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Emergencies are unpredictable, by nature, and none of us want to get caught off guard by a huge, unexpected expense.We have all heard how important it is to have a rainy day fund, but how much should you save, and how do you start saving?Here we will look at how much money you should save for emergencies and give you some tips on how you can build this into your budget.What is an emergency fund?An emergency fund is a separate bank account or savings account that will help offset any unexpected situations that pop up. Such emergencies might include buying a new car if your car suddenly stops working, fixing a leaking roof, or paying for unexpected medical expenses. An emergency fund might also be kept in case a person loses their job. What constitutes an emergency will vary greatly from person to person, so an emergency fund will be used differently by different people.But the goal of an emergency fund is always the same: it can help bail you out of a tight financial spot. How much should you budget for emergencies?Just as what constitutes an emergency will differ from person to person, so too will how much you should save. Emergency funds are often discussed as “how many months of expenses'' you should save. While the general rule of thumb is to save six months’ worth of expenses, this depends a good deal on your lifestyle and financial situation. Let’s look at some different scenarios:When you should save three to four months’ worth of expenses:If you are in a relatively stable position in your life and don’t have a lot of people financially dependent on you, saving three to four months’ worth of expenses will provide a good emergency fund. Consider saving this much if the following applies to you:You’re relatively young and healthy.You have a stable job, and if you lose your job you could easily find a new one.You do not have dependents (children or pets).You have a partner who is financially stable.You have little debt.If this sounds like you, aim to save for three to four months of expenses.When you should save six months’ worth of expenses:If you have a lot of expenses every month, or have dependents, you are better off saving closer to six months worth of expenses. Consider saving this much if the following applies to you:You have a lot of expenses (this could include a high mortgage, multiple loan payments, or high vehicle payment).You have dependents.Your job is not very stable, or if you lose your job you would have a difficult time finding another.You are the sole provider.You live in an area with a high cost of living.All of these factors mean that if you have an emergency expense, it might be a very costly one. Experts suggest saving closer to six months’ worth of expenses to give yourself a bigger cushion.When you should save one year’s worth of expenses:If you are older and still have a good amount of expenses, it is better to be safe than sorry and save a bit extra. Consider saving this much if the following applies to you:You are older or have underlying health conditions.You are nearing retirement.You have a highly specialized job.You are the sole provider to multiple dependents.Emergency expenses in this case might be pretty costly, so having a year’s worth of expenses will help offset any unforeseen costs and keep you from needing to worry about what could be coming around the bend.How do you determine your expenses?It is important to have a good grasp on what your living expenses are every month. You should always have a general idea of how much money comes into your household and leaves your household every month. Creating a budget is a great way to do this. If you need help starting your budget, check out our Beginner’s Guide to Budgeting. To calculate your expenses, start by figuring out the following:Your mortgage or rentYour utilities (electricity, gas, water, etc)Your car paymentsYour insurance paymentsYour loan paymentsYour groceriesYour medical bills and prescriptions Any other monthly expenses (subscriptions, vet bills, etc)When you add all of this up , you will have a pretty good idea of how much money goes out of your pocket every month. Depending on your goal, multiply this number by 3, 6, or 12 to determine your ideal emergency fund amount.How do I save for emergencies?You know how much you need to save, but how do you make that into a reality? Follow these steps to start saving for your emergency fund today.1.Set your savings goal. Calculate your expenses as described above and determine your savings goal. Having a specific goal in mind will help you stay on track.2.Create a budget. Determine all of your expenses for the month as well as all of your income, and look for some places where you can trim some fat. Are there subscriptions that you don’t use? Can you cut back on eating out or takeout? Comb through your budget for opportunities to save.Pro Tip: A great way to save money every month is to refinance your car. By refinancing to a lower rate, you can save hundreds of dollars that you can then invest in your emergency fund. And if you use Auto Approve, the process couldn’t be simpler. It's easy to get a quote today (no credit check required!) and see just how much money we can save you!3.Create an emergency fund within your budget. Start contributing to your emergency fund as if it is a bill you have to pay. Determine how much you can afford per month to set aside, whether it is $10 or $500. As long as you are routinely contributing to your fund it will eventually grow. If you come into extra money throughout the month (think tax returns, a bonus, extra tips, money from a side hustle, etc.) think about investing at least part of it in your emergency fund.4.Put it somewhere safe. It is important to keep your money in a secure place where it can ideally grow and earn interest of its own. Where should you keep your emergency fund?When we talk about emergency funds, we might think of cartoon characters keeping their money in a jar above the refrigerator marked “rainy day fund”. But in reality, we are talking about thousands upon thousands of dollars. So where is the safest and smartest place to keep this money? According to financial experts, here are the top four spots to keep your emergency funds:A high yield bank accountKeeping your emergency money in a high interest saving account is one of the easiest and safest ways to keep your money. It is easy to access when you need it in an emergency, and you may be eligible for a sign-on bonus when you open a new account.A money market accountMoney market accounts are similar to savings accounts, but banks are allowed to invest this money differently so they often offer higher interest rates. You can still easily access your money, but there are often some restrictions (for instance you cannot withdraw money more than six times per month). Additionally, these funds are not insured by the FDIC so you could lose money out of these accounts.A certificate of depositA certificate of deposit offers a guaranteed return at a fixed rate (for example they might offer 1.25% APY for 24 months). These guaranteed rates are usually higher than a savings account or money market account, but your money is tied up for the period of time to which you agree. This means that you may earn more money with this option, but you might not have access to the money when you need it most.A Roth IRAWhile a retirement fund might not immediately come to mind when you think of emergency savings, investing your emergency money in a Roth IRA might be a good move for you. If you invest your funds conservatively, you can make more money than with a traditional savings account. There is a higher risk here however of losing some of your money, so it is riskier than a traditional bank account.And that’s everything you should know about starting an emergency fund.While it is impossible to prepare yourself for everything life throws at you, you can certainly try to prepare. Preparing for the unexpected with an emergency fund is a great idea that everyone should consider.If you are trying to cut down on your monthly expenses to create an emergency fund, or just looking to save some money, consider refinancing your vehicle with Auto Approve. Our team will shop around to find you the best rates, making refinancing your car as easy as possible. And with a 96% would-recommend rating on Lending Tree, you know we have the testimonials to back it up. So what are you waiting for?GET A QUOTE IN 60 SECONDS

If you have already refinanced your car, you may be wondering if you can refinance again. What if your timing wasn’t great the first time around? What if your credit score has improved a lot and you’re certain you can get a better rate this time around? Don’t fret – we’re here to answer all of your refinancing questions.(Thinking about refinancing for the first time? Take a look at these 3 great reasons to refinance.)Let’s look at how many times you can refinance your car and what you should think about when refinancing.Can I refinance my car more than once?Yes! There is no limit to the amount of times that you refinance your car. That being said, there are a few questions you should ask yourself.Do I qualify for refinancing?When did I last refinance?How will refinancing affect my credit?How do I know the time is right to refinance?In this article, we will look at all these questions and help you decide if refinancing is the right move for you.Do I qualify for refinancing?First things first, are you eligible to refinance again? Most lenders have general requirements for refinancing a loan. Here are a few things that lenders look at:How old your car isHow many miles your car hasHow much money is left on your loanMost lenders require that your car is less than ten years old and has less than 100,000 miles on it. Refinancing tends to get more difficult as the car ages and depreciates more. If you are wondering if you are eligible, use our online quote form to find out today!When did I last refinance my car?Experts recommend that you have 6-12 on-time payments with your current lender before you refinance. So if you last refinanced three months ago, it’s probably best to wait a few months. Why? Lenders want to see that you will make full and consistent payments on your loan. Proving this with your most recent loan is the best way to show them that you are a good candidate for a new car loan.How will refinancing multiple times affect my credit?Refinancing will affect your credit score, so be sure to think about this before you pull the trigger. Refinancing affects two parts of your credit score: credit history length and new credit. Since refinancing is paying off one loan with another new loan, refinancing creates a new credit account. At first, refinancing can negatively affect your credit history length, since it counts as a new credit account, but over time, that affect fades – and, in fact, the refinance can improve your credit score in the long run. When you actually go to refinance, your lender will check your credit, which will likely pop up as a hard inquiry on your credit report (remember, however, that hard inquiries only last a year on your credit score, so that will only be a temporary ding).If you refinance with Auto Approve, we'll help you find the best rate for you – and don't worry, getting started doesn't require a credit check. (Click here to find out why Auto Approve is the best way to refinance!)How do I know if the time is right to refinance?You know that you qualify for refinancing and you know that you have waited long enough to refinance. So what else should you think about before refinancing again?How much time is left on my loan?Before refinancing, think about how much time is left on your current loan. If you still have a good amount of time left on your loan and you don’t have a good interest rate, refinancing can save you a lot of money. The sooner you switch to a lower APR, the sooner you will start saving. If you don’t have a lot of time left in your loan (say less than a year), the fees of refinancing might outweigh the saved interest. Make sure you do the math and figure out what your potential savings could be with refinancing. Auto Approve can help show you how much money you can save, just head over to our quote page to get started!Are there prepayment penalties on my current loan?If your loan has prepayment penalties, this may deter you from refinancing. It’s important to read the fine print and determine what the fees are. In some cases, the savings from refinancing might still outweigh any prepayment penalties. If you are unsure of what your prepayment penalties are, call your current lender and have them walk you through it. Be thorough to avoid any surprise fees.Is my credit score good?If your credit score has improved since the last time you refinanced, it’s definitely a good time to think about refinancing again. Improving your credit score by even a little bit can score you a much better APR from lenders, which means you can save hundreds, even thousands, every year. Your credit score improves as you make consistent payments, as you pay down debts, and as your accounts age. Check your FICO credit score to see where you stand (you can do this for free three times per year).Are interest rates good?Make sure to consider interest rates in general. When interest rates are low (like right now) you want to strike while the iron is hot. The future is always uncertain, so when you see low APRs, you want to take advantage while you can.Do I need a little breathing room in my finances?If things are a little tight every month, refinancing might be the answer to your prayers. Securing a lower APR and changing your payment schedule (say lengthening it from 24 months to 36 months) can reduce your monthly bill drastically. Refinancing is a fantastic way to free up room in your monthly budget.On the flipside, if you have some extra breathing room in your monthly budget, refinancing can help you save money in two ways. First, you can lower your APR so you are saving money on interest. You can also shorten your repayment period so that you are paying that interest over less time. This can save you a whole lot of money in the long run (and the short run!).There is no limit on how many times you can refinance, so you should refinance as often as it makes sense for you.Refinancing is a great option for many reasons. The biggest reason is simple: it can save you a lot of money. At Auto Approve, we offer the lowest rates with no markup, and with an A+ rating from the Better Business Bureau, you know we will work hard to save you money. So, if you're ready to start your refinancing journey, get a quote from Auto Approve today.GET A QUOTE IN 60 SECONDS

There’s nothing like the feeling of driving a new car off the lot for the first time. That new car smell, that feeling of getting everything perfectly adjusted for the first time. There is nothing quite like it.So it comes as a surprise when, months and years later, you realize that your car isn’t new anymore. The smell has faded, that new feeling has worn away. Suddenly you realize your car has depreciated and lost some of its value. But just how much value has your car lost since that first day? And why?Let’s look at why vehicles lose their value and how quickly this depreciation happens.What is depreciation?What exactly is depreciation? Car depreciation is the difference between how much your car was originally worth and how much it is worth currently. Depreciation occurs with everything we own. Unless we are talking about antiques, nothing gains value as it gets older. The value of your car will reduce the more you drive and the more wear and tear your car accumulates.How quickly do cars depreciate?When looking at the rate of depreciation, we can divide it into three categories: after it leaves the lot, after one year, and after five years.After it leaves the lotThe second you drive off from the dealership your car goes down in value. It officially has an owner and is no longer new. It is estimated that a car loses about 10% of its value the moment it leaves the lot. Within a few feet, your new $25,000 car is worth $22,500. This is part of why the Loan-to-Value ratio on cars can be so high.After one yearThe biggest decrease in value occurs in the first year of ownership. Experts estimate that new cars lose 20% of their value in the first year. Your $25,000 car is now worth only $20,000.After five yearsAfter the first year, cars tend to lose about 15% of their value every year. By the end of the car’s first five years, it will lose about 60% of its original value.Why do cars depreciate?There are many reasons why cars depreciate, but it all comes down to wear and tear. The more you drive a car, the less reliable it is and the more likely you are to run into problems. Here are the top reasons for deprecation:MileageThe more you drive your car, the more it depreciates. High mileage shortens the amount of usable time left on the car, thus decreasing its value more.AgeThe older a car is, the less it’s worth. Even if it still drives perfectly, the fact that it is an older model will reduce the value.Make and ModelIf you are driving a more popular model, your car will depreciate slower. Value is based on how much someone is willing to pay. The more people want your car, the more they will pay for it. If you have a less desirable car, expect your car to depreciate at a faster rate.Ownership HistoryWhen it comes to depreciation, the less owners a car has the higher the value will be. How well the owners maintained the car and where the car resided will matter a great deal as well. If the car was kept in a busy city, it may indicate stop and go wear and tear. It is also more likely to have small dings and dents from constantly being in close proximity to other vehicles.ConditionWhat is the overall condition of your car? Has it been in a lot of accidents? Were there regular oil changes and alignments? The better the car was maintained, the longer its usable life will be, thus the higher the value will be.The Price of GasDepending on the price of gas, your vehicle may depreciate at different rates. Vehicles that are more fuel efficient depreciate less when gas prices are high. Cars that consume more gas depreciate less when gas prices are low. ColorVehicles with neutral colored paints tend to depreciate less than other vehicles. This is because neutral paints remain consistently popular, while other colors will go in and out of style.How can depreciation affect your loan?If you took out a loan to purchase your new car, you must be especially wary of depreciation. If depreciation occurs very suddenly, you risk becoming upside down in your loan, meaning that you owe more on your loan than the car is worth. Do your research before you buy your car to ensure that the model you are purchasing does not depreciate abnormally fast, and follow the tips below to reduce the amount of depreciation. How do you stop car depreciation?While depreciation is inevitable, it is possible to slow down your car’s depreciation. Here are some helpful tips:Reduce your mileageCutting back on driving is a great way to curb depreciation. If you can put less than 10,000 miles on your odometer per year, it will help you out a lot in the long run.Keep up on maintenanceKeeping good maintenance habits will also help reduce depreciation. Regular oil changes, alignments, tire rotations, and air filter changes are just some of the routine maintenance you should keep up on. Keep your exterior clean and ding freeWash and wax your car regularly to protect the paint and keep the exterior looking as new as possible. If your car has small dings and dents, try to get them out if possible. Keep good recordsKeeping up on maintenance records is good practice in general, and can help increase the value of your car. It’s always helpful to be able to prove that your car has had regular oil changes and other maintenance performed.Don’t smoke in your carSmoking in your car will lead to faster deprecation too. It’s almost impossible to get the tobacco smell out of interiors, so avoiding smoking altogether will help keep your interior clean and smell-free. Don’t eat in your carReducing the amount of food you have in your car can also help depreciation. This will reduce the likelihood of spills and smells in the interior and help you maintain value.That’s everything you need to know about depreciation and how you can protect yourself from it.Depreciation is unavoidable. Every car will lose its value over time, but good driving and good maintenance habits can help curb the effects. Be especially cautious of depreciation if you have an auto loan. If your auto loan is a little too high, it might be time to consider refinancing. Auto Approve is here to help you refinance to a lower APR, which can save you money and reduce your monthly payments.GET A QUOTE IN 60 SECONDS

When you buy a new car, it usually comes with a factory warranty that protects your car for the first few years. But when the factory warranty expires, you are left to foot the bill on any repairs that your vehicle might need. This is why dealers will try to talk you into purchasing an extended warranty on your vehicle. But how exactly does an extended warranty work, and is it worth it?Let’s look at how extended warranties work and what you should consider if you are thinking about purchasing one.What is a factory warranty on a vehicle?A factory warranty is basic coverage that is offered by the manufacturer that will repair certain issues at no cost. What the warranty covers specifically will vary greatly depending on the manufacturer. Warranties have gotten much better in the past decade or so, and standard warranties usually cover powertrain issues and many bumper-to-bumper repairs. The powertrain warranty covers your engine and transmission if there are any defects that cause your engine to operate improperly. The bumper-to-bumper warranty covers most everything else on your vehicle, including air conditioning, on board computers, and navigation systems.The length of the standard warranty depends greatly on which manufacturer you buy from. The standard timeframe is 3 years or 36,000 miles, whichever comes first. Certain luxury brands however have longer warranties. General Motors offers five year/100,000 mile powertrain warranties, while Hyundai offers ten year/100,000 mile powertrain warranties.It is important to read your warranties very carefully to know exactly what is covered and what is not. Under federal law, manufacturers are required to cover emissions repairs up to eight years/80,000 miles. This covers catalytic converters as well as other emissions system parts. You should absolutely read the fine print of your factory warranty in your consideration of whether or not you need additional protection.What is an extended warranty on a vehicle?How exactly is an extended warranty different from a standard factory warranty? There are two types of extended warranties, those offered by manufacturers (also called OEMs, original equipment manufacturers), and those offered by third party vendors. OEM warranties will extend your coverage and work the same way that your standard factory warranty works. Depending on the manufacturer, they will either cover similar issues as your original warranty, or they might cover significantly less. Third party warranties are similar to OEM warranties, but with a few key differences. One of the major differences is how your repair bills get paid. For a factory repair, you will need to go to either a dealership or a dealer certified mechanic, and they will handle billing. For a third party warranty, you may need to pay for the repairs out of pocket, then get reimbursed later. A good extended auto warranty will pay the mechanic directly. The upside of third party warranties is that you do not need to use certified parts, which are usually much more expensive than the generic parts.How much do extended car warranties cost?The cost of an extended warranty varies widely based on coverage options you select as well as the make and model of your vehicle. A factory extended warranty can easily cost between $1000 and $3000 up front, and if that coverage is rolled into your auto loan, you will pay interest on that cost.What are the advantages of an extended auto warranty?So, is an extended warranty worth it? Here are the pros and cons of purchasing an extended warranty.Pro: You can drive your car for longer worry free.If you are planning on driving your car for longer than the factory warranty covers, it might be worth it to consider. Expensive repairs can hit unexpectedly, and an extended warranty will alleviate this. An extended warranty is like insurance. You don’t always need it, but when you do need it, it is extremely helpful.Pro: It can help you keep up-to-date with technology.In-car technology is amazing nowadays. But with all of the advanced features out there, it is very easy for technology to become obsolete or stop working properly. One Apple upgrade on your phone and suddenly your GoogleMaps doesn't connect properly. A new Android hits the market and suddenly the bluetooth doesn't sync quite right. Having an extended warranty will often cover software upgrades at no cost so that you can use the technology for longer.Pro: You can customize it to your needs.Extended warranties, especially third party vendor warranties, can be customized to fit what you would like covered. This can be helpful to reduce your monthly payments but still get coverage for common issues with your car. It is helpful to use sites like JD Power and Associates and Kelley Blue Book to see what some common repairs are on your particular vehicle, and try to get a warranty to cover those issues.Pro: You might get some added benefits.If you purchase an extended warranty through a third party vendor, you might get some additional perks such as roadside assistance, rental car benefits, and complimentary towing. This depends largely on who your provider is, but these extra perks might tip the scale for you if you are on the fence about getting an extended warranty.What are the disadvantages of an extended warranty?Con: Paying for a repair might cost less overall.It is impossible to say whether or not an extended warranty will cost less than simply getting the repairs. On average, extended warranties cost about $750 a year. If you get a three year extended warranty and nothing ever goes wrong with your car, you are out $2250 with nothing to show for it. When deciding on an extended warranty, you should consider how much you end up at the repair shop. If you are there often and there seems to always be something going wrong with your car, it might be worth it. Also consider your vehicle in general: do you have a car that’s known to be unreliable, and you’ve just been lucky up until now? These are all important things to consider. Again, look up common issues and possible repairs your car may need and consider how long you intend to drive your current vehicle. One pricey repair, again, could tip the balance – and the nice thing about an extended auto warranty is that you can plan for the cost of the warranty, so you don't have to worry about big surprises. Again, it's like insurance – if you just pay for it all year, it can feel like a waste, but if you end up needing it, you may be grateful you got it.Con: They don’t cover everything.Even if you customize your extended warranty to fit your needs, there are many things that are not covered by warranties. Many wear and tear items, including brakes, brake pads, and headlights aren’t covered by all warranties. It's important to find out what each warranty provider you're considering covers and compare and contrast plans.Con: They require proof of maintenanceMany warranties require proof of regular maintenance as well. If you regularly miss oil changes and tire rotations, there's a chance they will not cover certain repairs. If they believe it is something that regular maintenance could have prevented, they might give you a hard time about covering it. Additionally, if it is a factory extended warranty, you will need to go to a dealership or dealer certified mechanic to do any repairs.  This can be a strain if you live far from a dealer.Con: There may be either overlap in your protection or a gap in your protection.If the extended warranty’s coverage overlaps with your regular factory warranty, you will end up paying for a useless warranty for the overlap period, as the coverage is redundant. That's why not everyone opts for an extended auto warranty with a new car. However, if there's something in particular your regular warranty doesn't cover that you'd like covered, it may be worth shopping around for extended protection. Some extended warranty companies are more flexible than others.All that said, if you wait for your factory warranty to expire before purchasing an extended warranty, you will probably have to wait for coverage to kick in. Extended warranties do not cover pre-existing conditions, so they often have a waiting period. Typically you must wait 30 days or 1,000 miles before the warranty takes effect. So it's a double edged sword – you may want to try to start the extended warranty coverage as close to the time your manufacturer warranty ends.Con: You might have to pay a deductible.Certain extended warranty plans will charge you a deductible for each repair. Depending how your contract is worded, it is possible that you will have to pay a deductible for each time your vehicle is brought into the shop. This means that you could end up paying multiple deductibles for one repair. So read contracts closely and ask any agent you're working with about the details of the coverage you're being offered.Can you buy an extended warranty later?Yes, you can buy an extended warranty after you buy your new car. But if you purchase the extended warranty when you initially buy your new car, you can build the extended warranty into your loan payment. If you are not planning on financing it, you should definitely think about it and do some shopping around before agreeing to a dealership extended warranty.Should I get an extended warranty?There is no right answer for this question. If you are nervous about not having coverage and can afford the payments, it’s certainly worth looking into. Just make sure you do research on your particular vehicle to make an informed decision.That’s how extended warranties work on new cars.We hope this will help you make an informed decision about purchasing an extended warranty for your new car. And if you have a new car that you love but loan payments that you hate, Auto Apptove can help! We'll work with you to find your best option to refinance your auto loan to a lower APR and put more of your hard earned cash back in your pocket.GET A QUOTE IN 60 SECONDS

Going to the gas station to fill your car up can be a harrowing experience. How can it really be that much to fill up your tank?! But believe it or not there are some tips and tricks to help you save at the pump. We’ve compiled the best advice out there on how to save big when you fill up. After all, with the price of gas lately, it’s definitely about the destination and not about the journey. Here are our top tips to save you money the next time you are at the gas station.Use a Gas AppDid you know there are apps specifically designed to save you money at the gas station? Apps such as GasBuddy and Gas Guru track gas prices and can tell you which stations in your town or along your commute have the best prices.In general, gas is cheaper off the beaten path. You will pay more at stations that are right off of the interstate or smack dab in the middle of your city. Also, if you live along a state line gas might be cheaper in another state. Using these gas apps can help you determine where you will get the best deal. Join a Gas Rewards ProgramThere are a ton of loyalty programs out there for everything under the sun, including gas. The best rewards programs out there are tied to one specific brand. Here are some of the most popular programs:BPme program: This can be used at both BP and Amoco stations. When you register, you get 5 cents off every gallon for the first month. After that you can get the same discount by spending at least $100 per month on gas.Exxon Mobil Rewards+: The Exxon Mobil Rewards+ program gives you 3 points per gallon on fuel and 2 points per $1.00 you spend at their convenience store. For every 100 points you earn, you get $1.00 off of your gas purchase.Circle K Easy Rewards: For every gallon of fuel you buy at a Circle K you earn 10 points. For every dollar you spend in a Circle K store, you earn 20 points. Once you earn 2,000 points, you will save $2.00 at the pump. Most gas brands offer rewards programs these days, so if you find yourself frequenting one brand, look to become a member of their program.Get a Credit Card with Gas RewardsMany credit cards out there have cash back incentives, and certain cards are best for fueling up. Here are some of the top gas reward credit cards:Bank of America Customized Cash Rewards Credit Card: This card gives you 3% cash back in a category of your choice, such as gas (up to $2500). The gas does not need to be from a particular brand either. In addition you get 2% back on groceries and 1% back on everything else.Blue Cash Preferred® Card from American Express: This card gives 3% cash back at gas stations, as well as other travel related expenses such as taxis, bus tickets, and subways. If you drive a lot, it makes sense to get a gas rewards credit card. Be sure to do your research though–many credit cards out there only offer the higher rewards for the first year or so, and then the reward points decrease drastically.Fill Up Earlier in the WeekFilling your tank up earlier in the week may be a surprising way you can save money at the pump. According to GasBuddy, gas prices tend to be lower on Mondays and Tuesdays. If you can plan your fill-ups ahead of time, you will avoid being forced to go to the closest gas station  (which is most likely not the cheapest gas station).Take Care of Your CarGood car maintenance can actually help you use less gas. Here are some basic maintenance and upkeep tips that may help your fuel efficiently and save you some money in the long run.Check your tire pressure. Underinflated tires can reduce your fuel efficiency a good deal. Experts recommend that you check your tire pressure once a month and make sure it is within the specified range in your owner’s manual. Keeping your tires at the correct pressure can improve your gas mileage by as much as 3.3%. Correct tire pressure will also lengthen the life of your tires.Make sure you are using the right oil. Check your owner’s manual to ensure that you are using the correct type of oil. Using the wrong oil not only adversely affects your gas mileage, but it can cause your engine to wear faster. Get routine oil changes. As oil breaks down, it forces the engine to work harder, which increases the amount of gasoline that is used. The longer you go in between oil changes, the more gas you will waste. In the past, it was recommended to get an oil change every six months or 3,000 miles, but with advances in synthetic lubricants it is now suggested between 5,000 and 7,000 miles. Check with the manufacturer or a trusted mechanic to find out what is best for your car.Replace your air filters. Clogged air filters can significantly decrease gas mileage. In general they should be changed once a year, or every 15,000-30,000 miles, but check your owner’s manual to see what the manufacturer recommends. Check your spark plugs. You should get your car tuned up a few times a year. During this routine checkup, they can check and replace any bad spark plugs. A bad spark plug can reduce fuel economy by as much as 30%.Make sure your gas cap is securely fastened. If your gas cap doesn’t fit snugly or is not screwed in properly, you could be losing gas to evaporation. Make sure there is a good fit and that it is resecured properly every time you fill up at the tank.Lighten your load. The lighter your car is, the higher your fuel efficiency will be. Getting rid of unnecessary weight including roof racks and bike racks can help you save some cents at the pump.Change Up Your Driving HabitsIf you are serious about improving your fuel economy, there are some simple changes you can make to your driving habits that can save you money.Plan your routes strategically. Instead of going out multiple times during the day or week to run errands, try to hit all of your errands that are in the same location at once. Look at GoogleMaps or Waze to determine the most cost-efficient way to get to your destinations. A little planning will go a long way.Reduce your Heater and Air Conditioning Use. Depending on where you live, this might be a hard one. Reducing the use of the heater and air conditioner can significantly increase your fuel efficiency. It is up for debate if the fuel being used for air conditioning at a high speed is offset by the amount the car slows down with the windows open. But if you are driving around town, windows are definitely the more fuel efficient option. Slow Down. It’s hard to let off the gas pedal at times, but reducing your speed can help your gas mileage significantly. Once your car goes over 50 miles per hour, the drag on your car starts to take a toll. It is estimated that you can lose up to $.25 per gallon for every 5 miles per hour you drive over 50 miles per hour. This can add up quickly at the pump if you are zipping around town at 70 or 80 miles per hour. Cruise Control When Possible. If you are driving on the highway or for a long stretch, switch to cruise control. Maintaining a steady speed is much better for gas mileage than constantly changing speeds.Accelerate Gradually. Pedal to the metal wastes gas, unfortunately. The more you ease into an acceleration, the better your gas mileage will be. Skip the Premium, If You CanIf your car manual doesn’t specifically say that it requires premium, you are not only wasting your money but potentially hurting your car.  Premium gas has a higher octane rating, which means that it resists pre ignition more than regular gas. Only high performance engines require higher octane gas. Opting for regular gas instead will save you a good deal in the long run.Those are the best ways to save money at the gas pump.We hope these tips will help you save your hard earned money. After all, that cash is always better in your pocket than in someone else’s pocket. If saving money is your ultimate goal, consider refinancing your car with Auto Approve.Our finance gurus are here to help you find the best APR possible and reduce your monthly auto loan payments. Get a quote or call today to find out just how much money we can save you!GET A QUOTE IN 60 SECONDS

When you accept a new job, you tend to focus on the big picture. Your new salary, your number of vacation days, and the hours of your work week are some of the biggest things you will think about with your new position.But nowadays, there are so many additional perks that employees are offered, and oftentimes they aren’t even aware of what they are missing. Whether you just started a new job or you’ve had a steady job for years, there may be benefits available to you that you are not using to your advantage.Here we will look at some employee benefits that you may be missing out on.In order to determine exactly what benefits are available to you, it is important to look carefully through all employee paperwork you receive. If you have any questions, your human resources department should be able to answer any and all questions about your using your employee benefits. Below are some of the most common employee benefits.Employer Contribution Matching ProgramsMany companies will match your contributions for retirement plans, such as 401(k)s. This will vary greatly from company to company, but the two most common matching programs are partial matching and dollar for dollar matching. Partial Matching: Your employer will match part of the money that you put in. This depends greatly on your particular plan, but it is common for employers to match 50% of your contributions. This is usually capped at 6% of your salary (they will contribute up to 3% of your salary).Dollar for dollar matching: Your employer will match your contributions in full up to a certain amount. If you are dollar for dollar up to 3%, your employer will match only up to 3% of your salary.With either of these matching programs, if you are not contributing to your retirement plan, you are missing out on free money. It can be hard to budget for this type of savings, but if it is possible you should definitely take advantage. Health Savings AccountsThere are three main types of Health Savings Accounts that may be available to you: HSAs, FSAs, and HRAs.HSAs: In recent years employers have found it more cost effective to switch to higher deductible health insurance plans, which means that employees have to pay more out of pocket for their health care. This is where HSAs come in and can be very beneficial. These accounts are owned by the employee, and contributions can come from the employer and the employee. Money is placed tax-free in an account and can be used for qualified medical expenses. These are only available if you have a high deductible plan. Many companies will contribute money per year to offset the higher deductibles.FSAs: FSA’s are used in conjunction with health insurance plans. The accounts are owned by the employer and deductions are taken from paychecks as tax-free contributions. Employees can be reimbursed out of this account for qualified medical expenses. HRAs: These accounts are set up by the employer to offset medical expenses. Employers are the only contributors to these types of accounts, so you cannot add your own contributions. This money can be rolled over from year to year, so if you don’t use the total amount one year you can use it the following year. Employers may offer one or all of these account options, so do your research and decide what will work best for you and your family.Legal PlansCertain employers will offer legal group plans that can provide discounted rates for legal services. Participating firms will assist employees with many types of legal issues, from preparing a will to disputing insurance claims. Legal fees can add up quickly, so discounted legal help is a great benefit.Life InsuranceLife insurance is something that most young people do not think about acquiring, but if your employer offers it, you should definitely consider enrolling. The sooner you get life insurance, the more beneficial it will be to you in the long run. The earlier your contributions begin, the more you can accumulate in the account. If you get life insurance through your company, it may be free. Many companies guarantee one year’s salary in insurance if the employee enrolls. You can contribute additionally to this amount, and it is usually pre-tax. Life insurance is especially worth considering if you have a family or are the main provider in your household.Disability InsuranceLook into the disability insurance policy that your employer offers. Disability insurance can help you recover up to 70% of your missed salary in the case that something happens to you and you are out of work for a period of time. If you are able to pay your premiums with pre tax income, then it is definitely worth considering. If you are injured and unable to work without disability insurance, you will have to rely on your savings account, and it could be very harmful to your financial health.Dependent Care OptionsYour employer may offer dependent care FSAs. This means that you can set aside pre-tax money for reimbursement for child care or disable adult care. These accounts typically don't roll over funds from year to year, so it is important to determine how much money you will use for childcare per year and to not overshoot your estimate. This can save you money if you rely on daycare or have a nanny.Additional Employee BenefitsYour employer may offer many more types of benefits to employees. Some additional benefits may include:Free gym membershipTuition reimbursement or supportFree parkingProfessional development programsRead carefully through your employee handbook or guide to determine if there are any other benefits that you could be utilizing.Rollover BenefitsCheck to see which of your benefits can roll over from one job to another. If benefits do not rollover, such as FSAs, then time isn’t a factor as much. But if some benefits do rollover from job to job, like life insurance, the earlier you take advantage of the programs the more beneficial they are.  Don’t miss out on the employee benefits that may be available to you.Most employers offer some, if not all, of the benefits described above. Too many employees do not take advantage of these benefits and they miss out on saving loads of money. Maximize your employee benefits by researching what your company offers and discussing your options with your family.And if you are going through your finances to determine how your employee benefits can best be utilized, make sure to take a look at your car loan. Is your APR a bit high? Are your monthly payments too steep? Auto Approve can help you to find competitive offers to save you money on your car loan.Get a quote today to see how much money Auto Approve can save you.GET A QUOTE IN 60 SECONDS

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

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

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

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