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Ten Things You Need to Know Before Buying a Car

12/16/2021 23:00
Bringing home a car can be overwhelming. What kind of car should you get? What make and model? What color, trim level, and transmission? New or used? Should you lease or buy? And these decisions are just the beginning.On top of the choices you will need to make on the actual car, you will also have to decide how you will pay for your new ride. Will you buy it outright, or do you need to secure financing? Car dealers know how stressful this can be, and they are prepared to take advantage of you and pressure you into making decisions on the spot. But being prepared can make all the difference. If you do your research and shop around a bit, you will be less likely to make an impulsive decision. Here are the 10 things you need to know before you buy your next car#1 – What you wantIt's important to know exactly what you want before you ever step foot in a dealership. Think carefully about what make and model you want. What is your budget? There are many resources out there to help you decide what car is right for you. Publications like Consumer Reports and Car and Driver routinely rate and review cars to give you an impartial idea of what car might be best suited for your needs.Are you a commuter who needs good gas mileage? Do you have a large family and need something safe and reliable? These resources can help you decide what makes the most sense for you.Depending on which vehicle you select, you may have options of transmission, trim level, and color. Look around and see what you like most, keeping in mind that certain add-ons come with a price tag.#2 – Details about the car you've pickedOnce you’ve narrowed down what you are interested in, do your research. Do you know anyone who has that car? Talk to them and get their opinion. Go on YouTube and find video reviews of the car you are interested in. You can even take a virtual test drive on YouTube to get an idea of how the car drives. Look at J.D. and Associates and Consumer Reports to see how reliable the vehicle is and what types of repairs are common. This will help you be confident that you are making a good decision.If you are looking at used cars, be sure to research the actual car you are interested in. Getting a CarFax report is a great idea. A CarFax report will list how many owners the car has had, the mileage, and list any accidents the car might have been involved in. Just because a car is being sold at a reputable dealership, it doesn’t mean the car is problem free. #3 – What it should costOnce you decide what you want, it’s time to shop around. Compare prices. Start with Kelley Blue Book or Edmunds to get a good sense of what a fair price will be. Use the car value tool to find out what the MSRP is and get a range of what dealer prices might look like. Having a range of numbers will help you negotiate when you go into dealerships.#4 – How you will pay for itBefore you set foot in the dealership, you should have a plan for how you want to pay for your new car. Do you have the capital to buy it outright in cash? This is always a good negotiating tactic that can reduce your price tag. If that’s not an option, decide how much you can put as a down payment. Experts recommend putting down 20%. Making a down payment will increase your chance of getting approved and can even secure a better APR.Getting pre-approved for financing may help strengthen your negotiating position. A pre-approval means that a lender has looked at your credit report and history and has given you a preliminary APR. This transforms you into a “cash buyer”, which is good for several reasons. First of all, the salesmen can’t try to inflate your monthly payment with unnecessary fees. You have already secured financing that they can either accept or try to beat. This protects you from dealer markups on APR as well, which is very common. Essentially, being a cash buyer makes you a more serious customer. Pre-approval also gives you an excuse to not fall for any last minute dealer add-ons and extended warranties. You can simply say that you are approved for a certain amount and cannot go over that. Take note that getting pre-approved will cause a hard pull on your credit score, so only do this if you are 100% serious about moving forward and purchasing a car.#5 – Your credit score and historyIf you will be financing your car, your credit score and history are incredibly important. Obtain a copy of your credit report before you even set foot in a dealership so that you know what type of loan candidate you are. Your credit score is the most important factor in your APR and approval chances, so you want to be sure your credit is in good shape.When you obtain your credit report (you can get your report for free three times per year, once from each major credit agency), thoroughly review it. Look for any inaccuracies and if you find anything that is incorrect, report it to the agency immediately. If your credit score is looking a little weak, you may be smart to hold off for a few months on getting a new car and focus on improving your score. Wait for any new credit inquiries to fall off of your report and make sure your payments are on time to get your score higher.If you already have a vehicle loan, refinancing your loan may be a good move to reduce your APR and monthly payments. This can increase your credit score in the long term if you are able to make more consistent on-time payments. If refinancing sounds like a good idea, Auto Approve can help you get started with a free quote today.#6 – What paperwork to bringNow that you have done your research, you are ready to visit the dealership. Go prepared with the documents you need. Look around online and select a reputable dealership that has what you want but also has high customer satisfaction ratings.Be sure to bring the following:Financial Documents. If you got preapproved for any loans, be sure to bring that paperwork. You will also need your proof of income and financial history, which may include pay stubs and banking information. Proof of residency.Your current vehicle’s information, including the title. This is only necessary if you are interested in trading your car in. Information on the vehicle you want. Bring all of your research on the car you are looking at. Include prices from other dealerships and any other deals or incentives others are offering; this can be valuable in negotiating.If you come to the dealership prepared and organized, it will show the dealers that you are serious and well researched, which can make them take you more seriously.#7 – How the car drivesDo a test drive. It’s always a good idea to take your potential purchase out on the road. Be sure there are no rattles or squeaks that may make you nervous when you drive off the lot. This is especially important if it’s a used car. Bring along a friend or family member who is familiar with cars if you don’t know what to look for. #8 – The value of your trade-inIf you are looking to trade in your current car, know how much your car is worth. Go to Kelley Blue Book and Edmunds to look up a fair price. Kelley Blue Book has an Instant Cash Offer feature that will immediately give you a sense of what your car is worth. If the dealer tries to low ball you, decide whether or not selling your car on your own is an option. It might be a bit more work but sometimes the trade off is more than worth it. #9 – Your rights as a consumerBefore signing any papers, make sure you understand the warranty and return policies on the car. Research if your state has any lemon laws that can protect you if the car is defective.#10 – Know that you shouldn't settle (and how to say "no")It’s important to remember that you always have options and you should never settle. Buying a car is a huge decision, and aside from buying a house, it is one of the biggest financial decisions you will make. Be sure that the car you are getting is exactly what you want, and if it’s not, don’t be afraid to walk away. And those are the top ten things you should know before buying a car.The more prepared you are, the better off you will be when buying a car. And that usually translates to getting a better vehicle for you, while saving more of your hard-earned money.If saving money sounds good to you but you’ve already purchased a new car, Auto Approve can help! By refinancing your auto loan, we can reduce your APR and lower your monthly payments.GET A QUOTE IN 60 SECONDS
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Should You Consider Paying Cash For A Car?

12/14/2021 23:00
When the time comes to buy a new car, you may be wondering whether paying cash is the best option.Buying a vehicle with cash can certainly mean less of a hassle (and a lot less paperwork)! Plus, you’ll save all that money on interest right? But even if you have the cash in hand, it is still worth considering vehicle financing. Before you make a decision, let's discuss the positives and negatives of purchasing you next car with cash.The pros and cons of buying a car with cashWhen it comes to buying a car, there are several advantages to paying with cash and avoiding financing.Here are the pros:You will save on interest.The biggest upside of buying a car with cash is the money you will save on interest payments. If you are purchasing a $20,000 car with $4,000 down and an available APR of 5% over 48 months, you will ultimately save close to $1,700 in interest. This is a great reason to consider buying a car with cash if you are able. You will avoid overspending.If you know that you only have $20,000 to spend on a car, you will not be tempted to overspend on trim levels or other add-on features. These added features can add up quickly and, before you even realize, you're over budget. Let’s use the above example again. You are planning to finance $16,000 of your $20,000 car, but the dealership offers you some upgrades. A better sound system, all weather mats, and blindspot protection are going to up your bill by $3,000. Now you are on the hook for financing $19,000 instead of $16,000. Instead of paying an extra $1700 in interest, you are paying an extra $2000 in interest, plus the extra $3000 in add-ons that weren’t in your budget. It’s easy to see how your budget can get away from you when increasing your financing is simple to do.You will own the car outright.Owning your car outright is another major reason to consider paying cash. You will have an asset that you can sell or use as collateral if need be. You also have the option to reduce your insurance coverage, as you will not be bound to a certain protection level. This can save you even more money.You will never be upside down on your loan.A major risk of auto financing is becoming upside down in your loan, which is when your Loan-to-Value is over 100% – that is, you owe more on your car than the car is worth. Since cars depreciate in value incredibly fast (new cars typically depreciate 25% in their first year), becoming upside down in a car loan is not uncommon. If you're able to pay cash, you won't have to worry about this happening.You won’t have to worry about a monthly payment. If you already feel like you have too many monthly bills to keep track of, buying a car outright will ensure you don't add another bill to the pile. Sometimes having one less thing to worry about can make all the difference!However, despite these advantages, there are, of course, times when paying for a car in cash will not be the best option for you.Here are the cons of buying a car in cash:You might deplete your savings.If paying cash for your car will completely destroy your savings, it’s probably not a good idea. Financial experts always recommend keeping an emergency fund to account for unexpected expenses. If something unexpected comes up and you are forced to take out a short term loan or max out your credit card, that can be very harmful to your financial wellbeing. Only pay cash if you are in a good position to do so and it will not wipe out your savings.You won’t build credit.A great way to build your credit is to take out a loan and make consistent on time payments. If you pay cash, you won't get any benefit from the purchase on your credit report. Even if you have the cash in hand, it might be better to take out a loan and comfortably make your payments to increase your credit score. This can be beneficial for any long term goals you might have, like buying a house.You may limit your options.While sticking to a strict budget is good because you won’t be able to overspend, the flip side to that benefit is that it limits your options. If you're going to buy a new car, don’t you want it to be exactly what you want? If you finance your vehicle, you may be able to expand your budget to cover the exact make, model and trim level of the car that you want. Plus, you can get any add-ons that you might find particularly useful.You might save more with special financing and rebates.Sometimes dealerships will offer special low financing and cash back or rebate offers when you finance through them. In certain instances, the amount you save by not paying interest may be outweighed by the money you will make by taking advantage of the rebate, or at least even things out. This will typically only happen if you have excellent credit. In this case, do the math and see which option will save you more money.You might miss out on investment opportunities.If interest rates are very low, it sometimes makes sense to take advantage of them. This frees up the cash you do have for other investments or improvements on your house. If you were to take out a personal loan later on to pay for something, it would most likely be at a higher rate. Taking advantage of low APRs is often a good long term plan if you consider your finances altogether in one portfolio.If increasing your credit score is high on your priority list, then financing your vehicle is probably a good idea for you. And if you already own a car and are looking to bump your credit score? Consider refinancing with Auto Approve. Refinancing can help you save money while also improving your credit over time.And those are the pros and cons of paying cash for your new car.As you can see, the right way to purchase a vehicle will vary greatly from person to person and situation to situation. As always, it’s important to do the math and see what makes sense, as well as take stock of what your priorities are. Because of the advantages to financing, we tend to think that the best thing to do, if you have the financial flexibility to pay in all cash, is to put down a sizable downpayment to ensure you get a great low rate while also keeping a good chunk of your cash for other investments and emergencies.And, if the dealer offers you a rate you're unhappy with, you can always refinance your loan with Auto Approve to pay even less in interest, over time, or both.We work tirelessly to find our customers the best rates out there and secure the best terms for them. Refinancing to a lower APR can save you thousands of dollars, and it takes only a few minutes to get started.GET A QUOTE IN 60 SECONDS
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Top 4 Ways to Get a Lower Monthly Car Payment

12/13/2021 23:00
When money is tight or you're hoping to make a big purchase, every penny counts. Whether you're trying to save up for something big, looking to put more money where it matters, or cutting back in leaner times, lowering your expenses can help.That means, when you're going through your budget, you may want to figure out where you can save a few dollars. For many people, a car payment is one of the heftier bills they pay each month. If that's the case for you, lowering your car payment could be the answer to your financial challenges.Whether you need a temporary fix or a long term solution, there are tons of great options out there to secure a lower monthly car payment.Here are the four best ways to get a lower monthly car payment1. Talk to your lenderLenders are in the business of making money, and they can only make money when you make your payments. You may be surprised that many lenders are willing to work with people to help them manage their payments more effectively.They may allow you to skip a payment or lower your payments temporarily. Keep in mind that interest will still accrue during this time, but it is always better to defer and have this accumulate than to have missed payments, late fees, and the negative credit impacts that will occur without deferment.That said, not all lenders are magnanimous, and they'll rarely want to cut a deal that doesn't benefit them in the end, so while you may be able to skip a payment or lower your monthly cost, you may end up paying more interest in the long run if you go this route.2. Refinance your carRefinancing can lower your monthly car payments in a number of ways and might be your best option to effectively and sustainably reduce your monthly payments. Since refinancing benefits both you and your new lender, it's a win-win – they don't need to make more money than your current lender, so you're more likely to get a deal that'll cost you less overall. Here's how.You can get a lower interest rateOne of the main benefits of refinancing is securing a lower APR. There are several reasons you might be able to get a better interest rate this time around.You didn’t get a good deal on your original loan. If you went in to look for a car and got talked into dealership financing, there's a good chance you got stuck with a higher-than-average APR. If this sounds familiar, refinancing might lower your APR significantly and cut your payments drastically.Interest rates in general have dropped. Interest rates fluctuate based on how the economy is performing. If you bought your car while rates were high, there’s a good chance you are eligible for a lower APR if you refinance.Your credit score has improved. If your credit has improved since you first bought your car, you are probably eligible for a much lower rate. Your credit score is the most important item in your application, and an improvement in credit can yield a drastically better interest rate.You can lengthen your repayment periodEven if you are not eligible for a lower interest rate, refinancing can still reduce your monthly payments by changing your repayment schedule. If you lengthen your repayment period (for example from 36 months to 48 months) your balance will be paid over a longer period of time and your payments will be lower. Keep in mind you will be paying more interest overall, as you will pay interest for 48 months instead of 36 months, but it will drastically reduce your monthly payments.You can add a co-borrowerWhen you refinance, you can add a co-signer to your loan and possibly reduce your interest rate and secure better terms. If your co-borrower has good credit, they will be eligible for a better interest rate. If refinancing sounds like a good option for you, Auto Approve can streamline this process and help you start saving money today. We work as your advocates to get you the best rates possible.Why Auto Approve? Click here to find out.3. Sell Your CarIf you need a more permanent solution than talking with your lender will provide, and refinancing isn’t an option, you might need to consider a new set of wheels. You can either trade in your car to a dealership or sell the car on your own.Almost all dealerships will accept trade-ins and can put you in a car that will have lower monthly payments. Make sure you talk to the dealership and are upfront about what you can and cannot afford. You can also choose to sell the car privately. This is a bit more work than going to a dealership, but you will probably get more money for your car. If you want to sell your car on your own, be sure to clean your car very well, get good pictures, and make sure maintenance records are up to date. You want to make your car as attractive as possible to increase the amount of money you can make.Whether you sell to a dealership or to a private buyer, be sure to know two things before starting this process:How much you owe. Know how much money is left on your loan balance, and how much you need to sell the car for in order to break even.How much your car is worth. Go to Kelley Blue Book or Edmunds to look up the value of your car. It might be worth more than you think and you don’t want to lose out on money that could be yours.4. Lease a Car InsteadIf you have sold your car but still need to get around, getting a lease instead of purchasing a new car might be a good option. Leases are generally cheaper than buying a new car, as you are only paying for the depreciation that accrues during your use. There are three main leases you can pursue:New Car Lease – This is the most common type of lease and is widely available. You typically need pretty good credit and a down payment to secure a new car lease.Used Car Lease – These are not as common as new leases but they are out there if you do your research. The APR might be a bit higher, but since the car is not worth as much you might have lower payments than if you got a new car lease.Lease Takeover – This occurs when someone wants to get out of their existing lease for one reason or another. Websites like LeaseTrader.com and SwapALease.com provide a space for you to shop around for a lease takeover. Some people who are desperate to get out of their existing leases may even offer cash incentives, making this a good option if money is particularly tight. You will still need to go through an application and credit check, but you can probably secure a nicer car for a lower rate than if you were to get a new car lease.And those are our top tips for lowering your monthly car payment!In times of economic uncertainty, budgeting and saving money is incredibly important. If you are struggling to make ends meet every month, consider one of the options above.And if refinancing seems like the right option for you, or you want to find out just how much refinancing could lower your monthly payment, Auto Approve is here for you. All it takes is a few clicks and to get a quote and get on your way to more money in your pocket and less on your vehicle payments.GET A QUOTE IN 60 SECONDS
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Car Down Payments and How They Affect Your Financing

12/11/2021 23:00
When you decide the time is right to buy a car, you are bound to ask yourself how much of a down payment you should make, or if you should make a down payment at all. The numbers can be confusing – is it better to keep the cash and have higher monthly payments, or should you make a higher down payment and reduce your monthly payments?In this article, we'll discuss what down payments are, how they affect your financing options, and how to decide what’s right for you. Let's take a look.Everything you need to know about down paymentsHow do down payments work on cars?A down payment is money you pay upfront for the car you are buying. It is essentially your first payment on your new car. Most of the time, lenders require down payments, but even if it is not a requirement, it might be a good idea.How much should I put as a down payment on a car?Experts agree that on a new car you should put down at least 20% of the car’s purchase price. If you don’t have the best credit, increasing this might give you better chances of scoring better terms. If you are purchasing a used car, experts recommend a 10% down payment. Since used car loan rates are usually higher than new car rates, a higher down payment will save you more money with a used car.Does a large car down payment offset bad credit?Yes and no. A larger down payment will certainly make you a more desirable candidate, but lenders will always look at your credit score when deciding whether or not to finance your car. Ultimately you want to stay on top of your credit and work to improve your score. A great way to improve your credit score is to refinance any existing car loans you may have. Refinancing to a lower APR can make your payments more manageable and improve your score quickly. A quote from Auto Approve takes only a few moments and can help you decide if refinancing is a good option for you.What are the benefits of putting a down payment on a car?There are many benefits to putting a down payment on a car. Not only is it required in most cases, but it will most likely save you money in the long term.You will pay less interest and your monthly payments will be lowerMaking a down payment will lower the balance of your loan overall, and in turn save you money on interest. Let’s look at the following example. You would like to buy a new car with a purchase price of $25,000 and you choose to not make a down payment. You have an APR of 5% and a sales tax of 6%, and you have decided on a 48 month payment period. Total Loan= Purchase Price + Sales TaxTotal Loan= $25,000 + .06 x $25,000Total Loan= $26,500Over the life of the loan, you will pay $2793 in interest on this balance of $26,500, ultimately paying a total of $29,293 on your $25,000 car. Your monthly payments will be about $610 per month.Now let’s look at what happens when you put a 20% down payment on a car. Total Loan= Purchase Price + Sales Tax - Down PaymentTotal Loan= $25,000 + .06 x $25,000 - $5,000Total Loan= $21,500Over the life of the loan, you will pay $2266 in interest on this balance of $21,500, ultimately paying a total of $23,766. Your monthly payments will be about $495.Now let’s compare. In the first scenario, you are paying a total of $29,293 for your car. In the second scenario, you are paying $23,766 plus your $5,000 down payment, for a total of $28,766. By paying a down payment, you are saving $527. Over the course of four years, it is doubtful that any easy investment you can make of $5,000 will yield a profit of $527, so a down payment is certainly the better option. Plus, your monthly payments will be lower so it will be a more manageable monthly payment over four years.The approval process might be easierHaving the capital available to you to make a down payment is a good indication to lenders. It shows that you are in good enough financial standing to make a significant upfront payment and can lead to a better interest rate and better terms.It might qualify you for special incentivesDealerships often run promotions to encourage sales, and down payments are often conditions of these promotions. These incentives might include low APRs or rebate programs. Always be sure to read the fine print of these deals.It can offset depreciationOffsetting depreciation is another important reason to make a down payment. Cars tend to lose 15% of their value per year, but new cars depreciate even faster, losing about 25% of their value in the first year. If you do not make a down payment, you might risk being upside down in your loan. This means that you owe more on the car than the car is worth. This is never a situation that you want to end up in, so it is important to stay ahead of depreciation. If you are ever in a bind, this means that you will not be able to break even if you sell your car and pay off the loan. Making a down payment will get you ahead of depreciation quickly, especially the first year’s drastic depreciation.How do you save for a down payment?Now that we know how important down payments are, how can you save enough to make one?Make a budgetThis is one of the most important things you can do for your financial health. Determine all of your income and all of your expenses, and see how the numbers fall. Set a goalCreating a down payment goal will help you stay focused with your new budget. If your dream car is $30,000, you know that you should aim for a $6,000 down payment. It is important that you never sacrifice an emergency fund for your down payment. If something catastrophic comes up and you don’t have a buffer, it will have a ripple effect through your entire financial life. Make sure you keep a separate rainy day fund in addition to your down payment goal.Cut spending where you canNow that you have the numbers in front of you, you can see the areas where you may be overspending. Cutting things here and there will add up over time and result in big savings.If you have an existing auto loan, refinancing is a great way to reduce your monthly payments and free up money in your budget. Refinancing to a lower rate can save you hundreds of dollars a month – and Auto Approve can help you get the ball rolling and start saving today.Keep focused on your goalStaying on track with your budget is important if you are serious about saving for a down payment. For more information on creating a budget, you can read our guide on budgeting or pick up one of these books on personal finance.What if you can’t make a down payment?If making a down payment just isn't in the cards for you, hope is not lost. If you have a good credit score you can still get approved and get a decent APR, but it will probably not be as good as if you did have a down payment. You should shop around for loans ahead of car shopping to see what types of deals you can get without a down payment. What about the advertisements for a zero down deal?You will sometimes see advertisements for financing with zero down payment required. This is not necessarily a bad idea, but if you do not have good credit be prepared for less than ideal terms. This may lead to high interest rates and can cause you to become upside down in your loan. Be sure to read all the fine print and know what you are getting into before you sign on the dotted line.That’s everything you need to know about down payments and why they are so important.The bottom line is a down payment will usually help you save money in the long term and protect you from depreciation. If you are able to save for a down payment, it will help you secure better rates as well. If you have an existing auto loan, be sure to check on your rate and terms. You could be overpaying by hundreds of dollars every month. If that’s the case, Auto Approve is here to help you secure a better rate. We love saving people money, and it could be just what you need to save for that down payment.GET A QUOTE IN 60 SECONDS
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Top 5 Best Personal Finance Books

12/09/2021 23:00
Unless you took some business courses in college, you probably don’t have a deep understanding of financing. Public high schools for the most part do not cover personal finance, and if they do it is usually not in-depth or comprehensive. There are countless websites, articles, and podcasts that aim to guide people through the complicated world of personal finance, but sometimes it feels like there is too much advice. It can be overwhelming to know where to start when there is so much content. That’s why we’ve gathered our top five books for personal finance and picked out some of our favorite bits of wisdom. Here are our top five books for personal finance.Financial Freedom: A Proven Path to All the Money You Will Ever Need by Grant SabatierWho’s it for: Millennials looking to get ahead. Why we like it: It teaches you to think more deeply about your spending choices.Grant Sabatier, the “Millennial Millionaire”, chronicles his five year journey from broke to millionaire. Here the author shares his strategies and advice for becoming financially independent. Sabatier stresses the importance of being thoughtful about your purchases and considering the long term costs of purchases. Being diligent with your budget and recordkeeping is of the utmost importance. Below are our top three takeaways from his book:Consider the total cost of a purchase. Your cost goes beyond the immediate ten dollars that you pay for an item on impulse. If you instead invested that ten dollars in a 401K or in the stock market, that money would be worth more than ten dollars in the long term. Sabatier is adamant that you must think about this cost, and think about the amount of time and work that goes into what you earn to pay for that.Check your finances daily. This will encourage you to stay on track and warn you if you are falling away from your financial goals. While many experts advise against checking your investments daily as it may cause you to be too anxious and make hasty decisions, Sabatier maintains that this is good practice to keep you focused.Get out there and side hustle. Sabatier worked a full time job while working up to forty hours outside of his job. He did projects that he liked, such as web design, to make extra money to invest. He stresses that when you work for someone else, your earning potential is limited, but when you work for yourself, your earning potential is endless.The Total Money Makeover: A Proven Plan for Financial Fitness by Dave RamseyWho’s it for: People struggling with debt.Why we like it: It is a practical approach to tackling debt and living within your means.Ramsey’s book has been a staple of the personal finance genre for almost twenty years, and for good reason. This book has helped millions of people get out of debt and get into good budgeting habits. By starting slow with small changes here and there, Ramsey shows how you can slowly but drastically change your approach to money. This book is built around Ramsey’s “Seven Baby Steps” to financial freedom, outlined below.Save $1,000 for your starter emergency fund. Everyone should have a rainy day fund for emergencies and unexpected costs. Start small in the beginning and work to increase it.Pay off all debt (except the house) using the debt snowball. This snowball system involves listing all of your debts from largest to smallest, and paying the minimums on everything except the smallest debt. Working from smallest to largest, work on paying off all your debts.Save 3–6 months of expenses in a fully funded emergency fund. As time goes on, add to your starter emergency fund so that you are more capable of handling a catastrophic emergency.Invest 15% of your household income in retirement. Starting to save for retirement is a huge step in financial independence.Save for your children’s college fund. Set your kids up for success if you are able to do so. Unburdening them (or lessening the burden at least) of student debt will help them tremendously in the future.Pay off your home early. When other debts are paid off, paying off your mortgage is a huge step towards financial independence. Also, you can save a great deal of money in interest if you cut a few years off of your mortgage. Build wealth and give. When you are in a comfortable position, continue saving but be charitable and give back.The Psychology of Money: Timeless lessons on wealth, greed, and happiness by Morgan HouselWho’s it for: People who tend to overspend.Why we like it: It forces you to examine the psychology of your money decisions and changes the way you think about finances.The Psychology of Money takes a whole new approach to the subject of personal finance. While finance is typically thought of as a math and data driven field, Housel examines finances from a psychological point of view, examining why people make the money choices they do. By examining why people make financial choices, he gives tips on how to avoid common pitfalls of overspending. While there were many great takeaways from Housel’s book, here are our top three:Define when enough is enough. As humans, it is our nature to always want and strive for more, but it is important to decide what your actual goals are. At some point, we must stop comparing ourselves to others and stop moving our financial goalposts.Be reasonable with your finances, not rational. Again, we are human. We do not make decisions based on spreadsheets and flowcharts, we make decisions when we are out and about. You cannot realistically aim for perfection with your finances, so try to be as reasonable as you can in your circumstances.Always leave room for error or disaster. If things can go wrong, they probably will at some point. Always have an emergency fund and try to give yourself buffers in your budget.Raising Financially Fit Kids by Joline GodfreyWho’s it for: Parents with kids of all ages.Why we like it: It discusses financial stability while also emphasizing the importance of family building, charitable deeds, and civic duty.Teaching your kids to be fiscally responsible is a daunting but incredibly important part of parenting. No parent wants to see their child struggle with finances, so it is necessary to teach them good habits and tips early on. This book is strategically broken down by age groups, from young children up to 20-somethings, so that you can teach kids of any age how to be more financially responsible. Godfrey includes tons of age-specific activities for parents of all income levels. This book focuses primarily on three major themes:Financial education is about more than money. It is also about building stable, financially literate families who can go out and make their own dreams come true.Financial stability is about living within your means. It is not necessarily about amassing more and more wealth, but amassing skills and living comfortably while doing so.Giving wisely is a global citizen’s responsibility. Godfrey stresses the importance of charity when you are in a comfortable financial situation. The Intelligent Investor by Benjamin GrahamWho it’s for: People looking to up their investment game.Why we like it: It is a classic book with lots of timeless advice, but it has also been updated to stay relevant for today’s investor.Graham’s book has been considered a financial bible since its initial publication in 1949. Since then, it has been updated to reflect today’s current economic conditions and markets. Graham’s top investing principles have guided businessmen such as Warren Buffet, who considers Graham to be his teacher in investing. Here we have summarized his top investing principles:Always invest with a margin of safety. The margin of safety refers to buying stocks at a significant discount to its intrinsic value, which provides the opportunity for high-returns as well as minimizing risk.Expect volatility and profit from it. Investing is inherently risky and volatile, but that shouldn’t scare you off. You should instead embrace this characteristic. Smart investors see market downturns as opportunities to find good investments. Graham stresses that you should not let market turns dictate the value of a company. You should instead form your own valuation of a company’s worth and let that guide you through your investment decisions.Know what kind of investor you are. Are you an active investor or a passive investor? You must decide if you want to be the type of investor who is very active in research and hands-on in day to day decisions, or if you want to be a passive investor who owns a wide portfolio as a way to minimize risk. You can make money in either capacity, but you need to know which one you are.And those are our top five personal finance books.We hope you find these tips for personal finance useful and encourage you to pick up these books if any piqued your interest.  And when you are ready to make some smart financial moves of your own, consider refinancing your vehicle with Auto Approve. Refinancing can save you loads of money and couldn’t be easier with Auto Approve’s streamlined process. You can get started right now.GET A QUOTE IN 60 SECONDS
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Hard vs. Soft Credit Inquiries: How They Affect Your FICO® Score

12/05/2021 23:00
If you’ve applied for credit in the past, you've probably heard the terms "hard inquiry" or "hard pull." But what exactly is a hard inquiry, and how does it affect your credit score?The difference between hard and soft credit inquiries and how they can affect your FICO® Credit ScoreFirst things first, what’s a credit score?A credit score is a three digit number that tells lenders how likely a candidate is to repay borrowed money. The number ranges between 350 and 850 and is calculated based on the following factors:Payment History. This accounts for 35% of your credit score. This shows lenders if you pay your credit accounts on time or not. It will also show missed payments and bankruptcy details.Accounts Owed. This accounts for 30% of your credit score. This refers to the amount of money you owe. This number is considered in relation to how much credit you have available to you (your credit utilization ratio). The lower your debt to credit ratio is, the higher your score will be.Length of Credit History. This accounts for 15% of your credit score. The longer you have had credit, the higher your score will be.Credit Mix. This accounts for 10% of your credit score. You will need a good mix of retail accounts such as credit cards, loans, and mortgages for a good score.New Credit. This accounts to 10% of your credit score. If you open a bunch of new accounts, you will be flagged for a lower score.Is a FICO® score the same as a credit score?FICO is essentially a brand of credit score. FICO is a software analytics company that produces the most widely used software for calculating credit scores. Almost 90% of credit decisions are made using FICO scores. So ultimately yes, your FICO score is your credit score. What’s the difference between a soft inquiry and a hard inquiry?A soft inquiry, also called a soft pull, is a preliminary credit check. These credit checks are unrelated to direct lending decisions. These pulls can be done with or without a consumer’s consent. Some examples of soft inquiries include:A consumer checking their own credit score.A credit card company looking to pre-approve applicants.A background check performed by a potential employer.An insurance company looking to pre-approve quotes.Soft inquiries do not affect credit scores at all, they only provide preliminary information for those inquiring.A hard inquiry, also called a hard pull, is a formal credit check. Hard inquiries are done when consumers are actively seeking new lines of credit. These credit checks usually need to be authorized by the consumer. Lenders will make hard inquiries when you are:Applying for a mortgage.Applying for a car loan.Applying for a new credit card.Applying for a new apartment.Applying for a credit limit increase.Some utility companies will also perform hard or soft inquiries. If you are unsure what a pull will be classified as, be sure to ask these companies when you reach out to open these accounts.How do hard inquiries affect credit scores?The more hard inquiries you have in a short amount of time, the more of an effect the hard inquiries will have on your credit score. One hard pull may not affect your score at all, and if it does it will likely not drop your score by more than ten points. The risk comes when you open multiple new accounts. You are then affecting the “New Credit” and “Length of Credit” categories on your credit score, which together account for 25% of your score. How many hard credit inquiries is too many?This depends largely on your overall credit health and history. One or two hard inquiries will not make a big difference if you have a good credit score, but more than that and you risk dropping your score by 20 points or more. Does applying to refinance trigger a hard inquiry?Applying to refinance your mortgage or vehicle will trigger a hard inquiry. Since you are applying for a new line of credit that will buy out your old line of credit, lenders need to see a full and detailed credit report. Condensing your refinancing shopping time to a window of two weeks will help minimize damage, this way multiple hard inquiries for auto loans will count as one hard inquiry. (Thinking of refinancing your auto loan? Contact Auto Approve today to see how we can help!) How do you dispute a hard credit inquiry?Experts recommend checking your credit score three times per year. There are three major credit agencies, Equifax, Experian, and TransUnion, and each of these allow you to pull your report for free once per year. Take advantage of this and strategically check your report throughout the year. If you notice there are hard inquiries that you did not authorize, contact the credit agency directly. This could be a sign of identity theft, and if that’s the case you want to take action early to minimize damage. Even if it’s not identity theft, you want to clear up any errors to make sure your credit report is accurate. Before you file a dispute however, do your research to make sure it’s not valid. Sometimes credit checks come from lenders that we might not recognize.How long do hard credit inquiries stay on your credit report?Hard inquiries are calculated into your credit score for one year, but the inquiries remain on your report for two years. In other words, after one year they really do not affect your score.How do you minimize the effect of hard inquiries on your credit score?The most important thing you can do when shopping around for a loan is to condense your search time. Credit bureaus give a two week period for inquiries to be made. If you apply for multiple loans in this period, the credit agency will consider them as one hard inquiry. This is the most important thing you can do to minimize damage from multiple hard inquiries.In general, experts caution you to be aware of hard inquiries, but they stress that this part of your credit report is the least impactful. Missed payments and high credit balances are much more detrimental than new credit inquiries.And that’s everything you need to know about hard inquiries, soft inquiries, and their effect on your FICO® credit score.We hope this answered your questions about how credit inquiries affect your credit scores. If you're thinking about refinancing your vehicle to a lower interest rate to save money, Auto Approve can help! Contact us today to get a quote – and don’t worry, quotes count as soft inquiries!GET A QUOTE IN 60 SECONDS
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A Beginner’s Guide to Budgeting: Pay Down Debt Fast

12/03/2021 23:00
We get it: budgeting can be tough. And it can be especially hard to stick to the strict budgets that we tend to set for ourselves. But the truth is creating and sticking to a budget is the best way to pay down debt, and pay it down fast.The trick to creating and effective budget is to make sure it's realistic – that way you're more likely to stick to it.Here are a few simple tips for budgeting to help you get your financial life in tip-top shape.Tips for budgeting and paying down debt fast:Determine your incomeFirst things first, you need to determine how much money you are bringing in every month. This is the first step that people often miscalculate. You cannot simply write your salary down and assume that is accurate. You need to calculate your actual take home pay, which is your pay minus any taxes. This is your net income. If you have any deductions for a 401K or similar accounts, make sure you account for them as well.Next determine if you have any other income coming in every month. Maybe you have a side hustle that brings in a few hundred a month, or perhaps you have an inheritance that you receive monthly. Whatever it may be, make sure you keep a record of it as income.Categorize and Track ExpensesThis is where you need to get very organized. A spreadsheet will be very useful for you here. You will have two categories each month, fixed costs and variable costs.Fixed costs are your monthly expenses that do not change. They are the same amount every month. Here are some of the fixed costs you might have:Rent or MortgageCar PaymentCable BillInsurance PremiumTrash CollectionInternetPhone BillProperty TaxesChildcare ExpensesStudent Loan PaymentsStreaming Services (Netflix, Hulu, Amazon, Etc)These costs may or may not be adjustable based on your situation. For example you might be able to cut down on your streaming services, but your insurance is non-negotiable.Variable expenses are expenses that change from month to month. Here are some of variable costs you might have:GroceriesElectric BillParking FeesDining OutEntertainment/ AttractionsHome Maintenance and RepairsGo through your credit card statements and bank statements to categorize everything, that way you won’t miss anything. Experts suggest going back six to eight months to see how much you’ve been spending on each category per month. This will allow you to see where you might be able to cut back. Determine an average for each of the categories that you can plug into your budget. You might be surprised how much you end up spending in certain areas.Make a PlanFinancial advisors recommend a 50/30/20 model for personal budgets. In this model, 50% of your income is allocated for needs, 30% is allocated for wants, and 20% is put into savings. Another common model is the 70/20/10 plan, where 70% of your income goes to monthly bills and everyday spending, 20% goes to savings, and 10% goes to debt repayment. There are many different budgeting models out there, so do some research and find out what will work best for your lifestyle and your financial goals.No matter what your plan is, make sure it is realistic, doable, and easy to track. The more complicated your budgeting system is, the more likely you will lose steam and your budget will go off the rails.Budget your NeedsWhen reviewing your expenses, you will need to divide all of your expenses into needs and wants. What do you need to survive? What is a luxury? Divide them up and take a look at each category. Let’s start with your needs. Electricity, rent, internet; these are things we can’t live without. But there is wiggle room when it comes to some of our needs. Groceries are a necessity, of course, but reaching for the brand name isn’t a necessity. Most people need a phone, but do you need a high data plan? Look through your bills and see if there are places you can trim back on your costs. Budget your WantsThis is where you have the most room to adjust your budget. Entertainment, clothes shopping, dining out; these are all categories that we can adjust drastically. Look at your average spending in these categories and determine where it is easiest for you to adjust. Maybe you can go out to eat once per week instead of two. Maybe you can cancel one of your streaming services. Little changes here and there will add up to big savings over time.Budget your GoalsWhat are your financial goals, both short term and long term? The more structured you can be with your budget, the more realistic your goals will be. Come up with a line item on your budget sheet for savings, and determine how much you want to put into a savings account every month. It is a good idea to reward yourself periodically for reaching your savings goals. Save $1000? Go splurge on something (within reason). This will create a positive reward system and encourage you to keep saving. Your Goal: Pay Off Credit Card Debt and Student Loan DebtGetting out of credit card debt is a primary motivator for many people who start budgets. Go through your credit cards and identify any high interest cards. Are you able to get a balance transfer credit card with a lower rate? Transferring your debt to a different card may drastically lower your payments. Use your savings to strategically pay off cards with higher rates.Look at your student loans and strategize their payments in the same way. Use your savings to pay down the principle on the higher interest loans first. It might be worth looking into consolidating your loans if you are having trouble keeping up on payments.Your Goal: Buy a HouseBuying a house is most likely the biggest purchase you will make in your lifetime. If you don’t own a home yet, don’t get in over your head. Don’t fall in love with a house that will eat up every penny of your income. It is always good to have a buffer in your expenses, and overcommitting to a mortgage payment is a very common and very dangerous error. If you already have a mortgage, look into refinancing if the market rates are good. Reducing this rate can save you thousands and drastically cut your mortgage payment every month.Your Goal: Buy a CarSaving to buy a car is another huge purchase, though not quite as daunting as buying a house. If you need a loan to get your wheels, compare rates with many different lenders before committing. Making a down payment can be helpful in ensuring your monthly payments aren’t too high. It is important to know how much you can comfortably afford to spend every month on car payments before you even start looking at cars. It is easy to get swept away when you go to a dealership, so stay committed to the number that your budget allows.If you already have a car, refinancing your car loan may help lower monthly payments. If you have a high rate, contact Auto Approve today to see if we can help you save some money!Your Goal: Get Better CreditKeeping on top of your bills and making consistent payments is the best way to start fixing a damaged credit score. Budgeting can help you prioritize paying down debt which will ultimately help your credit in the long run. It is a good idea to get your credit report at least once a year to check in on the health of your credit. Look for any inconsistencies or errors and report them to the credit agency. Working to maintain a good credit score will ultimately pay off in the long run by giving you lower interest rates and better terms for any accounts in the future.Maintain Your BudgetCreating a budget doesn’t do much good if you aren’t going to stick to it. Make sure you check in every month to track your expenses and make sure you aren’t going off the rails in any category. Top Three Tips for Budgeting:Know your baseline expenses. This is the bare minimum that you need to get by every month. It’s important to keep this number in mind in case you ever lose your job or life takes an unexpected turn.Budget for essentials first. When creating your budget, make sure your rent/mortgage, insurance, electricity, and anything else that you can’t live without are included in your budget first. Track and adjust variable spending. Keeping an honest account of your spending will help you eliminate problematic spending patterns. Adjust your spending as needed, keeping in mind that the less you spend the more you save.Those are our top tips for creating a budget and paying off debt.We hope these tips will help you create a useful budget that can guide you out of debt and into savings. If refinancing your vehicle can help with your monthly budget, give Auto Approve a call today and see if we can save you money and help you reach your financial goals faster. GET A QUOTE IN 60 SECONDS
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Should I Lease or Buy A New Car?

11/30/2021 23:00
Getting a new car is a huge decision that can be very exciting – and very overwhelming. There are a million things to decide, from the make and model, to the trim level, to the color. But perhaps the biggest decision you will have to make is whether to lease or buy your new ride.In this article, we will discuss the pros and cons of leasing and buying a new car and help you decide which is the right choice for you.Here’s everything you need to know about leasing vs. buying a car.What is Leasing?When you lease a car, you are essentially renting the car for an extended period of time. Instead of paying for the whole car, you are paying for the depreciation that will occur while you are using the vehicle, plus interest and fees. Most leases are what’s called “closed-end leases”, which means that the residual value of the car is determined and contracted before you drive it home.How are lease payments calculated?Let’s look at how lease payments are calculated as opposed to financing payments. Here are some terms we will be using:Capitalized Cost- The price of the car. This can be negotiated, even if it’s a lease.Capitalized Cost Reductions- Any discounts or deals that the dealership may apply.Residual Value- The expected value of the car at the end of the lease term.Money Factor- This is the financing charge a person pays on a lease. This number is listed as a decimal, so multiply this number by 2400 to get an equivalent APR.The cost of the lease is as follows:Capitalized Cost - Capitalized Cost Reductions - Residual Value + Interest + FeesYou will have to pay lease origination fees plus registration fees, along with a down payment and security deposit. These fees are often considered “drive-off” costs which you pay upfront.  The remaining depreciation and interest will be divided up into monthly payments. For example, say you find your dream car that has a capitalized cost of $40,000. It’s residual value is $25,000, which means that you will be paying off the $15,000 depreciation. Ultimately you will be making payments on $15,000 plus interest and fees. In general, your monthly payments will be lower when leasing as opposed to buying. How are financing payments calculated?Loan payments are calculated based on the entire cost of the car:Capitalized Cost - Capitalized Cost Reductions + Interest + FeesIf you were financing the vehicle from the example above, you would be making payments on the entire $40,000, plus interest and fees. Therefore your monthly payments (and overall out of pocket costs) are less if you choose to lease rather than buy.What are the Pros of Leasing?Now that we’ve discussed how payments are determined, let’s discuss why leasing is a popular option when getting a new car. Here are some of the top reasons people choose leasing over buying:You will have lower monthly paymentsAs we discussed above, your monthly payments will be lower when leasing as opposed to buying. You don’t have to worry about sellingNot having to worry about resale is a huge perk of leasing. When your lease is over, you simply hand your keys back to the dealership and walk away.You can get a new car every few yearsIf you love having the latest model of everything, leasing may be especially worthwhile for you. Every few years when your lease is up, you get to hand in the keys and get a new car, and whatever new technology comes along with it.Your warranty will cover repairs and maintenance (sometimes)New cars typically come with three year warranties, which is also the average length of a lease. This means that while you are driving your lease, most repairs (and sometimes oil changes) will be covered by the warranty. You can maximize tax deductionsIf you are a business owner, leasing a car has more tax advantages than buying a car. The IRS allows you to write off both the depreciation costs and the financing costs that are part of the monthly payments. This is more than you can write off when you purchase a car.What are the Cons of Leasing?You don’t build equityThe main downside of leasing is that you do not build equity. At the end of the day, you do not own your car, so it will never count as an asset for you. There are early termination feesIf you are unhappy with your lease for any reason, there will be fees to terminate the lease. Breaking the lease early may also have negative effects on your credit score.There are always mileage limitsWhen you lease a car, there are always mileage restrictions on your vehicle. Dealerships usually have annual mileage caps of 12,000-15,000 miles per year. If you go over your allotted mileage, you can pay between 15 and 40 cents per mile. This can add up to be a very hefty sum if you drive a lot. Cost of wear and tearWhen you return the car, it must be in great shape. Normal wear and tear is acceptable, but beyond that you will be charged a fee for anything they consider excessive. This can include dings, dents, and tears to the interior.You can’t customize your carSince it’s not really your car, you can’t customize it as you may like. You are expected to give the car back as you received it, even if you think the upgraded wheels or spoiler add to it’s value.There are often restrictions on useMany leases have use restrictions built into their contracts. In addition to the mileage limits, you may be restricted against driving the car out of the country, or they may say that you are unable to use the car for rideshares (like Uber or Lyft). They might even state that you are unable to use the car for business. If you want to use your car for anything other than commuting and routine driving, leasing might not be a great option.So Should I Buy Instead? What are the Pros of Buying?You own the carAt the end of financing, the car belongs to you completely. It is an asset that helps build your equity. There are no limitationsSince you own the car, you do not have to worry about mileage limits or wear and tear. No one can tell you where to drive the car, or how to use the car. And you can customize it however you would like. Even if you are financing the car and don’t own it outright just yet, loans typically do not have the restrictions that leases have.Financing is often easier than leasingIn general, it is easier to get a loan than it is to get a lease. The credit requirements are usually lower and people are more familiar with the process of getting a loan rather than getting a lease.You can sell it whenever you want toUnlike a lease, you can sell your car whenever you want to sell it. While it is almost always a good idea to wait until the loan is paid off, once it is paid off you have an asset that you can sell whenever you want.You decide when – and how – to fix thingsWhen something goes wrong on a leased car, you will need to either go to the dealership or to a certified mechanic to get it fixed. But when you own the car, you can handle it however you’d like, and whenever you’d like. If you want to use factory parts to fix it, you certainly can. But you can also opt for cheaper parts and cheaper labor if you choose.What are the cons of buying?You pay interest on the entire cost of the carWhen you lease, you are only paying interest on the capitalized amount minus the residual amount (the depreciated amount) as opposed to paying interest on the entire cost of the car.You may need to make a down paymentTo get the best rates, you will usually have to pay a down payment. Doing so will lower your loan to value ratio (LTV) and get you a better APR. This means that your upfront cost as well as your total cost will be much more than when you lease.The warranty will endWhen you buy a new car, you will have a warranty for the first few years. But after that, you are on your own for any repairs and maintenance. Those are the major differences between leasing and buying a car. There are pros and cons when it comes to leasing and buying cars, and you will need to decide what works best for your situation. If you use your car sparingly and prefer to have a nice, new car every few years, leasing is perfect for you. But if you drive a lot and love to customize your car, leasing is probably not a great option for you. Already in the middle of a financing arrangement? We may be able to get you a better rate! Contact Auto Approve to see how we can save you money today.GET A QUOTE IN 60 SECONDS
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Is Now A Good Time to Refinance Your Car Loan?

11/28/2021 23:00
Financing options can be tricky when you are looking to buy a car. Oftentimes, dealerships will offer you great deals, but only if you agree to their less-than-stellar financing. Or maybe you were cajoled into bad terms because your credit at the time wasn’t great, and you didn’t have another option. If you have found yourself in this situation, now might be the time to refinance.If you don't have a great car loan interest rate, now might be a great time to refinance your car loan. Reasons for Bad Financing TermsThere are many reasons you might not have a great interest rate on your new or used vehicle. Let’s review some of the reasons below.Dealership FinancingA very common reason for bad financing terms is dealership financing. If you bought your car through a dealership, they almost certainly tried to convince you that dealer financing was a good choice. And why wouldn’t they? Dealerships are indirect lenders, which means they usually act as an inbetween for you and a bank or credit union. The financial institution handles the actual financing, while the dealership tacks on financing fees. They make money by coordinating and convincing you to participate in their financing. This is money coming directly out of your pocket. If this happened to you, you should be able to refinance and get out of the agreement you are currently in. Now might be the best time to refinance your car. Many who have refinanced out of dealership loans save as much as $80 a month.Bad CreditIf you had so-so credit during your initial purchase and financing, you may have been subjected to a bad interest rate. When determining interest rates, lenders look at the 4 c’s of credit: Capacity- your ability to repay the loanCollateral- what you have that can repay the loanCapital- how much you are worthCredit- your credit score and payment historyYour credit score is affected by a combination of payment history, amounts owed, credit history length, credit mix, and new credit. If there have been changes to any of these categories, you may be eligible for a better rate. Check your credit score and see if it has improved since your initial loan.Market FactorsDid you need to buy a car when the interest rates in the US were high across the board? As much as we try to prepare, we cannot control the external factors that affect our finances. If the interest rates were high when you originally purchased your car, now might be the best time to refinance your car. Does refinancing a car hurt you?There are a few ways that refinancing can hurt your credit or hurt your pocketbook. It is always a good idea to do the math and see how much refinancing will cost vs. how much it will save you. Here are some reasons that you should hold off on refinancing. Prepayment PenaltiesLook at your current loan and determine if there are prepayment penalties. Prepayment penalties are put in place by lenders to discourage paying the loans off early, as early payment results in less accrued interest, which results in the lenders making less money. The penalties will be listed in your loan agreement, but you can also call the lender to clarify.Time RemainingIt is important to hit a sweet spot in the timing of your car refinance. Experts suggest waiting six months to a year before refinancing, as it will take this amount of time for your credit score to rebound. But you also want to make sure that you refinance when there is at least two years left on your existing loan. Because auto loans are front-loaded interest bearing loans, you pay more interest the earlier it is in the loan. If you wait until there is only a year left on your loan, you won't be saving a lot in interest payments, as most of your money will go to the principle payments. Your Car Isn’t in Great ConditionIf your car has a lot of miles on it, or is worth less than what you owe on it, you probably won’t have luck refinancing right now. Why Now Might Be the Right Time to RefinanceMany experts agree that right now might be the best time for many people to refinance their car loans. Here are some of the top reasons you should consider refinancing your car now.It’s Time to SaveAccording to a SpendMeNot survey, 69% of adults have less than $1000 in savings. Moreover, a recent Credit Karma survey showed that most Americans don’t have even $400 in savings for an emergency. Small savings here and there can help many to start building their emergency funds.The Rates are GreatThe automotive website Edmunds is reporting the lowest interest rates in recent years, with some financial institutions offering rates of 2 to 3%. A Credit Karma study revealed that people who refinanced through them saved an average of $3,000, which meant people were saving about $55 per month. With the unpredictability of today’s economy, you should think about refinancing before the interest rates increase. It’s Easier Than You ThinkCar refinance sounds like a big undertaking. It seems to be a complicated, mysterious process with a lot of options to weigh. But it is actually much easier than you may think. Refinancing a car is much simpler than refinancing a mortgage, and can usually be done in a few hours. And if you use Auto Approve, we make this process seamlessly easy. All you need to do is fill out some basic information and we will shop around and get the best quotes for you to compare. We even handle the DMV!With a 4.7 out of 5 rating on Trustpilot, our clients can testify to the ease and effectiveness of refinancing. One client noted “I was worried about refinancing because I have never been through the process. It was so seamless and I got a great outcome out of it all.” Some users report cutting their interest rates by as much as 6 points. At Auto Approve, we aim to make this process easy and save you money. Those are our two main goals, and our clients testimonials show that we get results. With today’s low interest rates and Auto Approve’s easy application process, right now might be the best time for you to refinance your auto loan.So what are you waiting for? Contact Auto Approve today to get started!GET A QUOTE IN 60 SECONDS
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How to Manage the End of Unemployment Benefits

11/25/2021 23:00
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
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