-15% of your income to go to savings, whether it is a 401K or an emergency fund (everyone should have an emergency fund for when the unexpected happens).Cut Expenses If You Need ToIf your income is lower than your expenses, you have to make some tough choices. What can you trim out that you don’t need? The easiest things to get rid of are subscriptions. Ditch Netflix and Apple TV and save $20 a month (you can beg for a friend’s password, no?). Check your bank accounts for any subscriptions that may be on auto-renew that you may have forgotten about. See if there is a cheaper plan for your cell phone or cable. Try to trim the fat anywhere you can. If you have a car loan, look at your terms and see if car refinancing is a good move for you. Interest rates are low right now to encourage spending, and if your credit is in good standing you might be able to save a good deal of money each month by refinancing to a lower interest rate. Look for a Side HustleWith so many companies transitioning to work from home, there are many part time side gigs that you might be able to get in this economy. There are loads of customer service and data entry positions that are work from home and only require 10-15 hours per week. This extra bit of cash could make all the difference for your budget.Other Savings TipsThere are several small scale changes you can make that can add up to big changes over time. Check community bulletin boards for free local events. This can cut your entertainment budget a great deal.Prepare a thorough grocery list. Plan out your meals for the week and resist impulse buys while shopping. And while you are at it, buy the generic versions of things. You’ll save a lot and you might not even notice the difference.Bundle your cable and internet. You can save close to $50 a month by doing so. Make your own gifts. Pinterest is your friend! Keep an eye on your electric bill. Small changes to your habits can add up to big savings.Unsubscribe from marketing emails. If the temptation to shop online isn’t there, it’s easier to cut back.Cut back on the fancy coffee. It’s hard, we know. But $5 a day, 5 times a week on fancy coffee adds up to $100 a month. If it’s not in your budget, cut it out.Budgets can be hard and they can be boring. But budgeting is the best way to keep an eye on your finances and make sure you are not getting in over our head. The loss of the added unemployment funds will be difficult for many, but we hope that some of the tips outlined here can help you save some money here and there.If you are looking for some extra money every month, it is worth looking into refinancing your auto loan. With the low interest rates being offered today, there is a good chance you can save a significant amount of money. At Auto Approve, we are passionate about saving people money. Let us save you money today!GET A QUOTE IN 60 SECONDS

Refinancing can be useful for many reasons, but the intent is always the same: save some money, either in the short term or in the long term (or both, right?) Whether you’re looking to save some cash in the long run, or just loosen up your day to day budget, car refinancing might be the right move for you. Here we discuss the top three reasons you should consider refinancing today.Reason #1: You Can Get a Lower Interest RateThere are a number of reasons why you might be able to secure a lower interest rate. And if this is the case, it is absolutely worth looking into vehicle refinancing. A lower interest rate can reduce how much you will end up paying in total on your car, as well as reduce your monthly payments. And who couldn’t use some extra cash every month? Let’s look at some reasons you might be able to secure a lower interest rate.Your Credit Has ImprovedYour credit score is the biggest factor in determining an interest rate. Credit scores help lenders to gauge how likely you are to repay the loan they are giving you. Let’s look at how credit scores are calculated, and how changes in your finances affect your credit score.35% Credit History (On time, consistent payments)30% Credit Utilization Score (Your total debts divided by the total credit available to you)15% Credit History Length (The age of your accounts)10% Credit Mix (How diverse is your credit portfolio)10% New Credit (New accounts and credit inquiries)A change in any of these areas can result in a change in your credit score. Say it has been two years since you took out your original loan. Since then, you have made every single payment, not only for your auto loan but for your mortgage and credit cards. You made a budget and stuck to it, and it paid off. This can offer a major boost to your credit since credit history accounts for 35% of your score. Maybe in those two years you also paid down your credit card debt significantly and reduced your credit utilization score from 50% to 25%. This shows financial maturity and makes you a very desirable loan candidate. An improvement to your credit score can translate to saving hundreds if not thousands of dollars. So what is a good credit score to refinance? A good credit score is considered to be 670 and above. As long as your score is better now than it was when you originally took out your loan, it is worth looking into.Check your credit score (it’s free to do once a year from each of the three agencies, which means you can check for free three times each year). If you have noticed an increased score, contact Auto Approve and let’s get the ball rolling on refinancing. *Pro Tip: When you get your credit report, check for any inconsistencies. Be thorough when you are reviewing, and report any issues to the credit agency. Catching any mistakes can have huge effects on your credit score!Interest Rates Are DownThe economy dictates how interest rates are calculated. Interest rates are set at the federal level by the Federal Open Market Committee (FOMC). If the economy needs a boost, the Committee will lower interest rates to encourage spending. In these unpredictable COVID times, interest rates have been lowered to encourage people to buy.Your Original Loan Had Unfavorable TermsIt’s happened to a lot of us; we go in to take a look at something and before we know it we are signing on the dotted line. Maybe you just wanted to see how that new SUV looked in person, or you were just hoping to take a quick test drive and get a feel for how that new truck drives. If this is how you got roped into your original car loan, refinancing might be an excellent idea. Dealerships have famously high interest rates and notoriously smooth salesmen. It is easy to get talked into a loan without shopping around and comparing rates. If this has happened to you, there is a good chance you are overpaying on your car loan. Vehicle refinancing can help you pay off your unfavorable loan and start over with a better, more reasonable loan. At Auto Approve we don’t have any smooth-talking salespeople (don’t tell our team we said that though). We are just really passionate about saving you money.Reason #2: You Want to Change Your Monthly PaymentsVehicle refinancing is a great way to change your monthly payments. If things have been especially tight lately, there are two ways that you can get some much needed breathing room.Refinance to a Lower Interest RateIf your credit score has improved, interest rates have gone down industry-wide, or your original loan had a high rate, there is a good chance you can refinance to a lower interest rate. This will ultimately reduce your monthly payments if you keep a similar payment schedule.Lengthen Your Payment PeriodA great way to reduce your monthly payments is to lengthen your payment period. When you refinance, you may have the option to pick 24, 26, or 48 month repayment periods. The longer your payment period is, the more spread out the total cost of the loan will be, which means your monthly payments will ultimately be less. If your interest rate isn’t much lower you may end up paying a bit more in the long run interest rates, so you will need to decide if the extra breathing room is worth the possible long term cost. Shorten Your Payment PeriodIf your financial situation has loosened up since you took out your original loan, shortening your payment period might be a good move to save some money in the long run. The shorter your payment periods are, the less time you will be paying interest on the loan. This can add up to saving big bucks when your loan is over. Your monthly payments are likely to be a bit higher, but if you are in a comfortable position it might be a good move to pay your loan off more quickly. And if you are able to secure a lower interest rate at the same time, that’s even more money in your pocket.*Pro Tip: Doing your research and running the numbers is the most important thing you can do when considering refinancing. Make a spreadsheet and use an amortization sheet to help you determine your various payments based on different payment periods. This will let you see how much you will be saving (and then decide if it’s worth it).Reason #3: You Want to Add or Remove a CosignerIf you want to add or remove a cosigner to your auto loan, you will need to refinance your car.Adding a CosignerIf you are having trouble each month making your loan payments, adding a cosigner might be beneficial to you. If they have a good credit score and payment history, they will likely qualify for a better interest rate. In order to add a cosigner, you must go through the vehicle refinancing process. When you refinance with a cosigner, lenders take the following considerations into account:Your cosigner’s credit scoreYour cosigner’s payment historyYour cosigner’s incomeYour cosigner’s backgroundYour cosigner’s consent to be financially liablePro Tip: It can be difficult to ask someone to cosign on a loan as it is a huge liability. The key to successfully cosigning is to communicate openly and honestly with your cosigner. Check in with them regularly to assure them that you are making consistent, prompt, and full payments. Give them access to any necessary documents and keep them in the loop.Removing a CosignerSimilarly, if you are no longer interested in having someone else’s name on your loan, you will need to refinance to get them removed from the loan. Make absolutely sure that you are comfortable taking on the responsibility by yourself before you remove your cosigner. Consider the following:Has your credit score improved enough to support this and give you a good interest rate?Is your cash flow good enough to support consistent, full, and on-time payments?Does your current loan have prepayment fees? Are these fees high enough to negate any benefits of refinancing?How much time left is in your current loan? If there are less than two years left on the loan, it might not be beneficial to refinance, and it might make more sense to leave the loan as is until it is paid off. On the other hand, if your loan is less than a year old it might be worthwhile to wait a bit. Waiting a year after your original lease to refinance will help your credit score to bounce back after taking out the initial loan.Those are the top three reasons that you should think about refinancing today.Have we convinced you that car refinancing might be a fantastic and worthwhile idea? Great! Wondering how to refinance a car loan? Get started with a free quote from Auto Approve today–it only takes a few minutes, so you have nothing to lose!GET A QUOTE IN 60 SECONDS

Always dreamed of owning a motorcycle, but never been able to pull together the cash to make that dream a reality? Recently bought a hog and wondering if the rate you got was reasonable? Whatever you're looking for, we're here to give you all the answers to your questions about financing and getting a good rate on your motorcycle loan! (Also, does calling it a hog make us sound cool? Please don't ruin this for us.)While buying a motorcycle can be less of an investment than buying a new car, it can still be a significant purchase. New Harley Davidsons start at $10,000, but easily climb into the $20,000 range. So if you really want to get on the open road, but don’t quite have the money, a motorcycle loan might be your answer.Here's everything you need to know about motorcycle loans and financing ratesThe Three Ways to Finance Your MotorcycleIf you don’t have the money in your bank account to buy the motorcycle you’ve been eyeing at the local dealership, there are three different options for financing:Manufacturer FinancingSome motorcycle companies, such as Harley Davidson and BMW, offer financing. And there are some pros to manufacturer financing:You can get financing on both new and used inventory.You can add necessary gear and accessories to the loan amount, such as helmets and protective gear.It's convenient – you can get your motorcycle and financing set up in one day with little hassle.Dealers sometimes run specials to encourage sales, so if you have good timing you may be able to get a nice rebate or decent APR on your new chopper.While there are some good benefits to manufacturer financing, there are also some negatives. Here are the cons to this type of financing:Dealerships have notoriously high APRs. It is important to shop around beforehand to know if you are getting a good deal or not.There are sometimes limitations on what you can finance. Not all models are eligible for financing, and oftentimes the advertised low APRs only apply to certain motorcycles.Manufacturer loans are secured. This means if you fall behind on payments, they can take your motorcycle as collateral. Personal LoanIt is possible to secure financing through a personal loan. A personal loan is an unsecured loan that you can take out through a bank, credit union, or an online lender. Here are the pros of using a personal loan to finance a motorcycle:These loans are unsecured, meaning that should you default, your motorcycle will not be taken as collateral.There are often no origination or application fees.There is often no prepayment penalty if you pay back early.Securing a personal loan can often be a bit more difficult because it is unsecured. Here are some of the cons:You need to be a member if you're financing through a credit union (credit unions often have the best rates for personal loans).You must have excellent credit to be eligible.Rates can be high, as they are unsecured.You may be required to apply in person.A personal loan may be a good option for some, but it does require a great credit score and strong credit history. Motorcycle LoanThe third option for financing a motorcycle is to get a motorcycle loan. Motorcycle loans are offered through banks, credit unions, and some online lenders. While similar to auto loans, they are not interchangeable and you may find that the lender financing your car does not offer motorcycle loans. Motorcycle loans are your best bet to find a lower rate, but this is dictated largely by your credit score and financial history. Additionally, there are often limitations on these loans (for instance, you may not be allowed to buy a used motorcycle, only a new bike). Since motorcycle loans are usually the best bet for getting a good rate, let’s explore them a bit more.Are Motorcycle Loans Different than Car Loans?With both motorcycle and car loans, you are making payments on a vehicle that will act as collateral in case you default on the loan. They both have a similar application process, and the rate for both types of loans are largely dependent on your credit score and financial history. The main difference between these types of loans are the rates and availability.Why Do Motorcycle Loans Have a Higher APR than Traditional Auto Loans?Motorcycle loans tend to have a higher APR for a number of reasons. First off, they are considered recreational vehicles, while cars are considered to be more of a necessity. Motorcycles require more repairs and the motorcycle depreciation rate is higher than a car depreciation rate. Motorcycle crash rates are also higher. All of these factors add up and make for a higher risk loan, therefore lenders charge a higher APR.What are the Requirements for a Motorcycle LoanRequirements for a motorcycle loan are similar to requirements for an auto loan. The lender will look at the following information when choosing whether or not to provide financing:Credit ScoreDo you have a good credit score? Your credit score is especially important when it comes to financing a motorcycle. Because it is a riskier loan, there is a higher threshold of financial stability. According to Equifax, the following credit tier characterize credit scores:800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor creditTo secure a motorcycle loan, you will need a good credit score (670 or above), but the best rates will be reserved for those with very good to excellent credit (740 or above).Credit HistoryHave you had other loans, such as an auto loan or a mortgage? Do you make on time payments? Do you have a history of repossession or bankruptcy? Lenders will ask all of these questions when reviewing your credit history to determine whether or not you are a high risk candidate for a motorcycle loan.Debt-to-Income RatioDo you have a high debt-to-income ratio? Mortgages, rents, auto loans, and other personal loans are all considered debts. If the ratio of your debts to your income is high, you are a less desirable candidate for a motorcycle loan. If your debt-to-income ratio is low, this means you are more likely to make full, on-time payments and are therefore a more desirable loan candidate.Down PaymentHow much of your own money are you able to put down on your motorcycle? If you are able to put down a higher payment up front, it shows the lender that you are a serious applicant and more financially stable than someone who does not have any money for a down payment. Condition of the MotorcycleIs the motorcycle new or is it used? If it is new, it is more reliable with less risk of it breaking down. That being said, new motorcycles tend to be much more expensive. The lenders will look at all of this information when determining a rate.Price and Value of the MotorcycleHow much are you paying for the motorcycle, and how much is it worth? The price you are paying compared to the value found on Kelley Blue Book will tell the lender whether or not you are getting a good deal on your motorcycle. This will also factor into the rate of your motorcycle loan.What is a Good Rate for a Motorcycle LoanRates for motorcycle loans vary greatly based on your personal situation. If you have excellent credit, a strong financial history, and can put down an up front payment, you can find rates as low as 3.5% APR. It is important to remember that what is a “good” rate for you might be different than what is considered a “good” rate for someone else. The high risk associated with motorcycles compounded with less than perfect credit can drive your APR up pretty fast. And if you're not happy with your rate, we can help. At Auto Approve, we're committed to finding you the best rate possible for your motorcycle loan. We work as your advocate to track down and compare all available rates and terms to ensure that you are getting the most bang for your buck. Can I Refinance a Motorcycle Loan?Yes! If your credit score has improved since your initial loan, interest rates have gone down, or you just got a bad rate on a manufacturer loan, you can refinance to more favorable terms. If you are wondering how to refinance a motorcycle, Auto Approve can help make it happen. What Not to DoIf you cannot get approved for a motorcycle loan, personal loan, or manufacturer financing, you should wait to purchase your new motorcycle. Avoid the temptation to buy the bike with your credit card. If your credit limit is high enough, you might think this is an easy option, but the high interest rates and penalties can have disastrous results if you fall behind. It’s best to work on building your credit and reapplying when your situation has improved.Financing a motorcycle has stricter requirements than financing a car, but at Auto Approve we can help you find the best motorcycle loan rates available. If you're interested in refinancing your motorcycle loan, contact us today to find your best rate!GET A QUOTE IN 60 SECONDS

Gap insurance (Guaranteed Asset Protection) is optional insurance that kicks in if your car is totaled or stolen. It essentially covers the “gap” between what you still owe on the car and the depreciated value of the car. Let’s look a little closer at how this type of insurance works, and when you should consider getting it.Here’s everything you need to know about gap insurance and when it is worthwhile to have.If you have a car loan, it is possible that the car may be valued at less than you owe on it. This is less than ideal, but it happens often enough with vehicle loans. This becomes a major problem if something drastic happens to your car. If your car is stolen or totaled and the insurance company only pays out what the car is valued at, it might not cover the amount that you have left on your loan. How Does Gap Insurance Work?Gap insurance kicks in when there is a gap between what insurance will pay and what you still owe on the car. Say you take out a loan for $20,000 on your new car, and a few months later your car is totaled while it is parked outside your house. You file a claim with your insurance company, and they agree to pay $17,000. The $3,000 difference is ultimately your responsibility, even though the situation was completely out of your control. Gap insurance ultimately works in conjunction with comprehensive and collision insurance to minimize or eliminate your out of pocket expenses.Do I Need Gap Insurance?Gap insurance is not technically required, but that doesn’t mean you shouldn’t consider it. Let’s look at a few different types of insurance and when they are required:Liability Insurance. This insurance is required by almost every state in the United States (excluding New Hampshire). It is composed of three parts: bodily injury coverage per person, bodily injury coverage per accident, and property damage coverage per accident. This covers any damage you may cause to another driver, their passengers, or their property, including their car.Comprehensive Insurance. This covers the cost of damages to your vehicle if there is a non-crash accident, such as weather damage or theft. Comprehensive insurance also covers damage that occurs if you hit an animal. Collision Insurance. This covers damages to your vehicle if you hit or are hit by another vehicle.If your car is financed, you may be required to get all three types of insurance. Even so, it is possible that this may not cover all of the damages, and you could still owe money on your car even if it is totaled.How Do I Decide If I Need Gap Insurance?If your car is not financed, you do not need gap insurance whatsoever. If your car is financed, it depends largely on the expected depreciation of your car. It is important to remember that cars depreciate rather quickly, losing about 20% of their value in the first year alone. It is always worth checking Edmunds or Kelley Blue Book to see what your car is worth. Here are some factors that might help you decide if gap insurance is necessary: You put less than 20% as down payment on your car. This makes you more likely to end up with negative equity as soon as you leave the dealership. Your car depreciates the minute you leave the dealership, so if you only put down a low down payment, you might immediately owe more than the car is worthYour car is a lease. Some leases require gap insurance in addition to collision, comprehensive, and liability.You drive a lot compared to the average person in your area. This will cause your particular car to depreciate faster. Your car model has a tendency to depreciate fast. Some cars simply lose value faster than other cars, while some cars hold their value extremely well. Gap coverage might be worthwhile if your car model doesn’t hold its value particularly well.Your car loan payment period is long. If your loan is 5 years or longer, there is a higher chance that your loan balance will exceed your car’s market value. Gap insurance can protect you from this depreciation.How Much Does Gap Insurance Cost?Like everything, the cost of gap insurance can vary greatly between insurance companies. If you go through your current provider, you can expect to pay a yearly flat fee of $500 to $700 for the coverage. If you finance through a credit union, you can expect a monthly add on of $20-$40. The following variables will affect the cost of gap insurance:Where you live.Your age.Previous claims history.Actual value of your car and total amount you owe.If your insurance company does not offer gap insurance, you can purchase it as a stand alone policy from another provider. At AutoApprove, we work with lenders to get the best rates on gap insurance possible, usually around $14 per month. As far as insurance coverage goes, it offers a great return of investment should you ever need it to kick in.Is Gap Insurance Really Worth It?You will need to do the math to determine if gap insurance is worth the investment.  First, go online to determine how much your car is worth. Use sites such as Kelley Blue Book and Edmunds to get a value for your make and model. It is best to find an end of year value for each year of your loan.Take a look at your loan terms. See how much you will owe each year, and compare this to what your car will be worth at the end of each corresponding year.Calculate how much gap insurance will cost for each year.Look at the difference in your car’s value and what you owe at the end of each year. Based on this, determine how much gap insurance will save you in the event of a disaster. If there’s a good chance your car will depreciate faster than you will pay it off, you should strongly consider gap insurance. Gap insurance ultimately covers what collision and comprehensive insurance do not cover, and can protect you from depreciation.At AutoApprove, we know that gap insurance can make good sense based on how quickly cars tend to lose their value. We work closely with lenders and help you shop around for the rates and coverage that fit your needs most. So if gap insurance makes sense to you, contact us today to see how we can help.GET A QUOTE IN 60 SECONDS

Leasing a car is a very popular option for many these days. But what happens when you love your car, and you just can’t bear to say goodbye?When your car lease comes to an end, you typically have three options to choose from: lease trade in, lease turn in, and lease buyout. Here, we'll discuss your three options and help you decide if a car lease buyout is the right move for you.What is a car lease buyout and does it make sense for you?In short, a car lease buyout lets you buy your existing car from your lender.When your lease term comes to an end, you have three main options to consider. About three months before your lease end date, your lender should contact you to review your courses of action.Understanding Your OptionsLease Trade InA lease trade in is when you trade your old car in for a new car lease. In this case, you should determine your car’s value and compare it with the lease-end residual value that is listed in your lease contract. If the trade in value is higher (which is rare), you can use the difference to put a down payment on a new vehicle.In most cases, the residual value will be higher and it will make more sense to return the car and start a new lease.Lease Turn InA lease turn in is exactly that; you return your car to the dealer as is. You will have to look at your contract carefully and determine if you are responsible for any fees. An inspection will be performed when you trade in your car and you will be responsible for excessive wear and tear, any dents and dings on the exterior of the car, and any stains or tears on the car’s interior. Excessive mileage fees may also apply, which can add up fast.Lease BuyoutA lease buyout lets you buy your car directly from your lender. If the first two options are less than ideal, a lease buyout might be the right option for you. In most cases, you can buy your car lease at any point during your lease period. If you want to buy out your loan early, you will need to discuss this with your lender as it will affect the residual value of the car. It is often not financially beneficial to buy a lease out early. It is much more common to wait until the end of the lease period to broach the subject of a lease buyout.  How a Buyout WorksA car lease buyout is different than buying a new car. You already have knowledge of your car’s condition so you should have fewer concerns over the investment. The buyout loan amount will also be significantly less than buying a new car. Let’s look at what you should consider when deciding if a lease buyout is right for you.Valuing Your CarFirst and foremost, you should determine the value of your car. There are two main factors that you should consider:Residual Value. Your car’s residual value is listed in your existing loan contract. The residual value of a car is based on your car’s expected depreciation over the life of your loan and is predetermined by the leasing company. This number is usually non-negotiable.Market Value. The demand for your car will greatly affect the market value of your car. If it is a popular make and model, it will have a higher market value. Use websites such as Cars.com, Edmunds.com. Or Kelly Blue Book to determine the market value of your car.When you are buying out your lease, you are bound to the residual value of the car. It is important to know what the market value is of your car to determine if it makes sense to purchase it. If the residual value of your car is $16,000, but the market value is $13,000, it would mean that you are paying $3,000 more than what your car is actually worth. There is no rule on when exactly it is worthwhile to purchase your car, but if the residual value is within a few hundred dollars of the market value, it is probably a fair deal.Additional Buyout ConsiderationsIf you are happy with the residual value of your car, there are a few more factors to take into consideration.Excessive mileage. Have you exceeded the mileage amount allotted in your lease agreement? If so, you will be subject to per-mile penalty fees that can vary from $.10 to $.30 per mile. If you were consistently driving several thousand miles per year over your limit, that can add up to several thousand dollars. If you choose to buy your vehicle, you will not have to pay these fees, so this money can instead be put towards your buyout. Your car’s condition. Your car is subject to inspection when your lease period is up. You will be charged a fee if there is excessive damage, such as exterior dents and dings, interior tears and stains, or mechanical issues that the dealership considers beyond normal wear and tear. Disposition Fee. The disposition fee covers all costs associated with reselling your car, and can be a few hundred dollars. This pays for the dealership to clean and detail the car, and make any necessary repairs before reselling.Cost of maintenance. If you want to keep your car, it is important to do additional research to determine what your cost of maintenance will be in the next several years. If there are several expensive maintenance costs that will pop up, you will need to compare this cost with the savings from the other fees.How to Buyout Your LeaseYou’ve run the numbers and you think that buying out your lease makes the most sense and is your best option. What next?Call your existing leasing company. Get a comprehensive list of all costs associated with the buyout. Make sure this number includes sales tax, which can be a significant amount.Shop around for rates. Go online and look around at different rates. Not all lenders offer buyout loans, so you will have less options than when you originally financed your loan. It is also important to note that lease buyout loans are used car loans, which tend to have higher interest rates than new car loans. At Auto Approve, we work with lenders that do offer lease buyout loans, and can help you get the best rate available.Your rates will be based on prevailing interest rates in the industry as well as on your personal finances, just as your initial loan. Make sure you have all necessary documents for your loan application: Photo IDYour Vehicle’s InformationProof of Income and Financial HistoryProof of ResidenceProof of InsuranceHaving all necessary documents ready to go will help to streamline this process. Be sure to apply to all lenders within a fourteen day period. The credit bureaus allow all credit inquiries in a fourteen day period to count as one credit hit, so it will not adversely affect your credit score more than necessary.When the lenders respond with their offers, compare the rates and terms. At AutoApprove, we can help you shop around to compare rates and terms to find the best option for your buyout loan. Call Your Insurance CompanyYou will need to notify your insurance company of your new lender. This is also a good chance for you to review your insurance needs. On a leased vehicle, you are typically required to have high levels of liability coverage. You may decide that you do not need such a high level of coverage based on where you live or how much you drive, and you can opt for lower payments by reducing this coverage. Make Sure All of Your Paperwork Is In OrderTalk to your lender and be sure to visit your state’s motor vehicle department to transfer the title and make sure all of your paperwork is in order. Your lender should be able to guide you specifically through what steps you need to take. And when you work with Auto Approve, we handle the DMV paperwork for you!Ready to buy out your lease? Auto Approve can helpIf you have considered all of your end of lease options and determined a lease buyout is the right option for you, we're here to help you with the next steps so you can keep your car, hassle-free.At Auto Approve, we never mark up rates on car buyout loans or vehicle refinancing, so you know you're always getting your best possible rate. We pass all of the savings right on to you. We know car financing can be complicated and stressful, but we're here to streamline the process and save you as much money as possible.Check out our auto lease purchase options and get started today!GET A QUOTE IN 60 SECONDS

So, you have a car, you love it, but the interest rate... isn't so hot. You're probably wondering whether refinancing could help and, if so, when you can refinance.First, let's talk about vehicle refinancing.When you refinance a car, you are paying off your existing loan with a new loan that ideally has better terms. Just as you are able to obtain a vehicle loan whenever you would like, you are also able to refinance a vehicle loan whenever you would like. But there are many factors to consider when trying to determine the best time to refinance a car and whether or not it makes sense for you right now.Let's take a look.When can you refinance a car, and when is the best time to refinance?There are many factors to consider when it comes to refinancing. Here are some things to think about when determining if refinancing is a good idea for you right now.Your Existing LoanFirst and foremost, it's important to look at the terms of your existing auto loan.Sometimes, lenders will have prepayment penalties attached to the loan, so it is important to know what the penalties will be if you choose to refinance. If there are prepayment penalties, be sure to do the math to determine if the savings of refinancing will outweigh the downside.When determining the best time to refinance a car, it depends heavily on how long you have had your original loan and how many payments are remaining. Let's take a closer look at that.It’s the beginning of your auto loanWhile you can technically refinance immediately after you get your initial loan, it is generally better to wait a bit before refinancing your car.60-90 Days: This is the amount of time it typically takes for the title on your car to transfer. You need to wait until all the paperwork is finalized to refinance, so it's actually unlikely you'd even be able to refinance in this first period of time.Up to six months: It takes some time for your credit score to bounce back after the hard inquiry from your first loan. If you have fantastic credit, this might not be an issue. But, typically, waiting at least six months will yield more beneficial refinancing options. If you are a first time car loan borrower, it is recommended that you wait a year before refinancing your car. This will prove an on-time payment history and make you a more desirable candidate and qualify you for better loan terms and rates.It’s towards the end of your auto loanTo talk about why this matters, we need to get into the nitty-gritty of loans for a moment.First, how does interest on a loan work? Through amortization, the amount of interest you pay gradually decreases over the life of the loan. This means in the beginning of the loan, you are paying off more interest than towards the end of the loan. Let’s look at how car loans are constructed and how car payment amortization works.Car loans accrue simple interest. This means that if you take out a car loan for $20,000 at 5% interest with a 48 month payment, you will pay back $2,108.12 in interest, with monthly payments of $460.59 for the next four years. However, car loans are amortized and “front-loaded”, meaning that, in the beginning, your payments aren’t split evenly between your interest and your principal. The amortization schedule below shows how your monthly payments are split up for the first six months of your loan.Let's look, for example, at a $20,000 loan at 5% interest over 48 months.Month: 1Principal Amount: $20,000.00Monthly Interest Payment: $83.33Monthly Principal Payment: $377.25Ending Balance: $19,622.75Month: 2Principal Amount: $19,622.75Monthly Interest Payment: $81.76Monthly Principal Payment: $378.82Ending Balance: $19,243.92Month: 3Principal Amount: $19,243.92Monthly Interest Payment: $80.18Monthly Principal Payment: $380.40Ending Balance: $18,863.52Month: 4Principal Amount: $18,863.52Monthly Interest Payment: $78.60Monthly Principal Payment: $381.99Ending Balance: $18,481.53Month: 5Principal Amount: $18,481.53Monthly Interest Payment: $77.01Monthly Principal Payment: $383.58Ending Balance: $18,097.95Month: 6Principal Amount: $18,097.95Monthly Interest Payment: $75.41Monthly Principal Payment: $385.18Ending Balance: $17,712.78As you can see, in the earlier months you are paying more in interest than you are later on. Based on this amortization, you can see the total yearly amount paid in interest.Interest Paid:Year 1 - $894.80Year 2 - $657.79Year 3 - $408.68Year 4 - $146.83The majority of your interest is paid in the first two to three years that you have your loan. That means that the longer you wait to refinance, the less beneficial it will be to do so. This is because one of the major benefits of refinancing is less paid in interest over time, but if your interest is mostly paid off, you won't get to see that benefit.Current Interest RatesWhen deciding whether now is a good time to refinance a car loan, look at the current interest rates being offered. Are they better than your original interest rate? Depending on the size of your loan, even a .5 % difference can make a huge difference in the total amount you will be paying.Your Current Credit ScoreCheck your credit score using one (or all of the) of the three major bureaus: Equifax, Experian, and TransUnion. Is your credit score better than it was when you initially applied for a car loan? If so, now might be a good time to refinance.On word to the wise: Refinancing will result in another hard inquiry on your credit report, which will negatively affect your score for about a year. It may also lower the average age of your accounts, which can negatively affect your credit score. So, if you need a high credit score for another reason, like applying for a new mortgage or taking out a new lease on an apartment, consider this in your decision to refinance your car. However, there's no hard inquiry involved in getting a quote, so if you're not sure whether the savings will be enough to make a difference, you can always get a quick and easy quote to help make your decision.Your Current Financial SituationIf you need a little more breathing room every month in your budget, now might be a good time to refinance. By reducing your interest rate or lengthening the payment period, you can reduce your monthly payments. And, for those who need a break from their car loan, refinancing can also give you a few months off from payments.On the flip side, if you would like to pay off your loan earlier, refinancing to a lower rate and shortening your payment period will save you money in the long run. Depending on your current loan, you may even be able to pay less monthly and less in interest over time!When It Doesn’t Make Sense to RefinanceThere are times when refinancing will not be beneficial to you. If any of the following apply to you, it might not be the best time to refinance your car:Your credit score has decreased. You will most likely not find a lender to give you a better rate, unless your current loan is at a really bad rate.Your vehicle has a lot of miles on it. Most lenders have a minimum loan amount and if the car has depreciated in value significantly, it may not be worth your while.Your loan is “upside-down”. If you owe more on your vehicle than it’s worth, you may struggle find a lender that will be willing to refinance at a good rate.All that said, if you're on the fence, it can't hurt to try — getting a quote doesn't require a credit check and can give you an idea of whether or not you should refinance in just a few clicks.And that's everything you need to know about when you can refinanceWhile there are few limitations on when you can refinance, you can use this tips to time your refinance correctly to get the best possible deal. In order to find the best time to refinance your car, take a look at your current loan’s terms and payment period as well as your personal finances.Depending where you are in your repayment schedule, refinancing could save you a bundle. At Auto Approve, we help you find the best refinancing options for your situation. If you’re interested in refinancing, use our quote tool and we can help you find you your best possible savings to put more money back in your pocket.GET A QUOTE IN 60 SECONDS

Let’s talk about vehicle service contracts – what they are and why you could end up wanting one.See, as part of purchasing a new car, typically, repairs and mechanical issues are covered by the manufacturer’s warranty – for a few years. This coverage provides consumers with peace of mind when first purchasing the vehicle, but a few years down the line, it will fall on them to pay for these repairs that are no longer included in the contract. Since most cars last 5, 10, or even 15 years on the road (depending on the make and model), you can be stuck paying out of pocket to keep your car running smoothly for many years. After all, we all know that cars come with their fair share of mechanical problems over time. That’s why investing in a program or agreement that can provide you with mechanical coverage throughout the lifetime of your vehicle is worth considering. A vehicle service contract acts as a form of insurance policy as your car ages, providing you with the coverage you need while acting as an intermediary on your behalf.Here's all your questions answered about Vehicle Service Contracts.How Does a Vehicle Service Contract Work?Like an insurance policy, you pay upfront into your service contract. If your car ever needs any repairs covered, the provider will foot the bill on your behalf. This way, you don’t have to worry about any sudden repairs totaling thousands of dollars that can completely destroy your savings.In this article, we will give you an overview of vehicle service contracts, how to use them, and all other pertinent details related to providers, so you can make the best decision in the end. We have reviewed top extended car warranty providers and ranked them on things like customer service, coverage options, etc. below. What is a Vehicle Service Contract?As mentioned, a vehicle service contract is a paid plan that covers costly repairs after the warranty on your vehicle has transpired. Also called an extended car warranty, the service contact is available to both new or used cars. Note: as the car ages, the likelihood of frequent repairs increases, which means the contract will be quoted at a higher rate than one for a younger car.Is there a difference between a vehicle service contract and an extended warranty?The short answer is: yes. Vehicle service contracts do not extend a manufacturer’s warranty – only the manufacturer can agree to that. The contract mimics the factory warranty coverage as a third party, providing additional coverage that is not provided via the manufacturer. Also note: not all vehicle contracts are made equal, so be sure to check out the extended car warranty available to you as well and compare the two.What Are the Two Types of Vehicle Service Contracts?You have a regular and exclusionary contract option. The regular contract will list all of the things that are covered in the agreement. The exclusionary will list everything that is not. If possible, opt for the regular contract that does not use backward logic – it can be easier to identify what you are buying with the agreement.What Are Vehicles Service Contract Price Ranges?There is no one-size-fits-all when it comes to vehicle service contracts and pricing. The cost of the contract will depend on your vehicle’s make and model, as well as the condition of the car. It will also depend on what level of coverage you agree to, and if you want the provider to cover 99% of breakdowns and repairs. Just like an insurance policy, if your car is older and riskier to the lender, they are going to require that you pay more for the contract.In general, these contracts can range from $199 to $1,000. Most vehicle contracts will fall into the $350 to $750 per year range. You will want to compare how much typical repairs for your vehicle will cost, when compared to this coverage. If you figure that you will owe around $1,000 this year in repairs, then taking on a $500 contract may make sense.How Do I Use My Vehicle Service Contract?You can access the contract anytime your vehicle needs a repair. Like any insurance company, all vehicle service contract providers will include different tiers of coverage. Not every tier is going to cover every possible repair, which again, is why you will want to review all details before agreeing and signing. Each provider will also have their own process as to how claims are filed, and ultimately, covered. Some providers will require that you pay for the repair and then they reimburse you. Other providers will partner with repair facilities and not require this kind of capital be fronted in order to engage with the repair. It depends on your cash flow and what you know is possible for your finances.Vehicle Service Contract Exclusions to NoteWhen you purchase this contract, you will want to review it carefully. Most contracts will list all of the parts that are covered, however, should you find yourself with an exclusionary contract, you will want to review what is instead, not covered. Even if it appears that the repairs that you do want to be covered are not on the exclusionary list, you will want to clarify with the company exactly what their contract means.Should I Purchase a Vehicle Service Contract?These contracts can make a lot of sense for used vehicles, which can come with complications down the line that you were not originally aware of. If you purchase the vehicle from a reputable brand, it is recommended to first inquire into the extended warranty package and how it compares to a rate from a vehicle service contract. And that’s everything you need to know about Vehicle Service Contracts.For many people, knowing there is a ceiling on how much they are going to pay for their vehicle’s repairs is all they need. Here are Auto Approve, we are proud to provide you with the real, genuine information you need to make smart decisions for your vehicle. We hope you have found this article to be helpful and informational.

Are refinance rates different from the rates on new car loans other people are getting? It's a worthy question.Everywhere you turn, it seems like people are talking about interest rates. Terms like “historically low” and “all time low” are being tossed around like confetti, and you definitely don’t want to miss out on whatever party is happening (especially if that party is about saving you some cash, right?). But wait – you already have an auto loan, so how can you benefit from all of this? The answer, of course, is refinancing.Let’s take a look at the benefits of vehicle refinancing.When you refinance a car, you start over with a new loan, and your interest rate can change drastically.Is the process of refinancing the same as the process of applying for a new auto loan?Refinancing is simply paying off your existing loan with a new loan. You are essentially just replacing one financing option with another. The new loan will ideally have a better rate or some other favorable features that make it more desirable than the original loan. You will still have to apply for the new loan, you will still be bound to a loan payment schedule, and you will still offer your vehicle as collateral.The Application Process is the SameWhen refinancing your car, you will need to do research and apply to different lenders, just as before. You will have to provide the same documentation as you did the first time. These documents usually include the following:Photo ID. This can be a passport, driver’s license, or other government issued photo identification.Your vehicle’s information. This often includes the bill of sale, VIN number, the make, model, and year of your car.Proof of income and financial history. Lenders want to see that you are actively earning income. The lender will specify what documents they wish to see, but this often includes pay stubs, banking information, credit history, and other financial account information. This will verify that you are a strong candidate for a new loan and that you will be reliable with your repayment.Proof of residence. Lenders need to verify where you actually live. This can be a mortgage statement, lease agreement, or utility bill. PO boxes are not acceptable as proof of residence.Proof of insurance. Lenders will want to know that there is state-required insurance on the vehicle.Think of these papers as your resume or online dating profile. You want to look as desirable as possible to the lenders you are pursuing. The more desirable you are, the more worthwhile refinancing will be.Just like with your original application, you want to compare the different offers and see who offers the best terms overall. At Auto Approve, we'll help you compare all of your offers to ensure that you are getting the best deal possible.The Loan Terms May DifferAfter refinancing, you will still have an auto loan that you will need to make regular, scheduled payments on. Your payment schedule may change, however. Your schedule may be shorter, so that you can pay off your car faster. Your schedule may lengthen, making your monthly payments lower. Or, your payment schedule may stay the same. And your vehicle will ultimately serve as collateral for your loan, as it did with your original loan.The main benefit of vehicle refinancing? The interest rate.If you are simply changing from one loan to another, why bother refinancing a car? Why bother with that whole lengthy application process, the approval, and the possibility of rejection? The biggest, most important reason of course – money. You can save a boatload of money by changing your interest rate. The lower your interest rate, the less you pay in interest (duh) and the more money in your pocket at the end of each month.There are many reasons your interest rate can change when you choose to refinance your vehicle. These reasons have to do with your personal credit, income, and job status, as well as the economy in general.Increasing your credit score can result in a lower interest rateYour credit score is the single biggest factor in your refinance rate. If your credit score has increased since your original loan, you may be eligible for a lower rate. The following factors can help contribute to a higher credit score:History of on time paymentsLow balances on credit cardsOlder credit accounts that are in good standingHaving a good mix of credit card and loan accountsA small amount of new credit inquiresIf you have a history of late payments or carry high credit balances, these can negatively affect your credit score. If you have made a lot of new credit inquiries recently, this can also lower your credit score, so you will be better off waiting a year or so to apply for car refinancing.It is generally recommended that you pull your credit report ahead of time and review it for any inconsistencies. It is free to pull your credit report from the three major agencies once per year without it negatively affecting your credit score. These agencies are Equifax, Experian, and TransUnion. If you come across anything that is incorrect, you can dispute it with the credit bureau and petition to have it removed from your report. An increase to your income or change in job can result in a lower interest rateIf your income has increased since your original loan, lenders may view you as being more financially stable and therefore offer you a lower interest rate. But the number on your paycheck isn’t the only factor that matters. Having a stable, salaried position may secure you a better rate than being self-employed or working as a freelance employee. These will all help you become more attractive for a vehicle refinance. A decrease in your debts can result in a lower interest rateIf you have less debt than you did when you originally got your loan, lenders may view you as being more financially stable. Decreasing the amount of money you owe in general can lead to lower interest rates.The current economy is offering lower interest ratesRefinance rates depend in part on how healthy the economy is in general. Big banks adjust their target interest rates to respond to the economic climate. If the economy is strong, they tend to increase interest rates. If the economy is a bit sluggish, they lower interest rates to encourage spending. After the tumultuous 2020-2021 economic season, interest rates are currently at historic lows. However, many economists think that as the months go on, the interest rates may start to steadily increase. So, if you are wondering, “When is a good time to refinance a car loan?”, the answer might be right now.And that's everything you need to know about refinance vs. new car ratesAs you can see, there are many complicated factors that make up the interest rates for refinancing. It can feel overwhelming when there are so many different lenders to consider, all of which have different rates and terms to offer. That’s why, at Auto Approve, we work as your advocates, approaching different lenders to help you find the best rate and best terms available. When you refinance with Auto Approve, you can put more money back in your pocket for the things that matter, and we make the process quick and hassle-free – and never mark up your rate.GET A QUOTE IN 60 SECONDS

It can be easy to get caught up in the car leasing gimmicks that are floating around all media and advertising spaces today. Many of these ads will claim that a lease is only $58 per week or $139 bi-weekly. These companies will state that it is easier to get into a new vehicle through a lease than it is by outright buying the vehicle.It may sound wise in nature, yet this is not always the case, and we want to talk about it in this article. In reality, leases are often much more expensive than they advertise and end up costing more than just financing the car in the end. How does this happen? Through the fine print, hidden fees, and extra costs that come with breaking leases or engaging in something that is not included in the confusing contract you sign when you agree to a lease.In order to protect yourself from unknown fees before you sign that dotted line, we’re going to look at some of the hidden penalties you should review in a car lease.Fees at the End of a Car LeaseHidden Interest and Taxes: Interest and taxes are surely applied to your car lease, even if it’s something they leave out of that ‘$58 per week’ marketing ad. When these two elements are factored into the equation, it’s more like $80 per week, and that’s just with the terms provided when financing a car. This can vary based on state, county, and dealership, which is why you should always factor in a lofty sum of money to cover interest rates and taxes.Can I negotiate these lease charges? Although you may be able to negotiate other elements of the lease, you will most likely be unable to negotiate the interest rate, much less the taxes. Be sure to check if there are any tax breaks available in your state for a car lease (note: they are usually not enough to compensate for the high-interest rates that are charged by dealerships today).Administrative Fees (Twice): Dealerships will apply two different administrative fees to your lease as a part of doing business with them. The first fee will come when you initially lease the car. The second fee will come when you return the car after the lease is completed. These fees can be as much as $750 each time, justified as a way to compensate the administrative staff that will have to process the paperwork for the termination of the lease.In most cases, the average consumer is not surprised to see that fee the first time they take the car off of the lot. But, when they see the fee again after they return the car, they are shocked to learn that an extra $1,500 in total was omitted from that monthly payment number when they first inquired about the car lease.Termination Fees: Yes, you will be penalized if you decide to terminate a car lease before the agreed-upon date. You are probably thinking to yourself: but why? Isn’t the dealership receiving the car back in a better condition than if I had kept driving it? Whether you are moving, downsizing, or lost your job, any of these reasons will make it necessary for you to terminate the car lease. And, you have that right to do so, but you will be hit with a termination fee. The fee amount will vary based on the information in the lease you signed. Many people will find they end up paying the full amount of the lease via the termination fee, even if they turn the car in a year early. Be sure to ask the lessee to disclose what this fee is to you if you predict yourself needing to terminate the lease prematurely.Mileage Variations: A general car lease will enable people to drive 12,000 to 15,000 miles per year, give or take. If you go over this mileage count, you will have to pay for it – at 10 to 20 cents per mile. If you do the math, that means you would owe $1,800 on an extra 3,000 miles you drove over the preset amount. Extra mileage is one of the biggest ways a dealership makes a profit off of this lease – they can almost count on you breaking the agreement. If you predict yourself needing to drive a fair amount in the coming years, this is a major reason why a car lease may not make sense for you.Mileage Punishment – Auction Fees: Not only are you going to be slammed with fees per mile that you go over the agreement, but the dealer also reserves the right to tell you that you have to sell the car returned at auction. This means you are responsible to cover the difference between what the car sells for at the auction, and the initial value of the car that was configured based on the pre-defined mileage count. So, let’s say the dealer figured the car would be worth $13,000 after you returned it within the mileage count. If you go over that mileage count and the dealer determines the car is now worth $10,000 at auction, you are required to cover the $3,000 difference that they ‘lost’ as a result of your negligence. As you can see, this gives the dealer way too much wiggle room when it comes to the interpretation of the car’s worth. This is something you will want to hash out with the dealer before signing any paperwork. The Down Payment Omission: And finally, back to that $58 example above: this is a payment amount that is described after the down payment has already been put down on the lease. If you put a $5,000 down payment on the lease, your bi-weekly payment may only be $100 or $200 because you already paid handsomely to drive the vehicle. The moral of the story: that ad-based monetary amount is false.Need help refinancing your vehicle? We recommend you talk with our team first before signing any leasing paperwork. Auto Approve is here to help.GET A QUOTE IN 60 SECONDS

It started with toilet paper and aluminum cans, then bicycles and lumber. The world has gone through wild cycles of demand and supply over the last year, but not many people could have predicted this economic brain-teaser: car prices are through the (metaphorical) roof, with no indication of slowing down. For decades, conventional wisdom has held up for individuals who are purchasing a car. If you get a brand new car, you’re told that its value depreciates as soon as you leave the parking lot. A used car’s value only went down with time and kilometers. Conversely, if you were in the market for a used car, you could count on paying a fair price given the age and usage of the vehicle. In 2021 however, used car prices saw their biggest price increase in 68 years. Here’s what that looks like, according to Business Insider: An inflation by any other name...When the May consumer price report was published earlier this year, there was one glaring anomaly that, given the circumstances, was very alarming. The US was finally showing signs of coming out of the pandemic-induced recession, and business trends were looking up. However, the data showed inflation rising at the fastest pace since the 1990s. Some people (and economists) are using this data as signs that a long inflationary period is on the horizon. Could the government policies and market trends during the pandemic actually lead to a multi-year, super-inflationary period?Turns out that the trend was driven in large part by the uptick in just a few categories. According to Vox.com, about half of the increase in prices could be attributed to just four categories: used cars, rental cars, hotels, and plane tickets. Notice a pattern?Source: Vox.comDemand for cars and travel: Fast and furiousIn a normal year, used car prices typically rise about 1% annually. In 2021 so far, used car prices are up nearly 30 percent. Two factors are behind this unprecedented rise: supply chain disruptions in the new car market due to a global shortage of semiconductor computer chips, and the available inventory of cars.The semiconductor chip shortage: This has been a weird year for semiconductor microchip manufacturers (and everybody else). Car manufacturers cancelled orders for new chips early on in the pandemic because of low forecasted demand, but the opposite scenario turned out to be true. Earlier in the year, there was a major shortage of microchips, especially for North American car companies like Ford and General Motors. Fewer new cars were manufactured or brought over to the US. Available car inventory is low: With almost no US company able to manufacture new cars, used vehicles became harder and harder to come by. This led to a continent-wide inventory shortage. There just aren’t enough cars as there are potential car buyers. Dialing it in: how do these macro-trends impact you and your financial goals?At first glance, it may seem like buying a car is not a financially feasible decision anymore, at least in the near future.However, the rise in car prices have led to an unanticipated bonus for potential car buyers: auto loan refinancing approvals have increased 66% since May 2020, for the most part due to the rise in vehicle values and their positive impact on loan-to-value ratios (more on LTV later).It’s a win-win. Sellers get the immediate payoff from the current prices, especially if they’ve been wanting to sell or trade-in their wheels for a while. Buyers are getting approved for auto refinance requests more than ever before. As vehicle values go up, the Loan-to-Value ratio adjusts downward automatically. Since a lower LTV makes it easier (and cheaper!) for borrowers to refinance, this is a great opportunity for buyers in the market.Loan-to-Value (LTV): what it means and why it mattersLTV, or Loan-to-Value, is an important ratio to know when you’re financing a large purchase like a car or a house. It is a measure of risk, showing lenders (and buyers) to what degree a loan is backed up by a tangible, real asset. LTV is calculated by dividing the loan amount by the fair value of the asset. Say the car that you’re purchasing is $20,000 and you get a loan for $15,000, your LTV ratio is 75%. That means that 25% of the appraised value of the asset is not covered by the loan. The Loan-to-Value ratio is an important consideration when lenders are figuring out who they can loan out to (and at what rate). LTV ratios trending lower are great news for borrowers who may not have been able to get approved for auto loan refinancing in the past. Similarly, borrowers who already qualified for a refinance will get better loan terms if they apply now. Advantages of refinancing your auto-loanAccording to Experian, the average loan amount for a new vehicle is $33,739, and a used one usually runs up to about $20,723. Since a car is a major purchase for most people, going for refinancing while approval rates are so high can help you lower your interest rate, reduce your monthly payment, and improve your cash flow. Essentially, refinancing a car loan involves borrowing money from a new lender to pay off the current car loan lender in order to get more favorable rate terms on your new loan. Here are more details on how you can benefit from refinancing your car loan:1. You’ll end up paying less interestMost borrowers will end up paying less interest over the term of their loan if they refinance. Here is a calculator you can use to find out how much money you’d be saving through a refinance. The final amount depends on the remaining life of your loan and your new rate, but usually taking a few hours to refinance your auto loan can add up to hundreds (if not thousands) of dollars over years. 2. You can improve your cash flowIf you purchased your car a few years ago, you would not have had access to today’s historically low rates. Or maybe you financed your car through the car dealership, which generally doesn’t have the lowest rates in the market. Finally, if your credit score or income was lower than what it is right now, you can almost guarantee a lower rate through a refinance. While there are fees associated with refinancing an auto loan, borrowers almost always save more than they spend. Generally, if you refinance early on in the life of the loan, you’ll save more money. Personal finance website Credit Karma found that the average savings for members who refinance loans through its service is $3,000, or about $55 per month.3. Your LTV value will most likely improveRefinancing your auto loan may lead to a lower LTV ratio. Your car gets a brand new appraisal during a time when car valuations are much higher than previous years, so the ‘value’ part of the Loan-to-Value ratio goes up. A lower LTV in turn can allow you to make smaller monthly payments, if that is what fits into your budget right now. It also means you have more equity in your asset (your car), and you can use that higher valuation to support other financial moves (like using it as collateral for a business loan, etc).Why now is the perfect time to refinanceThe pandemic caused an unprecedented reduction in the supply of both used and new cars. And pretty much immediately, prices went up. This market bubble, combined with the historically low rates that the government has introduced, presents an opportunity for car buyers to refinance their car purchase. With a 66% increase in auto refinance approvals since last year, borrowers should take advantage of market trends while they can. There is a strong case for consumers to secure a refinance during a period of historically low interest rates and high car values. If you’ve been thinking about refinancing your auto loan, now is the time to apply. Unlike refinancing a mortgage, refinancing a car loan is extremely easy. It can almost entirely be done online and within a couple hours in most cases. Prospective buyers who did not get approved for auto loan refinancing even a few months ago might be hesitant to try again, but remember that the lower LTV ratios right now mean that your application is more likely to get approved without you having to take any additional steps. Consumers with strong applications (great credit, stable income, low debt, for example) may get even better loan terms. Rates are as low as 2.25% right now, making the cost of borrowing almost negligible. Simply put, borrowers benefit when rates are low. If you’ve been looking for a way to cut down on your monthly expenses, this is one expense that can make a huge difference.Although car values are expected to remain high for another few months, the truth is that a trend like this quickly gets corrected through policies and market forces. Consumers and borrowers who have been on the fence should take advantage of this market sooner rather than later and refinance their auto loans while conditions are still so favorable. GET A QUOTE IN 60 SECONDS