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Car Refinance Dictionary: The Terms You Should Know

01/26/2023 15:42
Refinancing can feel overwhelming for many reasons. And a major part of that overwhelming feeling is that it sounds overwhelming. If you don’t know the lingo, that is. But let’s break down all of these terms and demystify the refinancing process.Here are all of the car loan refinance terms you should know before you start the refinance process.AmortizationHow your loan payments are scheduled and divided up to pay the interest and the principal. An amortization table can show you how your payments will be allocated throughout your repayment period.APRThis stands for Annual Percentage Rate. This figure, expressed as a percentage, is your interest rate plus any additional fees you are responsible for. It is important to consider the APR as it gives a much more accurate idea of how much you will be spending on your car loan.Co-borrowerA co-borrower is a person who will share joint responsibility of the loan with you. This is different from a cosigner.CollateralThis is the asset that secures the loan. If you were to stop making your car payments and default on the loan, the bank would be able to take your car as payment.CosignerA co-signer is a person who agrees to back the loan if you default on it, but they do not share joint responsibility of the loan as a co-borrower does.Credit ReportYour personal financial history. It tracks what accounts you have open, your payment history with each account, and the balance you have on each account. These reports are created by the three major credit bureaus: TransUnion, Equifax,and Experian. You should routinely check your credit report to ensure there are no errors. Lenders will request a copy of your credit report to determine if you are a good candidate for a loan.Credit ScoreA three digit number that is calculated based on your financial history to indicate your creditworthiness. The numbers range from 300 to 850, and the higher your score is the more creditworthy you are considered. Your credit score is one of the biggest determiners of the car loan interest rate you are offered (the biggest factor that you can control at least).Current BalanceThe amount that you currently owe as listed on your monthly statement.DepreciationThe loss of value that occurs as your car ages and wears. Down PaymentThe amount of cash you pay up front for your car. This amount is not financed. You should aim to put down at least 20% of the car’s total cost. This will help you to stay ahead of the depreciation that occurs.Finance RateAnother term for the APR of your car loan.FICO Credit ScoreThere are different programs that will calculate a credit score, but FICO is the most popular of the providers.GAP InsuranceStands for Guaranteed Asset Protection. This is optional coverage that will cover the difference between your vehicle’s value (which is what insurance will pay) and the amount that you owe on your car in the event of an accident. Let’s say your car is totalled and your insurance pays you the value of your car, which is $15,000. But you still owe $17,000 on your loan. GAP insurance will cover this difference so you are not paying out of pocket.Hard InquiryA formal request of your credit history from a lender. When a lender considers approving a loan for you, they will request a copy of your credit report to review. This request will actually show up on your credit report and will cause a temporary ding on your credit score. Hard inquiries cannot be made without your permission.Interest RateThis is the cost of borrowing money. Expressed as a percentage, the interest rate you are offered will be based on the market rates, your credit score and financial history, your income, and other factors.Kelley Blue Book ValueKelley Blue Book is viewed as a reputable and reliable place to check your car’s value. When you are trying to determine the market value of your car, Kelly Blue Book is a great place to do so. The value will be based not only on the make, model, and year of your car, but also on the mileage and condition of the car. It’s a good idea to keep an eye on the value of your car throughout the loan period to ensure that depreciation is not outpacing your loan payments (see “Underwater” and “Upside Down”).LienThe legal right to your car. The lender has a lien on your car, so if you do not pay your debt to them the car will belong to them.Loan ModificationIf you refinance your loan with the same lender, they may report it to credit bureaus as a loan modification rather than a new loan. This will not affect your credit score as a new loan would.Loan TermAlso known as a repayment period, this is the amount of time you have to pay back your car loan. Non-Sufficient Funds Fee (NSF)If one of your payments does not clear or there are not enough funds in your account to cover the check, you may be charged an NSF fee. The amount will be listed in your contract.Original Loan AmountThis is the amount of money you originally took out to pay for your car. It is typically the cost of the car plus taxes and fees minus the down payment you made.Payoff AmountThe amount you will need to pay to get rid of your loan entirely. It is separate from your current balance, which may not reflect the interest and fees that you will be responsible for to pay off your loan entirely.Prepayment PenaltyA fee for paying off your car loan early. These penalties may be listed in your original car loan contract. These penalties are designed to offset the losses in profit that occur when you pay off your loan early. Prepayment penalties will at times offset any savings that refinancing can provide, so it’s important to know what these penalties are before you commit to refinancing your car loan.PrincipalThis is the same as your original loan amount. It is the amount of money you originally borrowed to purchase your car. When you make your monthly payments your money is first applied to taxes and fees, then applied to interest that is due, and the remainder goes to paying down your principal.Proof of EmploymentA statement or document that shows you are employed. This proof may be a paystub, a letter from your employer, or a W2. This shows the lender that you have means to repay your loan.Proof of InsuranceTo show that you have insurance coverage the lender will usually require a copy of your insurance policy that states the amount of coverage.Proof of ResidenceYou will need to show where you actually live as part of the refinancing process. This cannot be a PO box. Lenders want to know where the car will physically be parked if they need to seize it because you have defaulted on your loan.RefinanceThis is when you pay off your current loan with a new loan. Your new loan will ideally have a better interest rate and/or better terms. Refinancing allows you to add a cosigner or co borrower, change your interest rate, and change your repayment period.Secured LoanA loan that is backed by collateral, such as a car loan. If a person defaults on their loan the collateral is taken as payment.Soft InquiryThis allows lenders to review your credit score and part of your credit report without it counting as a hard inquiry. Also known as a soft pull, this is common when getting preapproved for a loan. Soft inquiries do not affect your credit score and your approval is not required for this.UnderwaterWhen you owe more on your loan than your car is worth. For example if the market value of your car is $15,000 but you owe $17,000 on your car, it is considered underwater. This happens when depreciation outpaces your payments. It is common for this to happen if you do not make a down payment (or make too small of a down payment). Unsecured LoanA loan that is not backed by an asset for collateral. These loans tend to have higher interest rates because they are higher risk for the lender.Upside DownThis is the same as being underwater. It is when you owe more on your car than your car is worth.Usury LawDefines the maximum amount of interest in your state that a company can charge you. Those are all the terms you should know before you refinance your car loan.At Auto Approve we take the mystery out of refinancing. After all, refinance is our specialty. So don’t wait to get in touch and find out just how much money you could be saving.GET A QUOTE IN 60 SECONDS
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Top Car Loan Refinancing Mistakes (and How to Avoid Them)

01/25/2023 12:07
Car refinancing may seem simple. After all, you are just replacing one loan with another, right? Despite how simple it may seem, there are a lot of ways that it can actually go wrong. So today we are talking about the most common mistakes people make when refinancing their car loan and how you can avoid them.Here are the top car loan refinancing mistakes and how you can avoid them. What is car loan refinancing?Car loan refinancing is when you replace your existing car loan with a new car loan, ideally one that has better terms and a better car loan APR. When you refinance, you apply for a loan as you did with your initial financing. When you secure your new loan, your new lender will pay off the old loan and you will no longer owe your original loan. You will be responsible for the remaining balance on the loan as well as whatever fees are outlined in your loan agreement.There are many reasons why people choose to refinance their car loans. But the primary reason is that you can save a lot of money by doing so. Refinancing is popular for the following reasons:You can save money by refinancing to a lower APR.You can cut your monthly payments by refinance to a longer repayment period.You can save money over the life of your loan by shortening your repayment period.You can add a cosigner to help them build credit.You can add a cosigner and get a better APR due to their good credit history.You can remove a cosigner.Refinancing your car loan can be incredibly beneficial, but it’s important to be prepared before applying for car loan refinance. Mistakes with car loan refinancing can cost you money, time, and can give you one big headache.What are the most common mistakes people make when refinancing their car loan?They don’t check the refinancing requirements first.Before you apply for a car loan refinance you should be aware of the requirements (and if you qualify). Each lender will have different requirements about the age, condition, and mileage of the car, the balance remaining on your car loan, and the time remaining on your car loan. Be sure that you qualify before you waste your time applying.They accept the first offer they receive.A big mistake that many people make is accepting the first offer they receive. Just like with a lot of things in life, it’s important to shop around when you are refinancing your loan. You should aim to apply with 3-5 lenders when you refinance. This gives you wiggle room and allows you to compare rates and terms. You should consider applying with traditional banks, online lenders, and credit unions. When you apply, you should be sure to compare all of the following terms:The interest rateThe prepayment penaltiesThe repayment periodThe customer satisfaction ratings.All of these factors are important when determining which car loan refinance is the best for you. Comparing your different offers is much easier when you use a company that specializes in car loan refinance, as they can help you apply and compare.They refinance a car that is too expensive.When refinancing a car loan you want to be sure that the car isn’t too expensive. You should know what the market value of your car is before you refinance, and compare that to the balance you have left on your loan. If you owe more on your car than your car is worth, your loan is considered underwater. This commonly happens if you did not put enough money as a down payment or have overextended yourself and are having trouble making monthly payments. They do not check their credit score first.Your credit score is the most important factor in the car loan APR you will be offered (at least the most important factor that you have control over). Before you consider refinancing your car loan you should check on your credit score and see how you are faring. Do you have excellent credit or great credit? You will most likely be approved and be offered a decent APR. But if your score is less than stellar you will most likely have a harder time getting approved and will be offered a higher APR than if you had excellent credit.Before you apply, request a copy of your credit report. You can do this for free once per year at each of the major credit bureaus. When you get a copy, review it thoroughly for errors and determine if there are steps you can take to increase your score. Do you have a tendency of making late payments? Do you have a few accounts with high credit utilization ratios? Looking through your report can teach you where you should be working to improve. Then see what steps you can take to improve your score before you apply for refinancing. Can you request higher credit limits? Can you prioritize which debts you pay down first? Preparing your credit score for refining will make a world of difference and help you to secure the best car refinance possible.They give up if their application is denied.There are quite a few reasons why people may be denied the first time they apply for a car loan refinance.  These reasons include:There were errors in the applicationYou had a poor credit scoreYou had a lot of debtYou didn’t have a long credit historyWhile some of these may take more time to correct than others, they don’t mean that you should give up on your refinancing entirely. Lenders are required to tell you why you were rejected, so you will be able to take action and fix whatever the problem is.A very common reason people are denied a car loan is that there were errors in the application. If you forget to fill out a section or fill out a section incorrectly you may be automatically denied a car loan. And while it can be discouraging, it’s always best to hunker down and redo your application, paying extra attention to every section. If you were rejected due to a poor credit score or a lot of debt, try to improve these parts of your finances and reapply in a few months. It may take time, but it will be worth it.If you were denied due to not having a long credit history, you have two options. You can wait and try to build more credit and get a longer credit history length, or you can ask a loved one to cosign. A cosigner can help get you qualify for a refinance and can help you secure a lower car interest rate. Make sure your cosigner is someone who you trust who has a good credit history.How can I get the best car loan refinance?If you are considering refinancing your car loan, here are our top tips for getting the best refinance possible. Do your research. Research which lenders you want to apply for refinancing with and what their requirements are. Prepare your finances. Get a copy of your credit report and determine how you can get your score in the best shape possible before applying for refinance. Fixing errors, paying down debts strategically, and requesting higher credit limits may all help to give your score the boost it needs.Consider a company that specializes in refinance. Using a company that specializes in car loan refinance can save you a lot of time, hassle, and stress. Refinancing companies like Auto Approve know how to shop around and compare to get you the best car loan refinance possible. Know what your current loan looks like. It’s a great idea to review your current loan thoroughly before you apply for refinance. You should know what your APR is, the balance that is remaining, and what prepayment penalties and/or fees there might be. This will help you determine what your refinance loan should look like.Gather your information ahead of time. It can save you a big headache if you gather your information ahead of time. You will need identification, pay stubs, proof of insurance, proof of residency, and your loan information to apply with most lenders. Preparing yourself and your finances for car loan refinancing will help ensure that you get the best deal possible. Those are the biggest car refinancing mistakes people make and how you can avoid them.Mistakes happen, but when mistakes happen in your car loan refinancing it can cost you. Car refinancing is simple when you use a company that specializes in refinancing. At Auto Approve, it’s what we do. We have relationships with lenders across the country so we can get you the most competitive deals and rates. We can also help guide you through the process of refinancing so that it’s as easy as can be. So don’t wait to save. Contact Auto Approve today to get started!GET A QUOTE IN 60 SECONDS
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What is the Current Refinance Rate for Cars?

01/24/2023 19:38
When you decide to refinance your car, your goal is most likely to save money (although there are other reasons people choose to refinance). And while there are many factors that affect the car loan APR you are offered, the current auto refinance rates are a huge contributor to the APR you will be offered. So what are the current refinancing rates for cars in late January 2023?Here are the current refinance rates for cars in January 2023.What factors go into refinancing a car?When you refinance a car, there are several factors that will determine what car loan interest rate you are offered. Lenders will consider the totality of your application when determining the appropriate APR for your car loan.Your credit score Your credit score is an indicator of how likely you are to pay your loan back in full and on time. This is one of the most important factors that lenders will consider when calculating your car loan interest rate. Your score will fall into one of five brackets:300-579: Poor580-669: Fair670-739: Good740-799: Very Good800-850: ExcellentThe best refinance rates are reserved for those with excellent and very good credit. If you have poor credit you may have a very hard time finding a reasonable car loan APR rate, or getting approved at all. There are certain lenders that deal with those who have poor credit, but they typically have very high interest rates and strict penalties. That is why it is always a good idea to work on your credit score before applying for car loan refinance to give yourself the best rates possible. Your incomeLenders will also pay careful consideration to your income to ensure that you have the means to repay the loan. Lenders will look at your pre tax income to determine if you can afford the loan you are seeking. Your debt to income ratioIn addition to just your income, lenders will consider how much your income compares to your debts. If you owe a lot compared to how much income you have, lenders will feel like you are overextending yourself. The lower your DTI is, the more likely you are to be approved (and for a better refinance interest rate). Your DTI should be below 40%, but you may still qualify if your ratio is up to 50%.Your carLenders will also look at the car that you are refinancing when determining if you qualify and the refinance rate. They will consider the make, model, age, trim features, and mileage. They want to ensure that the car they are loaning money for is worth the money. In other words, if the market value of the car is less than the loan value, they might not see the value in refinancing it. If you default on the loan, they want to ensure they can sell your car and recuperate any losses.What is the current refinance rate for cars?While the car loan APR you will be offered will be based on the above factors, it will also be based on the market rates. While car refinance rates are not as sensitive to fluctuations in the economy as much as some other interest rates, they are still very much affected by the current economic conditions.So what are the current refinance rates for cars? As of late January 2023, the current car loan refinance average rates are:If you have a credit score between 750-850:4.67% for a 36-month loan5.55% for a 48-month loan5.68% for a 60-month loan6.15% for a 72-month loanIf you have a credit score between 700-749:6.48% for a 36-month loan7.15% for a 48-month loan7.05% for a 60-month loan7.16% for a 72-month loanIf you have a credit score between 640-699:8.03% for a 36-month loan10.11% for a 48-month loan9.81% for a 60-month loan9.84% for a 72-month loanIf you have a credit score below 639:11.84% for a 36-month loan13.27% for a 48-month loan13.43% for a 60-month loan13.35% for a 72-month loan*Note that all of the above interest rates are averages from rategenius.comAs you can see, it is incredibly beneficial to have a good credit score. Those with excellent credit were offered interest rates that were less than half of those with poor credit for loans over the same length of time. Taking the time to improve your credit score before you apply for car loan refinance can help ensure you will get the best rate possible.Is it smart to refinance my car?So is it a good idea to refinance your car? Well, it depends on your situation. But if you answer yes to any of the questions below, it might be worth considering car loan refinance. Has my credit score improved since initial financing?Improving your credit score is one of the top ways you can secure a lower car loan APR. And when you secure a lower APR, you can save a lot of money over the life of your loan.Your credit score may have improved for a number of reasons:A negative event expired, such as a bankruptcy.You paid down some of your debt.Your credit limits increased.You have been making consistent on time payments.Hard inquiries on your report expired.Errors on your credit report were corrected.Your score can increase or decrease for many reasons, so it’s a good idea to keep an eye on your score and report (we recommend checking your report three times per year). Having a good credit score will not only secure you better car loan interest rates, but it will help you qualify for other loans, get better insurance rates, and can even help you score a job. So it’s a good idea to pay a lot of attention to your credit score.Am I having trouble making my monthly car payments?If your monthly payments are getting away from you, refinancing your car loan may help you. Refinancing will allow you to get a new car loan interest rate, but even if you do not qualify for a lower APR, refinancing may still help you to get more manageable monthly payments.When you refinance your car you are able to change your repayment period. The length of your repayment period will drastically change the monthly payments you will have. A shorter repayment period will mean that your payments will be high, since you have a shorter amount of time to pay back your loan. A longer repayment period means that you will have more time to repay your loan, so the principal will be divided up over a longer period of time. This means much lower monthly payments for you. But it also means that you will pay a bit more in interest. Interest rates tend to tick a little higher as the repayment period extends. You will also pay interest over a longer period of time, so it can cost you more. But this may be more than worth it to give you breathing room in your budget.Do I want to add or remove a cosigner? Another major reason that people refinance is to add or remove a cosigner. You cannot simply call up your current lender and request that someone be added or removed from your loan. This is because lending decisions are made based on everyone who is listed on the agreement, and removing or adding someone might drastically affect if the loan will be paid back or not. So in order to add or remove a cosigner you will need to refinance your car loan.Are the prevailing market rates better now than they were when I originally financed?Look at the market rates today and compare them to your initial financing. If the rates today are lower, there’s a chance you can qualify for a lower rate and save yourself a good deal of money with a car loan refinance.And that’s what the current car loan refinance rates look like in early 2023.A lot of people are overpaying every month on their car loans. That means that car loan refinancing can save a lot of people a lot of money. And the best news is that refinancing your car loan is super easy when you use a company that specializes in car loan refinancing, like Auto Approve. Refinancing is our specialty, so our experts can help guide you through the process from start to finish. They can help you determine if you qualify for car loan refinance, help you fill out the applications, and assist with the final paperwork. Plus you can get other benefits such as GAP insurance and a vehicle protection plan which can be bundled into your monthly payments. And all of this can make refinancing super easy!So don’t wait any longer to start saving money. Contact Auto Approve today to get started!GET A QUOTE IN 60 SECONDS
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What is the Best Length of Time to Lease a Car?

01/20/2023 12:44
You may have preferences on a lot of details about your new car. The make, the model, the trim level. But you will have to decide on more than that when you choose to lease a car. You will also have to decide on the length of the lease, which you may be undecided on. Let’s talk about the best length of time for a car lease and how you can decide what is right for you.What is a lease term?When you lease a car you are essentially renting the car from the dealership. The lease term is the amount of time that you agree to rent the car for. Some dealers offer short term leases, which can be 3 month, 6 month, 9 month, or 12 month lease terms. On the other end of the spectrum there are longer term leases that are 4 years. But it is much more common for dealers to offer 2-3 year leases. When determining which lease term is right for you, you should consider the following:Your monthly budget for car paymentsHow you intend to use the car and why you are leasing in the first placeThe shorter the lease term is, the more expensive the monthly payments will be. Additionally, if you are leasing because you want to get a new car every few years, it doesn't make sense to get a longer lease.What lease term should I choose?Short term leaseShort term leases are not very popular, and for good reason. You will pay the most amount of money per month for a short term lease (and it may even be more expensive than financing). But there are still times when it may make sense to you. If you have another car that requires extensive repairs and you know you will need a car for several months, this may make more sense to you than a rental car. Rental cars charge by the day so they can quickly turn into a money hole.2-3 year leaseThese are the most popular lengths of car leases. They allow you to have the car for a decent amount of time while still giving you the benefits of leasing. Typically your warranty will last the entire period of your ownership, so you do not need to worry about expensive repairs. You will also find decent monthly payments by choosing 24-36 months. Choosing the 36 month lease will give you a better interest rate though.Long term leaseYour other option is to select a long term lease, which is typically 4 years. This will give you the lowest monthly payments, although you do run the risk of outlasting your warranty or growing bored with the car before the lease is over. How to decideIt simply comes down to your preference. Are you happy to pay a little more and get to trade your car in 2 years? Would you rather pay less every month and stick it out a little longer with your ride? Considering what is important to you and what you can afford will help you to make the right choice.What happens at end of car lease?No matter how long your lease term is, your car lease will eventually end. And then what? You will have three options at the end of your lease term:Trade in for a new leaseTurn the car in and walk awayPurchase your leased car from the dealershipTrade in.Many people who lease like to have a new car every few years, and leasing allows them to do so with minimum stress. Trading in is a great option if you would like to continue leasing, haven’t gone over the mileage limit, and haven’t had major wear and tear on your car. You can simply return your car, pick out a new one, and sign a new lease agreement.Turn the car in.If you have decided that leasing isn’t right for you, you can simply turn your lease in and walk away. You will be responsible for any fees due to excessive mileage and excessive wear and tear, but beyond that you will be free to do as you wish. Maybe you do not need a car at all, or maybe you’d be happier buying a new or used car. Buyout your lease.Buying out your leased car is another popular option that might be right for you. Buying out your lease will allow you to purchase your car for the residual value that is listed in your contract. This is a great option if any of the following apply to you:The residual value of the car is less than the market value of the carYou really like your car and you don’t want to part with itYou have gone over the mileage allowance and will be responsible for overage feesYou have significant wear and tear and will be responsible for feesIt is very common right now for residual values that are listed in the contract to be less than the market value of a car. This is because residual values are determined at the beginning of the lease and cannot be changed. The increased competition in the used car market has caused an increase in market value, so it is very common for the buyout price to be cheaper than the car’s value. This means that even if you do not want to keep the car you can buy your leased car and sell it for a profit. Getting a lease buyout loan is a great way to do this.Or, maybe you just really like your car and don’t want to part with it. Buying your lease out is a great way to own the car that you love, and it is usually a very affordable option.That’s everything you should know about car lease terms and how you can decide what lease term length is right for you.Leasing a car is a popular option for many people, but it can be hard to decide how long of a lease term is appropriate. Taking a look at your needs and your budget can help you determine which lease term length is best for you. And when your lease ends, a car lease buyout loan can help you keep the car you love (or sell it for a pretty penny).If you are interested in buying out your lease, contact Auto Approve today! Our agents can help guide you through the application process and find the car lease buyout loan that is right for you!GET A QUOTE IN 60 SECONDS
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10 Tips for Spring Cleaning Your Finances

01/19/2023 17:36
It’s still cold outside but we are thinking about the spring, and that means one thing: spring cleaning! While spring cleaning isn’t the most fun thing in the world, it is always a good opportunity to reboot and refresh. When you think of spring cleaning, you may not think immediately of cleaning your finances, but it’s actually a great time to do so. Today we are going to talk all about the benefits of cleaning out your finances and how you can do so effectively.Here are our top 10 tips for spring cleaning your finances.Tip#1: Review your financial goals.Now is a great time to look at what your financial goals are for the next several months. How do you want to prioritize your spending this year? There are a lot of different goals you may have, and those goals can motivate you to make some healthy changes in your finances. They may include:Saving for a down payment for a house.Saving for a down payment for a new car.Paying off credit card debt.Going on a vacation.Starting a retirement fund.Starting an emergency fund.Expand (or start) your investment portfolio.Realigning your goals will help you focus on cleaning out your finances and keeping your eye on the prize.Tip #2: Review your budget.Now that the holidays are over and reality has set back in, it’s a great time to take a look at your budget. With your financial goals fresh in your mind you can see how much you need to save. Going through your budget (or maybe starting over with a clean slate) can help you set yourself up for success.Account for all of your incoming money in one part of your spreadsheet. This can include your paycheck, any money from a side hustle, dividends, or rental income. Then account for all of your expenses in another part of your spreadsheet. This will include fixed expenses, such as rent and insurance, which does not change from month to month. This will also include variable expenses, which can change from month to month. Variable expenses, such as gas and food, can be averaged out over several months to give you a rough idea of how much you can expect to pay. It’s good to view your budget in a positive light, knowing that saving money will help you to reach your goals for the future. If you view your budget as a restriction, you will likely not stick to it.Tip #3: Cancel subscriptions you don’t use.When you go through your budget you should notice what services you are paying for that you don’t actually use (or use scarcely). Subscriptions have a way of creeping up on us. Netflix, Hulu, HBO, Disney+, Peacock–it’s never ending. So it’s good to sit down and see how much each one is costing you, and decide whether or not each one is worth it. Tip #4: Set up automatic savings deposits.Saving money is easiest when you don’t have to think about it. When you go through your budget you can determine what extra money you may have to deposit into savings (such as the money you freed up by canceling subscriptions). Set up a monthly transfer from your checking account or have a certain percentage of your paycheck deposited into savings. Automating this will help you save with very little effort on your part.Tip #5: Set up automatic investing.If you are in a position to invest some extra money, there are a lot of apps and websites that can help automate this for you. You can select the level of risk you want to take and these sites will allocate your money appropriately. Acorns, Betterment, and Wealthfront are just a few that offer services like this.Tip #6: Review your loans.If you have loans, such as a mortgage or auto loan, review the APR and repayment terms you have. If your credit score has improved since your initial financing, you may be able to refinance your loans and get better interest rates and conditions. If you are wondering if you qualify for a car loan refinance, Auto Approve can help you determine if you are eligible. Refinancing your loans can help you save money by reducing the amount of interest you will pay over the life of the loan. It also allows you to change your repayment plan, which can drastically change your monthly payments. If you refinance to a shorter repayment period you will end up spending more money every month, but you will save a lot of money on interest over the repayment period. If you refinance to a longer repayment period you will significantly lower your monthly payments and give yourself a lot of breathing room every month (although you will end up spending more money over the life of the loan). Either way, refinancing can help you manage your money goals.Tip #7: Check out your credit report.It’s incredibly important to keep an eye on your credit report throughout the year. Now is a great time to request a copy of your credit report and carefully review it for errors. When you sit down with it, be sure to check the following:Your personal information section.Review to make sure that your name, address, social security number, employment history, and marital status are all up to date.Your public records section.Review to make sure that there are accurate records of any lawsuits, bankruptcies, liens and judgements. Your credit accounts section.Review it to make sure your payment history is correct, that account ownership is correctly listed, that debts that are paid off are listed as so, that closed accounts are accurately noted, and that there is no negative payment information that is older than seven years.Your inquiries section.Review this to ensure that you authorized any hard inquiries on your account.If you notice any errors, be sure to report them to the credit bureaus as soon as possible. Fixing any errors can make a huge difference on your credit score.As you go through your report, see where you can make improvements. Do you tend to make payments that aren’t in full? Are you a little late here and there? Working to improve your less than great habits can result in a big uptick for your credit score. Tip #8: Actually clean out your house.If we are talking about finances, why did actual cleaning make it onto the list? Well this is actually a great time to do both. Chances are your house is filled with things you don’t need, use, or want anymore. Clearing out the clutter will help you focus your energy and help you make a little cash along the way.Go through every room in your house (you can split this up over a few days so it’s not so overwhelming) and go through every item. Sort everything into three piles: toss, keep, and sell. Electronics, furniture, clothes–these are all things that can be sold. You may be surprised what some people will sell. Try selling on Ebay, Facebook Marketplace, or hold a garage sale. Everything else that can’t be sold (or just doesn’t sell) can be donated. There are a ton of organizations that will come and pick up donated items from your house, such as Greendrop. When you put your room back together, be thoughtful of how you organize.Tip #9: Declutter your paper.Now is a great time to go through all of your paperwork that is taking up too much space. Do you have bank statements, bills, and other miscellaneous papers hanging around? Chances are you don’t need them. Anything that is important should be scanned and uploaded (and kept with a backup). Anything that is worth keeping should go in a fireproof safe. But most billing statements can be found online and downloaded, so save yourself some work if that is an option.Tip# 10: Review and adjust your withholding.You should aim for a $0 tax bill come April. If you withhold too much, the IRS has your money locked up interest free. If you withhold too little, you will owe money and have to pay a penalty. Revisit this number to see how you can tweak it to work for you. Consider seeing a tax advisor to get this number where you want it.Those are our top tips for spring cleaning your finances this year.As we trudge through the rest of winter, spring is on the horizon. Take this time to recharge and get your finances sorted and organized before the rest of the year flies by. You won’t regret taking the time to sort everything out, as it will likely result in a more comfortable financial situation for the remainder of the year.Now is a great time to start fresh with a new auto loan. If refinancing your car loan sounds like a good idea to you, don’t wait to contact Auto Approve! Our experts can help determine if you are eligible and help you navigate the process.So don’t wait, get your free quote today!GET A QUOTE IN 60 SECONDS
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How Do You Prepare for Auto Refinance?

01/18/2023 20:57
There are a lot of benefits to refinancing your car. And the process is actually pretty simple. It can typically be done in a day, and the benefits can be long lasting. But what should you do to prepare for your car loan refinance, and how can you get the best rates possible?Here are our top tips for preparing for your car loan refinance.Tip #1: Decide if it’s worth it to refinance your car loan.Before you start the refinance process, be sure to ask yourself if refinancing your car loan is worth it. After all, if your car loan has a good APR and your repayment terms are working for you, it might not make sense to refinance.To determine if refinancing is worth it, ask yourself the following questions:Has my credit score improved since my initial financing?Have the market rates dropped since my initial financing?Am I having trouble making my monthly payments?Do I want to add or remove a cosigner?If you answered yes to any of these questions, it might be a good time to consider refinancing your car loan. Your credit score is the biggest factor in the car loan APR that you will be offered. So if you know that your credit score has improved since your initial financing, there is a good chance that you will qualify for a better APR. And that can add up to a lot of money in savings.Similarly, if the market rates have decreased since your initial financing, there’s a good chance that you will qualify for a lower APR.If you are having trouble making your monthly car loan payments, auto refinance may be a great option to lower your monthly payments. If you are able to refinance to a lower APR your payments will be lower every month and save you money overall. But even if you don’t qualify for a lower car loan APR, an auto refinance allows you to change your repayment period. Lengthening your repayment period can significantly reduce your monthly payments (although you will end up spending more over the length of your loan).If you would like to either add or remove a cosigner on your loan, refinancing is the best way to do this. Maybe you have a cosigner on the loan because you were going through a rough financial time and needed a little boost on your application. Removing them will require you to restart your loan entirely.On the other hand if you are interested in refinancing but don’t have a stellar credit score, refinancing your car loan with a cosigner can get you a better car loan APR and better repayment terms.Tip #2: Review your current loan.In order to determine if it’s worth it to refinance you should review your current loan. First up, you will have to make sure that your current loan is eligible for auto refinance. Most lenders have a minimum amount that you will have to borrow so if your loan is near the end of repayment you may not qualify.Additionally you will want to know your current rate, monthly payment, and repayment period. This will help you determine what you can expect from your auto refinance. Be sure to read through any fine print to determine whether or not there are prepayment penalties. Sometimes these penalties will outweigh any savings that vehicle refinance may provide, so you want to be sure you do the math ahead of time.Tip #3: Prepare your credit score.As we mentioned before, your credit score is the biggest factor that lenders will look at when considering whether or not to offer you financing. Because of this, you want to prepare your score as much as possible and ensure that your score is in good shape. There are several steps you can take to ensure your score is in the best shape possible:Make full, on time, consistent payments to all of your accounts.Enroll in autopay for your bills if possible.Resist opening any other new lines of credit.Request higher credit limits on your accounts.Pay off debts that have a high credit utilization ratio first.Request a copy of your credit report and review it for errors.If you have a less than stellar credit score, you may still be able to get an auto refinance loan. But the better your score is, the better the car loan APR and repayment terms will be, so it’s a good idea to take the time to improve your score before applying. The best car loan refinance rates are reserved for those with good and excellent credit scores, typically above 750. The higher your score is, the better your car loan APR will be.Tip #4: Do the math.It’s important to understand exactly what your goal is with refinancing. Do you simply want to have lower monthly payments? Do you want to save money overall during the life of the loan? Knowing what your goal is will help you when deciding which loan is right for you.If you want to have lower monthly payments, a lower interest rate and/or lengthening your repayment period will help. If you want to save money overall, a lower interest rate and/or shortening your repayment period will help. You should take into account the current value of your car when deciding what is a good option for you too. Going to Kelley Blue Book or Edmunds and seeing your car’s value will help you compare it to the amount you have left on your loan. If you owe more on your car than the car is worth, you will most likely have a hard time refinancing (this means your car is underwater).Tip #5: Prepare your paperwork.It’s good to have all of your ducks in a row before you start applying for auto refinance. Getting your paperwork gathered and scanned will help you apply quickly and easily.Requirements will vary from lender to lender, but typically all lenders require the following documents:Proof of identity. This may include a driver’s license or passport.Proof of income. This may include W-2s or your most recent pay stubsProof of residency. This may include a recent utility bill, your lease agreement, monthly mortgage statement or tax bill.Proof of insurance. A recent monthly statement or insurance card should suffice.Information about your existing loan. They will want to know your balance, interest rate, loan term and monthly payment.Details about your vehicle. The year, make, model, mileage and vehicle identification number will all be required.The exact requirements may vary from lender to lender, but this will give you a good idea of what you will need and help you to get a head start with your applications. Having all of this information ready to go will make applying for auto refinance super easy.Tip #6: Use a company that specializes in auto refinance.Refinancing your car is super easy when you use a company that specializes in auto refinance. Not only will they be able to walk you through the process, but they will have relationships with lenders across the country (which means you will have the best chance at securing good terms.)Using Auto Approve will make refinancing your car loan a cinch. There are so many benefits to using Auto Approve, including:Fast turn-around timePersonalized serviceGAP insurance availableLarge network of competitive lendersVehicle protection plans that can be bundledAnd moreOur customers love us, but you don't just have to take our word for it.  We have an A+ rating from the Better Business Bureau, a 96% would-recommended rating on Lending Tree, and a 4.7 out of 5 star rating on TrustPilot. With ratings like that, you know you can trust Auto Approve to get you the best refinance rates and make the process as easy as possible.When you use a company that specializes in refinance, they can help you with the following:Determine if your loan is eligible for car loan refinanceHelp you with your car loan refinance applicationsShop around for the best rates and termsGuide you through picking the best car refinance loanHelp you cross the “t”s and dot the “i”s with your new loanCoordinate paperwork and repayment for your original loanCalling in a company that specializes in refinance can take a lot of things off of your plate and simplify the process a lot.Those are our top tips for preparing for auto refinance.Refinancing your car loan is easy when you follow these tips. It’s even easier if you use Auto Approve to handle your refinance for you. It takes just a few minutes to get started (and you don’t even need to provide your social security number to determine whether or not you qualify).So don’t wait to see how much money you could be saving, get in touch with Auto Approve today!GET A QUOTE IN 60 SECONDS
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What's the Difference Between a Warranty and a Protection Plan?

01/06/2023 00:00
When you buy a new car, a factory warranty always comes standard. Warranties are essentially a promise from the dealership that they stand behind their product and that if something goes wrong, they will be sure to fix it for you. But vehicle protection plans are a separate thing entirely. So how do vehicle protection plans work, and how are they different from warranties?Here’s everything you need to know about warranties and vehicle protection plans, and how you can decide if a vehicle protection plan is worth it.What is a factory warranty?Factory warranties have been offered for almost one hundred years as a promise to the consumer that the car manufacturers stand behind their products. In the early years of car manufacturing, “buyer beware” was the slogan of the time. Henry Ford decided to offer a warranty to give peace of mind to consumers, covering “90 days on material; 30 days on labor. No guarantee whatsoever on fan belts, glass, bulbs, wiring, transmission bands, hose connections, commutator shells, rollers, spark plugs or gaskets.” While that warranty is nothing compared to today, it set the stage for the future. That 90 day guarantee became standard with auto purchases up until the 1950s. At that time, manufacturers began to cover more and more parts, but realized that there needed to be a time or mileage limitation to keep the warranty reasonable. As competition emerged at home and abroad, warranties became a marketing tool. At times, these warranties cost manufacturers a lot of money when they were not producing quality materials. And while this hurt them, it also encouraged them to make better quality vehicles that could stand up to the competition (and not need warranty repairs).Today most new cars come with limited warranties. They either come with a bumper-to-bumper warranty, limited powertrain warranty, or both. Limited bumper-to-bumper warranty: covers most things that can go wrong on your car, generally only excluding things like wear and tear and theftLimited powertrain warranty: covers the parts of your car that make the car drive, such as the drivetrain and the transmissionThe term “limited” means that it is for a limited amount of time, typically three or five years or a certain amount of miles, whatever comes first. Many dealers will offer a combination of these two types of warranties, such as a three year limited bumper-to-bumper warranty and a five year limited powertrain warranty. This gives owners an additional two years of coverage for the main components of the car.What is a vehicle protection plan? The problem with warranties is they don’t last forever. And when they expire consumers may feel significant unease that they will be on the hook for some expensive repairs. That’s when a vehicle protection plan comes into play.Vehicle protection plans are designed to cover much of the same things that a warranty covers. Coverage will vary greatly from plan to plan, but typically a vehicle protection plan will cover:EngineTransmissionDrive AxleElectrical ComponentsBrakesSuspensionAnd moreLet’s say you have a three year bumper-to-bumper warranty and your car is financed over four years. Your warranty expires and your transmission goes when you haven’t fully paid your car off yet. Now you are on the hook for a $3200 repair bill (and you don’t even own your car yet!)If you are like a lot of people, you don’t just have $3200 laying around that you don’t need. A bill like that would cause a serious problem for many people in the United States. In fact a recent Prudential study found that only 50% of Americans have more than $500 in savings. So a big car repair would really throw your finances into disarray.But if you had a vehicle protection plan this would not be the case. The vehicle protection plan would cover the new transmission and labor. You may be asking “Aren’t I just paying for the protection plan in place of the repair? What is the benefit?” It’s true that some vehicle protection plans are paid for up front. That one sum can save you hassle and headache when something does go wrong. But what is even better is if you can pay in monthly installments. Auto Approve allows you to bundle a vehicle protection plan with your car loan. So instead of paying it all at once, you are just paying a little extra every month on your financing payments.It is important to note that vehicle protection plans do not cover everything. The following are commonly not covered by vehicle protection plans:TiresPaintExhaust systemsReplacement light bulbsVehicle batteriesShocksEssentially vehicle protection plans do not cover maintenance or damage due to wear and tear. Vehicle protection plans also do not replace your regular insurance, which would cover repairs from accidents.Is it worth it to get a vehicle protection plan?So the million dollar question is: is it worth it to get a vehicle protection plan? Well, it depends a lot on your situation. For many people vehicle protection plans are unnecessary. If any of the following apply to you, it might not be worth it:You like to work on your car yourself and do not want to be obligated to take your car to a mechanic.It’s your secondary car that you do not rely on. If your car is in the shop for a while it won’t be a big deal for you. You are thinking about getting rid of your car in the very near future.A vehicle protection plan might be a good idea if you prefer taking your car to the mechanic, depend on your car a lot, and plan on keeping your car for a while. And there are a lot of benefits to getting a vehicle protection plan.It offers peace of mind.One of the biggest reasons people like vehicle protection plans (and warranties in general) is that it provides you peace of mind. There is not a cloud hanging over you of what could happen. You know that if something goes wrong with your car, you are covered.It can protect your car’s financing.If your warranty ends before your loan repayment period is over, a vehicle protection plan is a great idea. Consider our example above, where the warranty ended at three years but the loan repayment period was four years. If something happens to your car after the warranty is over but you still have to make payments, you will be in a very undesirable position. If you are unable to afford to fix your car, you will still be making payments on a useless car. But a vehicle protection plan can fill that gap and ensure you are covered.There are usually extra perks.Many vehicle protection plans offer other perks in addition to paying for repairs. For example, a vehicle protection plan with Auto Approve comes with the following perks:24/7 roadside assistanceUp to $50 per day rental reimbursementCourtesy towingYour choice of certified-ASE mechanicWhen something goes wrong with your car, there are always additional costs that you may not think of immediately. But a rental car and towing can add a lot onto a repair bill (and add further stress to an already tight budget). But a vehicle protection plan will help you pay for all of these costs while your car is repaired by a certified mechanic. Afterall, you have to be sure that the repairs will be done correctly, so a certified mechanic is always a good idea.It can help you plan for emergencies.Ok, so you can never really plan for emergencies. But you can try to be as prepared as possible for when something happens. It’s always a good idea to have an emergency fund (even if you get a vehicle protection plan, you should have an emergency fund as well). But vehicle protection plans give you another way to be prepared. And by rolling your payments into your financing payments you can easily get a vehicle protection plan without worrying about starting a separate account or budgeting it out separately. That’s the difference between warranties and vehicle protection plans, and why a vehicle protection plan might be a good idea for you.Vehicle protection plans give you a little extra protection and coverage in an uncertain world. While it is not a replacement for a regular warranty or insurance, it can help fill in the gap if something should happen to your car.And the great news is that if you refinance your car loan with Auto Approve we can bundle a vehicle protection plan into your finance payments. This makes it easy and affordable to get extra coverage, plus all of the extra perks that come with a vehicle protection plan. If refinancing your car loan is on your mind, contact Auto Approve today! Our experts can help guide you through the process and let you know just how much money you could be saving.Don’t wait, get your free quote today!GET A QUOTE IN 60 SECONDS
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Will Car Leases Go Down in 2023?

01/05/2023 00:00
Leasing a car is a great option for many people, but leasing has changed significantly in the past few years. It is becoming a less popular option, with about 30% of new cars being leased before the pandemic compared to about 20% now. But why is this the case, and is leasing a car still a good idea?Here’s what’s going on with car leases in 2023.What are the benefits of leasing a car?Leasing a car is a popular choice for a number of reasons, and depending on your situation it might be a great option for you. It is cheaper than financing a car.One of the major advantages to leasing is simple: it’s much cheaper. When you finance a car you are paying for the whole car over the course of your repayment period. Whether it’s three years or six years, you will pay off the entirety of the car, plus interest and fees, in that period. But leasing works differently. You only pay for the depreciation that occurs over the period that you are leasing. If your car’s residual value (the expected value of the car at the end of the lease period) is $10,000 less than the sticker price of the car, your lease payments will pay for this $10,000 difference (plus interest). Compare that to paying for the entire $30,000 car and it’s clear to see that it's a much cheaper alternative.You don’t need as much money up front.Similarly, when you lease a car you don’t have to worry about securing a down payment. Down payments are essential when you are financing a car. They keep your monthly payments lower, secure you better car loan APRs, and help combat depreciation (which can make your loan go underwater). But leasing doesn’t require a down payment, and there is rarely a benefit for providing one.You can get a new car every few years.If you are the type of person who likes to have the latest and greatest, leasing is a great option. Depending on your lease period, you can get a new car every two or three years without the hassle of selling your car.It provides more tax deductions.If you are a small business owner or work for yourself in some capacity, leasing a car allows you to write off more than if you were financing a new car.Why is it so hard to lease a car right now?If there are so many benefits to leasing, why is it so hard to lease a car today? Well, there are three primary reasons why leasing a car today is more difficult: higher car prices, fewer returning customers, and less compelling lease offers.Higher Car PricesIt’s no secret that new car prices are still at record highs. The pandemic shutdowns caused a delay in new car production which we are still feeling the effects of today. A shortage of raw materials, delays with semiconductor production, and labor shortages have helped create a slowdown in new car production. And when there is less inventory there are higher prices.One of the main reasons people lease is because it’s affordable. But these increased prices are driving higher monthly lease payments and pricing many people out of leases. Fewer Returning CustomersAnother major allure of leasing is that you can get a new car every few years. But in order to get a new car, you have to give your old one back (or buy and then sell it). The lease buyout price is determined based on the residual value of the car, a number that is predetermined when the lease is originally signed. The residual value cannot be changed later on based on market value.But with the current high prices of new cars, it made much more sense for lessees to buy out their leases. The residual values listed in their contracts were much lower than the market prices of their cars, so buying out made much more sense than simply handing the keys back over and leasing another car (with a higher sticker price and therefore higher monthly payments).Many potential returning lessees chose to get a car lease buyout loan which allowed them to purchase their leased cars and keep them. This converted a lot of lessees to car owners.Less Compelling Lease OffersCar manufacturers do not really care about offering car leases as they make more money simply by selling new cars. With less inventory, they would rather sell the cars, especially since the demand is there for new car sales.Leasing incentives are at all time lows right now, and in many cases lease payments are almost as much as financing payments. With no incentive to lease, consumers would rather purchase their cars and have equity at the end of their repayments.Will car leases go down in 2023?While it’s always hard to predict exactly what will happen this year with the automotive market, it is expected that lease prices will probably stay the same this year. New car prices seem set to remain high (although hopefully they will drop off slightly over the next several months), and new car prices are one of the biggest factors of lease payments. Despite these conditions, there will always be people who want to lease their cars no matter what. The benefits far outweigh the disadvantages, even if it is not a cheaper option.Is leasing a car a good idea financially?So, is it a good idea to lease a car now? It depends a lot on your situation. If you need a new car in 2023, leasing and financing may both be expensive options. But when you need a new car, you need a new car. If 2023 is the year for a new car, make sure you take the following steps:Make sure your credit is in top shape before applying for a lease or a loan. The best rates are reserved for people with good and excellent credit scores. Credit score requirements tend to be higher with leases, so if you are looking to lease with a mediocre credit score you may have a hard time.Shop around for the best deals. Whether you are looking to lease or buy, shopping around is key. Monthly payments for both will be heavily based on the price of the car, so getting the best deal will help ensure you have reasonable monthly payments.Research lenders and lease companies. Make sure you are considering customer satisfaction ratings. There’s nothing worse than getting in a bad financial relationship that you can’t bet out of easily.Here’s how to determine whether you should lease or buy a new car in 2023. You should buy a new car if…You like owning a car: If you like the feeling of having a car that is all yours, leasing is definitely not for you. Leasing a car is essentially renting a car, and it’s never truly yours. You like customizing your car: If you are the type of person who likes customizing their car, you should definitely buy a car as opposed to leasing a car. Tinted windows, custom paint jobs, and any type of modifications are strictly prohibited when you lease. You drive a lot: If you drive a lot of miles you will most likely go over your yearly mileage allowance. Going over this allowance will result in heavy fees and make leasing a car much more expensive.You like to work on your own car: When you lease, you have to use a certified and approved mechanic and use certified manufacturer parts. If you are the type of person who wants to fix things themselves, leasing a car is not a good option.You should lease a car if…You want the latest: If you want a new car every few years, leasing is the way to go.You can abide by the limitations: Leases can have strict usage limitations, including mileage allowances. If it doesn’t bother you to play by their rules, leasing may be more beneficial.You don’t want to work on your own car: If you aren’t the type of person who enjoys working on their car on the weekend or tinkering with customizations, leasing may be an easier option.You own your own business. Leasing maximizes tax deductions and may make more sense if you are a business owner.That’s the deal with car leases in 2023.If you need a new car in 2023, it’s entirely possible to lease or finance. It’s important to take the time to research and get your credit score in good shape before you go ahead with anything.If you have a lease already, it might be a good idea to purchase your car with a lease buyout loan. Auto Approve can help connect you with the right lender so you can avoid today’s current volatile auto market and keep the car that you love.Contact Auto Approve today to get a free quote!GET A QUOTE IN 60 SECONDS
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What Would Disqualify You From a Car Loan?

01/04/2023 00:00
If you have ever applied for a car loan only to be rejected, you may feel disheartened (and maybe even a little bit confused). But all is not lost! Understanding why you were turned down can help you get approved in the future, and correcting any problems might even help you get a better car loan APR.Here’s why you might be rejected for a car loan (and what you can do to ensure it doesn’t happen again).Why was I denied a car loan?Getting denied a car loan is not uncommon. There are quite a few reasons why it may happen to you, and there are always ways to fix your situation to ensure that you can get approved for a car loan in the future.Your credit score is poor.A poor credit score is the most common reason to be denied a car loan. Credit scores are broken into the following categories:Exceptional (Super Prime): 800-850Very good (Prime): 740-799Good (Near Prime): 670-739Fair (Subprime): 580-669Very poor (Deep Subprime): 300-579 If your credit score is fair or very poor, you will most likely have a very difficult time getting approved for a car loan. A score of at least 620 is recommended to get approved for a car loan. The better your score is, the better the car loan APR you will be offered. There are auto lenders for people with poor credit scores, but they have high interest rates and tend to have more penalties and fees associated with them. There were errors in your application.It’s also relatively common to be denied for a car loan due to a simple error in your application. If you forgot to fill out a section or mistakenly answered a question, you may be denied a car loan. You have a large amount of debt.If you have a high debt to income ratio you may be denied a car loan. Lenders look at the totality of what you owe, including mortgages, student loans, credit card debt, and more. The more you owe compared to how much income you have may make you more of a risk. You don’t have a long credit history.If you do not have a long credit history, lenders may be reluctant to loan you money for a car. There simply isn’t enough information to determine whether or not you are a good candidate for a loan.What happens if you are denied a car loan?The good news is that getting denied a car loan doesn’t automatically hurt you (besides meaning that you do not have the new car you want). But if you are rejected for multiple loans that all pull hard inquiries on your credit report, that may lower your credit score slightly. Lenders are required to tell you why you were rejected for the loan. If they do not state the reason in the initial response, reach out and inquire. They have 60 days to respond (if they do not respond they will be in breach of the Equal Credit Opportunity Act.It may take some work, but in most cases you can fix whatever caused you to be rejected in the first place.What should I do if I am denied a car loan?If you are denied a car loan, there are several steps you can take to ensure you get approved the next time around. You were denied due to a poor credit score.If you were denied a car loan because you have a poor credit score, you can work to improve your credit score for the next time you apply. Your credit score is based on five different categories:Your payment history (35%): Are your payments on time and in full? Your amounts owed (30%): How much debt are you in and how does that compare to the amount of credit you have available to you? The length of credit history (15%): How long have you had your accounts open?Your credit mix (10%): Do you have a healthy mix of accounts (such as a mortgage, credit card accounts, student loans, etc)?  Your new credit (10%): Do you have new accounts where you haven’t proven your ability to repay?There are many factors that go into your credit score, so taking the time to review your credit report will give you a good sense of what areas you can improve in. Improving your credit payment history is the most effective thing you can do to increase your score as it has the largest weight for your credit score. You can improve this category by committing to making full and on time payments to all of your accounts. Signing up for autopay is one great way to ensure you don’t miss a payment. But there are lots of other steps you can take to improve your credit score and give you a better chance at getting approved for a car loan:Review your credit report for errors or mistakes.Request higher credit limits on your accounts. This will decrease your credit utilization ratio and improve your score.Pay down accounts that have high credit utilization ratios (the ratio of debt you are in compared to available credit).Catch up on any past due accounts. Consider contacting a credit counselor if this feels too overwhelming. They can design a debt repayment plan that will work for your budget.Limit applying for new accounts. These can trigger hard inquiries which can lower your score.Building your credit score takes time, but it is definitely worth it. Having a good credit score will help you get approved for loans, get better interest rates, and help you get better insurance rates.You were denied because of an error in your application.Most of the time you can simply apply again, but be sure to double check that everything is correct the second time around.You were denied because you have a large amount of debt.If you have a large amount of debt you should definitely prioritize paying some off before you put yourself in even more debt. There are several ways to achieve this depending on your circumstances.You can use the avalanche method, which involves paying off your debts by order of interest rates. By paying off your highest interest rate debts first, you will help save yourself further costs in interest. This is one of the most popular (and quickest) ways to pay off debt.You can use the snowball method, which involves paying off your debts by size, starting with the smallest amount first. This is great for your morale and can keep you motivated to pay off your debts.But whatever method you use should start with a solid budget. Creating a budget is the best way to organize your finances and can help show you where you can cut costs and save money. Contacting a debt consolidation service can also help you to get organized and keep on top of your payments.You were denied because you don’t have a long credit history.This is a tricky one. There is no quick fix to getting approved if you do not have a long credit history. It can take you several years to build up your credit score. Getting a credit builder loan is a great step to take when getting started. Credit builder loans deposit money in a savings account, and once you pay off the balance the money is released to you. Your payments get reported to the credit bureaus and can give your credit score a good raise so long as you make full payments.Secured cards are another way to help build credit. These cards require you to deposit money in order to open an account. This is referred to as your security deposit. Paying the minimums on these accounts can help you establish credit.You can also consider applying for a car loan with a cosigner. When you apply with a cosigner they will take both of your credit histories into account. If your cosigner has a good score you will have a much better chance of being approved for a loan. Additionally, making payments on your new car loan will help you build credit. A cosigned loan is in your name and you are responsible for payments, but your cosigner will be responsible if you default.You can also apply for a joint loan, where you and your counterpart will share equal responsibility for the loan. Lenders will again consider both of your credit scores and histories when determining eligibility. Making payments will help you to build your credit, and you can finally get the car you’ve been wanting.While getting rejected for a car loan can be disheartening, there are ways to make sure it doesn’t happen again.If you already have a car loan but are looking to refinance, Auto Approve can help! Get your free quote today to find out how much you could be saving!GET A QUOTE IN 60 SECONDS
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Will 2023 Be Better to Buy a Car?

12/30/2022 00:00
The past few years have been, well, challenging, when it comes to buying a new car. If you’ve been holding off and waiting for things to level off economically, 2023 might not bring what you are hoping for. But with some preparation and personal considerations buying a new car in 2023 is not impossible. Here’s what you should know about buying a new car in 2023.Why are auto loans increasing?Auto loans are continuing to climb for two main reasons: increased interest rates and increased car prices. Over the course of 2022 car loans have increased by 8.59% according to Experian. And this trend is expected to continue over the next several months.Supply shortages led to an increased demand in cars during the pandemic, and we are still feeling the ripple effects of this. Semiconductors, raw materials, and other shortages meant that manufacturing was incredibly delayed in 2020, 2021, and even 2022. Increased demand leads to increased prices, which is one reason auto loans are significantly higher than they have been in the past.High prices coupled with high interest rates from the Fed’s increasing prime rates have made getting a new car more expensive than ever. So what can we expect in the upcoming year?How will the car market be in 2023?It’s always impossible to predict exactly what the market will look like in the next year. The car market is highly dependent on a number of factors, all of which will contribute to the affordability and accessibility of new cars in 2023. There might still be supply chain issues.One of the major contributors to the heated car market of the past two years was a semiconductor shortage that jammed the brakes on new car production. It’s not exactly clear how long this shortage will continue for, but experts expect it to continue into the summer. There is hope that the shortage will be solved by the third quarter, but there are no guarantees.New car prices will most likely stay the same.While we would all hope that the price of new cars would come down drastically in 2023, that doesn’t appear to be the case. Dealerships are keeping less inventory on their lots, which is in part a strategy to keep prices high. They are no longer offering incentives as they used to, and that will continue to be the new norm. Manufacturer incentives right now make up about 2% of a new car price, compared to 11% back in 2020 according to Kelley Blue Book. Dealers and manufacturers want to continue this trend as it means more profits. This results in less vehicle affordability for the rest of us.Car loan rates may still be high.As we are still battling our way out of inflation, interest rates will remain high throughout 2023. These increased rates have made financing more difficult for many people and has put new car ownership out of reach. Unfortunately this will continue throughout 2023.Will next year be a good time to buy a car?It’s safe to say that 2023 is not going to be the ideal year to buy a new car. But that doesn’t mean it is impossible, and it doesn’t mean you will get a bad deal. But it does mean you may need to work a bit for it and be a bit more cautious.Think about your job and income.While things seem to be improving economically, there is no guarantee for what 2023 will bring. Much is still up in the air and it is possible we will end up in a recession. If you feel like your job is not particularly stable or that your hours might be cut, it’s probably not a good idea to buy a car.Get your credit score in shape.Car loan APRs are not going to decrease drastically in 2023, so it’s more important than ever to make sure your credit score is in good shape. Ensure you are making full and on time payments, request higher credit limits, and review your credit report for errors to get your score as high as possible. If your score is low, you will have a difficult time finding a reasonable car loan APR.Consider EV over gas.Electric cars are becoming more and more popular, and more and more manufacturers are prioritizing them. Many of the concerns that used to linger over purchasing an electric car don’t apply anymore. An increased demand for electric cars means that there are more charging stations, and increased ownership means wider availability of replacement parts. Buying an electric car will still cost you more upfront, but the savings in gas over the years will easily make the investment worth it (electric cars consume an average of $1,000 in electricity per year, while gas powered cars consume about $5,000 in gas per year).Buyout your lease instead.If you have been leasing a car for the past few years, it may make more sense to buy your leased car rather than getting a new one. Lease buyouts are conducted using your leased car’s residual value, which is the value it is expected to have at the end of the lease period. This number is predetermined before your lease begins and is non negotiable. This means that if your car’s residual value is lower than your car’s market value, you can buy your car at a steal. Used car values are still inflated due to supply chain issues, so chances are your residual value is less than the estimated market value. Even if you do not like your leased car and want to sell your car, you can keep the profit. Securing a car lease buyout loan can help make this happen.That’s what to expect when buying a new car in 2023.While we can be hopeful that the new year will bring good changes, it’s hard to predict exactly what will happen in the coming months. If you really need to buy a new car in 2023, make sure you do your research and prepare your finances as much as possible. This will give you the best chance to get a reasonable car loan rate.If you are interested in buying out your lease or looking to refinance your existing loan, we can help! Auto Approve can help connect you with lenders and get you the best rates possible on your auto loan, even in uncertain times. Don’t wait, contact Auto Approve today to see how much we can save you!GET A QUOTE IN 60 SECONDS
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*APR and Fees Disclosure: Auto Approve works to find you the best Annual Percentage Rate (APR), which is based on factors like your credit history, vehicle and desired payment terms. Fees to complete your loan refinance vary by state and lender; they generally include admin fees, doc fees, DMV and title. Advertised 6.24% APR based on: 2019 model year or newer vehicle, 730 minimum FICO credit score, and loan term up to 72 months. All loans subject to credit and lender approval.
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