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If you are in your 20s (or even your 30s!), retirement probably feels a looooong way off. So starting a retirement account is probably not at the top of your to-do list. But starting a retirement savings plan early on is a great way to set yourself up for a successful retirement. No matter what your age is, now is the time to get serious about saving for retirement.Now is the perfect time to start saving for retirement, and these are our top four ways to get started.Why should I start saving for retirement early?With so many expenses in our day to day lives, you may be wondering why retirement is so important to prioritize. But starting early is the best way to ensure you will have a successful retirement. You can benefit from compound interestCompound interest will help you grow your retirement account more than anything else. When interest is compounded, the accumulated interest will earn you interest as well, not just the principal that you invest. This creates a snowball effect for your savings. If you initially invest $100 at 10% annually, it will be worth $110 by the end of year one. But in 30 years, even with no additional investments, it will be worth $1,744.94. And that’s the magic of compound interest.You can get into a good savings routineBy starting a retirement fund early, you can get into a good savings routine. Creating space in your budget for a retirement savings fund will make saving second nature to you. This also means that should an emergency come up and you take a few months off from savings, it won’t completely throw you off of your savings track. You will be more protected from market riskWhen you invest in retirement funds, you are actually investing in the stock market. While you have some control over the amount of risk that you are taking, the stock market is inherently slightly unreliable. But if you invest early, you will cushion yourself a bit. If you have any short term losses, you can ride them out over time.How much should I be saving for retirement?How much you save for retirement can vary from person to person. Experts generally suggest saving 10%-15% of your annual pre tax salary. If you are a higher earner, you should aim for closer to 15%. If you are a lower earner, you can aim for closer to 10% as Social Security may replace some of your income.But to get a more exact amount for your retirement savings goal, you can calculate your savings goal yourself.Calculate your expected expensesGo through your budget and come up with a rough estimate for how much you will need to live on each month. Start with your current budget, and estimate how much and what will change for you in the future. Then add on anything that you might want to do in retirement – if you want to join a country club or travel more, include that in your expenses. When you determine your monthly expenses, multiply by 12 to get your annual expenses. This will give you an idea of how much you will need per year to live comfortably. Depending on the age you plan to retire and your life expectancy, you can get a rough idea of how much you will need to save.Use a retirement calculatorA retirement calculator can help you determine if you are on track for savings. By entering your pretax income and savings, it can give you an idea of how much you will need and how far off you are from your goal.How can I start saving for retirement now?No matter what your goal is, the earlier you start saving, the better off you will be. So here are our top tips to start saving for retirement.Contribute to your 401(k) planIf your company offers a 401(k), you should start contributing immediately. If your plan allows you to contribute pre tax dollars, this can help you to build your nest egg much faster. And if your employer matches your contributions, that is essentially free money. So be sure to contribute at least as much as they are willing to match.Open an IRAAn IRA, or Individual Retirement Account, is another type of account that you may consider opening. There are two types of IRAs, traditional IRAs and Roth IRAs. A traditional IRA allows Investments in a traditional IRA may be tax-deductible, and the earnings can grow tax-deferred until you make withdrawals. You can access it at 59 ½ and it will be taxed as income upon withdrawal. A Roth IRA allows you to contribute after tax dollars that grow tax-free. You can make withdrawals at 59 ½ that are tax free and penalty free. In general, traditional IRAs are recommended for people who expect to be in a lower tax bracket when they retire, while Roth IRAs are recommended for people who are in lower tax brackets today.Find room in your budget to contribute moreGo through your budget and see if there’s any cutbacks you can make to start saving more money. Canceling unused subscriptions.Cutting back on dining out and entertainment.Buying generic brands at the grocery store.Refinancing your car loan (refinancing your car loan to a lower rate can loosen up a lot of money every month and make a big difference in your budget).Extra money that you save every month can be allocated to your retirement fund. You know how much money you want to save, so use that number to determine how much you should be saving every month or every paycheck.Consider delaying social securityFor every year you delay receiving social security, you can end up increasing the future amount you receive. Age 62 is the earliest that you can start receiving Social Security, but the more you delay this (up to age 70) the more you increase your future payments.Those are our top tips for starting a retirement fund.It’s never too early to start planning for retirement. The earlier you get serious about savings, the more of an impact it will have on your future. The key is to find extra ways to contribute to your fund and pick a fund that is right for you.An easy way to free up more money for savings is to refinance your car loan with Auto Approve. By refinancing your car loan to a lower APR, you could be saving hundreds of dollars per month. And all of this can add up to a more comfortable retirement. So if you are overpaying on your car loan (and believe us, you probably are) contact Auto Approve today to see how much we can save you.GET A QUOTE IN 60 SECONDS

Credit reports are incredibly important to our daily lives, whether we realize it or not. But far too many people do not regularly check their reports, and it can have negative effects on their financial wellbeing. Whether you want to buy a home, refinance a vehicle, or take out a new credit card, your credit score can make all the difference.Today we are talking about credit reports and why they are so important. Here are our top four reasons why you should check your credit report.Wait – what’s a credit report? And what’s a credit score?Before we get into why checking your credit report is so important, let’s first talk about what a credit report is. A credit report is a detailed account of a person’s financial history. It may include some of the following:A list of businesses and companies that have given you credit or loansThe total amount for each loan or credit limit for each credit cardYour payment history for each account, including the date and amount paidMissed or late paymentsA list of businesses and companies that have requested your reportYour personal information, including current and former names, addresses, and employersAny bankruptcies or other public record informationCredit scores are calculated using the information in your credit report. A credit score is a number between 300–850 that is calculated to depict a consumer's creditworthiness. The higher the score, the better. Credit reports (which result in credit scores) are incredibly important for our financial wellbeing. That’s why it’s important to check your credit report to make sure that you get the best financial opportunities possible.Let’s take a closer look into why checking your credit report is so important.#1: It will alert you to any errors or mistakesChecking your credit will alert you to any mistakes that may have been reported. Whether it’s a missed payment, late payment, or incorrect amount, these mistakes can chip away at your credit score.A study by the Federal Trade Commission found that 25% of people who regularly checked their credit reports found errors that affected their scores.Your report may even contain other people’s information, which is known as a mixed file. In this case someone else’s financial issues may directly impact your credit report.If you notice any mistakes or errors, it may take weeks if not months to sort out. Once you report an issue, the credit agency has 30 days to respond. The sooner you notice any issues, the sooner they can be amended and your score can be fixed.#2: It can help you detect fraud early onChecking your report will also help you determine if anyone has taken out any accounts in your name. If someone has made inquiries using your Social Security Number, it will appear on your credit report. Catching these issues early is key – the earlier you report this, the quicker the accounts can be canceled and your report can be repaired. The following warning signs may alert you to a fraud issue:Incorrect personal information. It can be a simple mistake, but it can also be an early warning sign of fraudulent activity.Unrecognized public records. Tax liens, civil judgements, and bankruptcies are all listed on your credit report. If you do not recognize one of these records on your report, investigate it further and report it. These can drastically impact your credit report and credit score.Unrecognized lender inquiries. Promotional inquiries and account review inquiries are nothing to worry about, but if you notice hard inquiries that are not familiar, you should investigate. Double check the names however before filing a complaint to make sure it was not authorized by a car dealership or mortgage broker who you are using.Accounts that you never opened. If there are open accounts that you didn’t authorize, contact the lender immediately to have the accounts closed and investigated.Increased credit utilization. If your credit utilization score suddenly increases while your spending habits have not, this may be a sign that someone is spending money on your accounts. Your score drastically changes. Credit scores change for a number of reasons over time, but if you notice any drastic swings, be sure to investigate more.If you do catch any fraudulent activity, be sure to contact the appropriate lenders as soon as possible and alert them to the situation.#3: It can save you moneyA good and accurate credit report means that you will have a good and accurate credit score. And having a good credit score is good for a number of reasons:Lenders will approve you for lower interest rates on credit cards and loansThe best lenders will be more likely to approve youLenders will give you higher credit limitsInsurance companies will give you better insurance ratesLandlords will approve you for rentals more easily You will have more negotiating power for loans and accountsSo what’s considered a good credit score? The following brackets can help you decide how your creditworthiness is ranked:800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor creditThe top rates are reserved for those with excellent credit and very good credit. The lower your score dips, the higher your interest rates will climb. All of this adds up to you saving money in the long run. Having a good credit score can help you secure a low car loan APR when you refinance your car loan. Better interest rates and payment terms can add up big over time. So it is vitally important to stay on top of your credit report and work to improve a bad credit score.#4: It’s free!The Fair and Accurate Credit Transactions Act of 2003 made it possible for you to check your report at each of the three major credit agencies – Experian, Transunion, and Equifax – for free once per year. This means that you have three opportunities every year to get a free credit report. Pulling your own report takes about ten minutes and is super easy for anyone to do. And despite what you may have heard, pulling your report does NOT hurt your credit.In addition to checking your credit report three times a year, you should routinely monitor your credit score. This will help alert you to any issues that may be worth inquiring about.And that’s why you should definitely be checking your credit report.By catching mistakes and errors you can help your credit score a whole lot. And a healthy credit score means that you can qualify for a low car loan APR when you refinance your car with Auto Approve. Get a free quote today and find out just how much you can save!GET A QUOTE IN 60 SECONDS

There is so much talk lately about loan refinancing. The market rates are low, yet they are expected to rise throughout the year, so the time to refinance is prime. But what do you need to refinance your car loan? What are the requirements, and if you meet the requirements, how do you go about refinancing your vehicle?Today we are talking about the requirements of car refinancing and how you can decide if a refinance is right for you.If you are interested in refinancing your car, it will depend on three major factors: your credit, your car, and your current loan.Refinance Requirement #1: Your CreditYour ability to refinance your car will depend heavily on your current credit score. Credit scores are designed to rate your likeliness of paying back a loan. Lenders are in the business of making money, so the last thing they want to do is give a loan out to someone who will not pay them back. Making sure you have a good credit score is incredibly important when it comes to refinancing your car loan. Credit scores take five main categories into account:Payment history (35%) Do you pay your accounts on time, or are your payments inconsistent and incomplete?Amounts owed (30%) How much money do you owe? How much money do you owe in relation to how much credit you have available to you? This is called your credit utilization ratio, and it should ideally be below 30%.Length of credit history (15%) How long have you had our accounts open for? The longer you have a history of having open accounts and consistently paying them, the higher your score will be.Credit mix (10%) How diverse is your credit portfolio? A healthy mix of loans, credit cards, retail credit cards, mortgages, etc will help show lenders that you can balance having varying accounts open.New credit (10%) Are you opening a lot of new credit lines? Are there a lot of inquiries on your credit score? A lot of new accounts can raise a red flag to lenders.The most important categories of your credit score are the payment history and the accounts owed. Together they make up 65% of your score. Focusing on improving these areas can help boost your credit score. And you definitely want to make sure your credit score is as high as it can be before you apply to refinance your car. Here are our top tips for increasing your credit score:Make on time payments. This will help improve your payment history section. Even just 6-12 months of on time payments can make a drastic difference in your score. Try setting up auto pay on accounts that have that feature so that you never miss a payment.Pay down debt strategically. Your credit utilization ratio takes into account your total debt to available credit ratio as well as your debt to available credit ratio for each account. This means that if you have a credit limit of $10,000 with a balance of $2,000, and another account with a credit limit of $2,000 with a $1,000 balance, you should prioritize paying off the $1,000 balance. Even though you owe less money on that account, your credit utilization ratio is 50%, as opposed to 20% on the other account. Paying down your debt strategically can help your credit score tremendously.Request higher limits. Requesting higher limits on your credit accounts will help to reduce your credit utilization ratio. Lenders usually take this initiative and raise the limits for you, but it doesn’t hurt to ask. This can have a significant impact on your score.Check your credit report. You can check your credit report three times per year for free, once from each of the major credit agencies. Request your report and cross check it with your credit payments and histories. Did some payments get misreported as missed or late? Do all of the balances on your accounts add up? Is your personal information correct? If there are any discrepancies, report them to the bureau. This will also give you a chance to ensure there are no unauthorized accounts opened in your name. If your credit score has dropped drastically since your initial financing, you may not qualify for refinancing. If your score has dropped a little since your initial financing, you may qualify, but not qualify for a good APR. Because of this, you want to make sure that your credit score is in the best shape possible before you apply for car loan refinancing. Refinance Requirement #2: Your CarLenders almost always have requirements on the condition of your car when you want to refinance. If your car is more than ten years old or has more than 100,000 miles on it, lenders may think it is too risky to refinance. The older your car is and the more miles it has on it, the more likely it is to have something major go wrong. Depreciation is a major concern for many lenders. If your loan is underwater, meaning that you owe more on the car than the car is worth, you will most likely not be able to refinance your car. Keep an eye on depreciation throughout the life of your car loan to ensure that you are not in this situation. Refinance Requirement #3: Your Current LoanThere are a few terms in your current loan that will dictate whether or not you are able to refinance your car loan: the time left on your loan, your current payments, and prepayment penalties. The Time Left on your Current LoanNew lenders often have requirements about how much time is left on your current loan. If there is less than a year left on your loan, lenders may not choose to approve you. Car loans are front-loaded amortized loans, meaning that the majority of the interest is paid in the beginning of the loan. This means that as the loan nears the end, you are paying less and less in interest and more and more in principal. At a certain point it is not worthwhile for a lender to refinance you, as they will not really be making any money off of you. But keep in mind that at that point it probably won’t make sense for you either, as you won’t really be saving any money.Prepayment PenaltiesYour current loan may have prepayment penalties that may make refinancing your car difficult. Check your current contract closely to see if there are any penalties. If it’s unclear, then call your lender and ask them outright. If the prepayment penalties outweigh any savings from refinancing, it will probably not make sense to refinance even if you do qualify.Your Current PaymentsStaying current on payments matters for your credit score, but it is also something that new lenders will check specifically. They want to ensure that you are up to date on payments with your current lender. If you are not paying your current lender in full with consistency, it’s probably not in their best interest to refinance your car loan. I meet the car loan refinancing requirements; now what?If your credit score is good or has improved, your car qualifies for refinancing, and your current car loan meets the above criteria, then you are probably wondering “how do you refinance a car loan?” The good news is it’s actually really simple!Step 1: Do Your ResearchLook around for a few different lenders that have good reviews. Look for a mix of traditional banks, credit unions, and online lenders. You will have to actually apply to get terms and rates for comparison, but you can do some of the legwork ahead of time and make sure their current customers are happy. If you want to save yourself a lot of hassle (and a lot of money!) contact Auto Approve and we can get the process started for you. We have relationships with hundreds of lenders across the country and can help get you the best offers. Step 2: Apply to a Few Different LendersThe application process is similar to your original car loan application. You will need the following to get started:A Photo ID, such as a passport or driver’s license.Your vehicle’s information, which may include the bill of sale, VIN number, make, model, and year of your car.Proof of income and financial history, which may include pay stubs, banking information, and your credit report.  Proof of residence, such as a mortgage statement, lease agreement, or utility bill. Proof of insurance. (Just think: if you use Auto Approve, we can handle all of these tedious applications for you!)Step 3: Compare Rates After all of your applications are submitted, you should start hearing back with different car loan APRs and terms. Compare all of the terms and see what offer is the best for you.Step 4: Sign and Start Saving MoneyOnce you have picked the best car refinancing option, sign on the dotted line and start seeing the benefits of refinancing immediately. (And if you use Auto Approve for your car loan refinancing, we even handle the boring DMV paperwork!)And those are the requirements of auto refinancing.So don’t wait any longer; get started with Auto Approve today and pay less monthly when you refinance your car loan!GET A QUOTE IN 60 SECONDS

We’ve all heard how fast cars depreciate. The second you drive them off the lot it is estimated that they lose about 10% of their value. But what about motorcycles? Do they depreciate the same way? Today we are talking about why motorcycles depreciate and how fast they depreciate in value.What is motorcycle depreciation?Motorcycle depreciation is the difference between how much your motorcycle was originally worth and how much it is worth currently. Depreciation happens to everything we own, from our cars and motorcycles to our computers and phones. The value of objects tend to decrease as they get older because they are more likely to break and become more out of style as time goes on. From the moment you buy a motorcycle or commit to a motorcycle loan and drive it off the lot, the value of your motorcycle will reduce, then continue to depreciate the more you drive and the more wear and tear your vehicle accumulates.When does a motorcycle depreciate the most?Like cars, motorcycles depreciate the most in the first two years. Motorcycles tend to lose 5% when they leave the lot, and then lose about 19%-27% by the end of year two. After the initial two years, motorcycles lose about 5% per year after that, up to year ten. After year ten motorcycle depreciation drops to about 2%-3%, as many owners don’t want to deal with the maintenance issues required by older motorcycles. Why do some motorcycles depreciate more than others?Motorcycle depreciation varies a lot from model to model. This depends on a number of factors.Production Numbers. The fewer of a certain model that were built and sold, the less they tend to depreciate. Since they are more rare, they will retain their value more.  Accident History. If the motorcycle was in any accidents, it will accelerate depreciation. Condition. If the motorcycle is well maintained, it will retain its value more. The more dents, scratches, and oil buildup the motorcycle has, the less it will be worth as years go on.Mileage. The more miles a motorcycle has, the less it will hold its value.Fads and Trends. If the motorcycle was trendy one year, it will most likely fade from the limelight and depreciate faster. If however the motorcycle was iconic for one reason or another (think the 1990 Harley Davidson Fat Boy from The Terminator), it may depreciate less as there will be a longer lasting market. There are many factors when it comes to motorcycle depreciation, but depreciation mainly boils down to how desirable the make and model is, and how well the motorcycle has been maintained. Do some brands depreciate faster than others?According to MotorcycleHabit.com, some motorcycle brands have a tendency of depreciating faster than others. Here are their fastest depreciating brands:Victory Motorcycles. They were discontinued in 2017, causing an increase in depreciation. Hyosung Motorcycles. They are depreciating quickly because they are a new brand and are not widely trusted yet. Until the brand has been around for a bit longer, they will depreciate at a faster rate.BMW Motorcycles. These depreciate quickly because the people who buy them tend to get new models every few years, causing them to depreciate quicker. Triumph Motorcycles. New models tend to depreciate quickly because they have struggled as a business throughout the decades. Honda Motorcycles. Honda motorcycles tend to depreciate more simply because they have very high production numbers, thus there are a lot of them on the market. This drives down their price and causes them to depreciate quicker than other brands.How do you calculate depreciation on a motorcycle?If you are looking to make a quick calculation on the depreciation of a motorcycle, you can follow the steps below.Determine the Original Cost of the MotorcycleHow much did you originally pay for the motorcycle? Whether it was new or used, find out how much you paid.Determine the Salvage ValueUse Kelley Blue Book or a similar website to estimate what your motorcycle is currently worth. You will need the make, model, year, and current condition of the motorcycle to give you an approximate value. Determine the Useful LifeHow many years have you had the motorcycle? Or how many years will you have had the motorcycle when you decide to sell it?Calculate the Motorcycle DepreciationTo calculate the depreciation you can use the following formula.(Cost of Motorcycle - Salvage Value) / Estimated Useful Life = Annual DepreciationLet’s plug in some numbers to see how this is done. Let’s assume your motorcycle initially cost  $13,000. You know that you will be able to sell it for $2,000 according to Kelly Blue Book, and you have had it for 8 years.(Cost of Motorcycle - Salvage Value) / Estimated Useful Life = Annual Depreciation($13,000 - $2000) / 8 years = Annual Depreciation($13,000 - $2000) / 8 = $1,375 per yearHow do you stop motorcycle depreciation?While it’s impossible to stop motorcycle depreciation completely, there are some steps you can take to reduce its effect.Reduce your mileageCutting back on driving is an effective way to curb depreciation. The less miles you put on your motorcycle, the less it will depreciate.Keep up on maintenanceMake sure to keep up on maintenance on your motorcycle. Regular oil changes, air filter changes, and shock replacements are just some of the routine maintenance you should keep up on. Keep your exterior clean and ding freeWash and wax your motorcycle regularly to protect the paint and keep the exterior looking as new as possible.Keep good recordsKeeping up on maintenance records is good practice in general, and can help increase your motorcycle’s value.How can depreciation affect your loan?If you took out a motorcycle loan to purchase your bike, depreciation is definitely something you need to be aware of. If depreciation occurs very suddenly, you risk becoming upside down in your loan, meaning that you owe more on your loan than the motorcycle is worth.Do your research before you buy your motorcycle to ensure that the model you are purchasing does not depreciate abnormally fast, and do what you can to control the depreciation through proper maintenance. That’s everything you need to know about motorcycle depreciation.Depreciation is an inevitable part of ownership, but it’s good to be aware of how fast and why your motorcycle depreciates in value. If you have a loan out for your motorcycle, you should look into motorcycle refinance today. Motorcycle dealerships rarely give good rates to consumers, so you are probably overpaying on your loan by a lot every month.Don’t risk an underwater loan; refinance today with Auto Approve to start saving money!GET A QUOTE IN 60 SECONDS

Refinancing your car can be a very beneficial move for you. But how do you know when the timing is right? Today we are talking about trends in the auto finance industry and how you can decide if refinancing your car loan is a good idea.Interest rates are lower than ever but going up soon, making auto refinance a great option if you act now.Is it smart to refinance a car loan right now?Let’s talk about the auto finance market for a minute.Four times a year Experian releases a State of the Automotive Finance report which outlines a number of statistics about how we purchase and finance our vehicles. In the fourth quarter of 2021, this report gave us some interesting facts.In Q4 2021, the average new car loan was $39,721. This is up from $35,421 in Q4 2020.In Q4 2021, the average monthly car loan payment was $644. This was up from $579 in Q4 2020.In Q4 2021, the average loan rate was 3.86%. This is down from 4.3% in Q4 2020. And this is down from 5.26% in Q4 2019.In Q4 2021, the average loan repayment period was 69.66 months. This is up slightly from 69.63 months in Q4 2020.There are a number of lessons we can glean from these numbers. First off, we are spending significantly more per vehicle purchase, upping our average price tage by over $4,000 in just one year. This is, not surprisingly, causing our monthly payments to increase significantly by over $60 per month. BUT it also means that interest rates are lower than ever. In one year the average loan rate dropped by over .4%, which is pretty significant in the world of auto finance. So what does this mean for someone who already has a car loan? Well, it means that your chances of finding a lower car loan APR are very good. And that can translate to saving you quite a bit of money.Let’s talk about some reasons that refinancing your car loan might be a good idea.What is a good reason to refinance a car?There are four main reasons why refinancing your car loan may be a good idea. You can get a lower interest rateAs we went over before, the market rates are down significantly. The average APR is down over .4% from 2020 and down over 1.4% from 2019. Even if your credit score hasn’t changed, you may qualify for a lower car loan APR.  If your credit score has increased since your initial financing, you could stand to get a much, much lower APR when you refinance. Your credit score may have increased if any of the following apply to you:You have made consistent, full, on-time paymentsYou have had a negative event expire (like a bankruptcy)Your credit limit has increasedYou haven’t had a lot of credit inquiriesYour credit utilization score has increased. This ratio is determined by adding up all of your credit card balances and dividing it by your available credit. This number should ideally be less than 30%Check your credit score and compare it to the score you had when you initially applied. If it’s either the same or better, you should look to refinance your car loan and get a lower car loan APR. You want to pay off your car fasterThe average repayment period for a new car is almost six years. This is a long time to have a loan on a car. Keep in mind that cars depreciate faster than most assets, and this makes it all too easy for us to become underwater in a car loan.If you are conscious of this, you may want to prioritize paying your car off faster. And refinancing your car can help you do this in the most money-conscious way. You can of course make extra payments on your existing loan, so long as they do not charge you prepayment penalties. But you can save much more money by refinancing your car loan to a lower interest rate and changing the repayment period. Interest rates tend to decrease when your repayment period decreases, and increase when your repayment period increases.Refinancing your car loan will allow you to lower your interest and pay off your car faster and more efficiently.You are having trouble with monthly paymentsIf your finances have changed for one reason or another, you may be having trouble making your monthly car loan payments. Refinancing can allow you to lengthen your repayment period, which will lower your car loan payments every month. It’s important to keep in mind that this usually means you will be paying back more money overall for the duration of the loan, unless you are able to drastically reduce your interest rate as well.You want to add or remove a cosignerAdding or removing a cosigner to your loan is a very common reason to refinance, whether the reason is personal or financial. You cannot simply add or remove a cosigner from your existing loan, so refinancing your car loan is your best bet to amend this.Adding a CosignerAdding your friend or partner to the loan can secure you a better interest rate and reduce your overall payments, since you will be splitting the monthly cost. The lender will consider your joint income and both of your credit scores when determining an interest rate. If times are tough for you financially, this might be a good option for you if you have a friend or partner who is willing to do so.You might also want to add your child as a cosigner to help them build their credit. It’s difficult to start building credit as a young person, and refinancing your car loan and adding them as a cosigner is an easy way to do so.Removing a CosignerRefinancing your car loan is also necessary if you want to remove a cosigner. Maybe you had a cosigner on the original loan because your credit wasn’t the best, but you don't need the help anymore. Maybe you were in a relationship that has now gone south and you need to separate from that person financially. Either way, refinancing your vehicle will allow you to sever that financial relationship.How soon is too soon to refinance a car loan?Refinancing your car loan sounds like a great idea, but when is the best time to do so? What should you consider when it comes to the timing of your refinance?You have to wait for the ink to dry If you either just bought your car or just refinanced your car loan, you will have to wait 60 to 90 days until all of the paperwork is filed and settled. There is no amount of time that you need to wait, you simply need to wait until the paperwork is complete so that you can restart the application process.Consider waiting 6-12 monthsAgain, there is no amount of time that you need to wait to refinance your loan, but you may find it to be more beneficial if you wait 6-12 months. Experts recommend this because it will allow you to make consistent, on time payments to your current lender, which will help your credit score and make you more desirable for prospective lenders. It will also give the new credit inquiries a chance to fall off of your credit report. All of this will give you a better chance of securing a lower car loan APR and making the car loan refinance loan worth it.Don’t wait until you have less than a year left on your loanIf you have less than a year left on your current auto loan, it will most likely not be worth it for you to refinance your vehicle. There’s also a very good chance that lenders will not want to refinance with you. This is because car loans are front loaded amortized loans, meaning that in the beginning of the loan you are paying mostly interest, and towards the end of the loan you are paying mostly towards principal. The earlier you refinance, the more money you will save in interest. And the earlier you refinance, the more money the refinance lender will make off of you. Waiting too long will make refinancing a waste of time for both you and the lender.And that’s why refinancing your car loan might be a great idea for you.Refinancing your car loan is a big decision, and Auto Approve is here to help. We have relationships with lenders from all across the country and can help you apply, sign, and start saving money today. Auto refinancing is our specialty, so you know you are in good hands with us. Don’t just take our word for it – our TrustPilot reviews show just how happy our customers are. So don’t wait, take advantage of today's low interest rates and refinance with Auto Approve today!GET A QUOTE IN 60 SECONDS

Refinancing your car loan can seem like a complicated and confusing process. But it is actually super simple and easy! Refinancing is when you take out one loan to pay off another loan.  But how do you know what the payoff amount will be?Here’s how to calculate your car loan payoff amount and refinance your car loan.How to Calculate Your Loan Payoff AmountCheck for Prepayment PenaltiesWhen determining your payoff amount, you need to check to see if your current loan has any prepayment penalties. Some do not have any fees associated with an early payoff, while others will have fees that are high enough to discourage refinance.Look carefully through your paperwork to determine what the penalties are. If it is unclear to you, call your lender and ask. Call or Go OnlineThe easiest way to calculate your total loan payoff amount is to go online or call your lender directly. Many lenders have calculators available so that you can pick a date in the future and calculate your payoff from then. You will most likely need to have your account number and your VIN available to log on to get this information. So be sure to have your information handy (your account number should be listed on your latest car loan statement).Do the Math YourselfIf you prefer, you can do the math yourself to get an estimate. Get out your loan contract and determine the total principal amount on your loan. Then you will need to calculate your interest payments. You do this by calculating your annual percentage yield (APY). You can use the formula below:APY= (1- rate per period)(number of periods per year - 1)This gives you the total cost of interest. You will need to add this to the principal amount of the loan. Then, subtract any payments you’ve already made. Add in any prepayment penalties, et voila, you have your total loan payoff amount. Payoff Amount = Principal + APY + Prepayment Fees - Previous PaymentsOne you have an amount, you can determine whether or not it is worth it for you to refinance your car loan.Is it Worth it to Refinance A Car Loan?So how do you decide whether or not it’s worth it to refinance your car loan? You already know how much it will cost you to pay off your existing loan, so now you need to determine how much your new loan will cost you. This will depend on the deals you are able to get for your refinance. Refinance offers are based on a number of factors, including market interest rates and your personal credit score. The higher your score is, the better chance you have to get a lower interest rate (and therefore save more money).Set yourself up for the best refinance offers by doing the following:Make Sure Your Credit Score is in Tip Top ShapeRequest a copy of your credit report and look for any inaccuracies. Cross check your report with your credit card and bank statements and be sure everything lines up. If there are any problems, report them to the credit bureau immediately. If your score is a little low, consider waiting a few months to refinance your car loan. Use this time to make consistent, on time payments and pay down any accounts that have a high credit utilization ratio (the amount of debt compared to your credit limit). Set up autopay on any accounts that have that option so that you don’t miss a beat. Make Sure Your Car QualifiesSome refinance companies will not refinance your loan if your car is ten years or older or has over 100,000 miles on it. Be sure your car qualifies before you get too deep into the refinancing process.Do Your ResearchResearch different lenders to get an idea of what terms and rates are being offered. Until you apply you will not have any solid number to use to calculate how much money you will save. But you can get a sense of what some offers look like, and you can see what their current customers are saying about them. Which lenders are transparent with their fees and payments? Who has good customer service? All of these things are important when decking who your next lender will be.Play Out Some Different ScenariosSince you will not have offers until you actually apply, play out a few different scenarios with a pad and paper. See what your payments would look like at 6% over 4 years, or at 5.5% over 3 years. This will give you a ballpark of how much money your new loan will cost you. It will also show you where your tipping point is: that is, at what point refinancing will not make sense for you.What is Needed to Refinance A Car Loan?When you are ready to refinance your car loan, you will need to have certain documents. Here are some of the documents you may be required to provide:A Photo ID, such as a passport or driver’s license.Your vehicle’s information, which may include the bill of sale, VIN number, make, model, and year of your car.Proof of income and financial history, which may include pay stubs, banking information, and your credit report.  Proof of residence, such as a mortgage statement, lease agreement, or utility bill. Note that PO boxes are not acceptable as proof of residence.Proof of insurance. Having all of these documents together and ready to go will help make the process of applying for refinance quick and easy.Use a Company that Specializes in Auto RefinanceUltimately, your best bet is to use a company that specializes in auto refinance, like Auto Approve. When you use a company that deals in auto refinance day in and day out, you know you are in good hands. We can help you easily apply and compare rates, and help you decide if refinancing your car will be worth it for you.But won’t it be more expensive to go through Auto Approve? Absolutely not! In fact, we NEVER add on to the rates from our lenders, we pass all of the savings on to you. Refinancing a car loan is easy when you are in the right hands.And that’s how to calculate your loan payoff amount and decide if refinancing your car loan is right for you.Don’t wait, get started with Auto Approve today. Get your free quote to see how much money we can save you on your monthly cay payment!GET A QUOTE IN 60 SECONDS

You’re gearing up to buy your new car and suddenly you have one more thing to think about; do you want an electric car or a gas car? A decade ago the choices were very limited, but now there are more options when it comes to electric cars. So if you’re undecided about what your next ride should be, we’re here to help. Today we are talking about the pros and cons of getting an electric car.Which is better for you, an electric car or a gas car?The difference between electric cars and gas cars is fairly simple. Electric cars are powered either solely or partially by electricity. They use a battery that stores the energy, and an electric motor starts the vehicle. Gas cars solely use gasoline as fuel. They use an internal combustion engine to start the car and stored gas to power the vehicle.What types of electric cars are there?First up, let's talk about the different types of electric vehicles that are on the market. There are three main types of electric cars. All Electric (Battery-Electric, BEVs). These vehicles use stored electricity as the sole means of energy. Examples of BEVs include the Chevy Bolt, Tesla Model X, and Volkswagen e-Golf.Hybrid Electric (HEVs). The vehicles use an internal combustion engine as well as an electric motor. They do not plug in to charge, but instead are charged by a regenerative brake system. These vehicles turn your car’s kinetic energy into stored energy. Examples include the Honda Civic Hybrid, Toyota Camry Hybrid, and Toyota Prius Hybrid.Plug-in Hybrid Electric (PHEVs). Just like the HEVs, they have both an internal combustion engine and an electric motor, but they can be plugged in to charge. These vehicles will run on just the battery until the battery is almost out, then it switches to gas as a source of fuel. Examples include the Chevy Volt, the Chrysler Pacifica Hybrid, and the Hyundai Sonata PHEV.Which will save you more money: electric or gas?This question is a bit complicated, as there are a lot of components to the cost of cars. If you're looking to save money on your car payment, there's a lot to consider. Upfront, electric cars tend to be more expensive. This is, however, trending downwards as more EVs enter the market. Let’s look at gas cars first. In 2022, gas prices are expected to hit a national average of $4.00 per gallon. This means that it will cost the average person with a 14 gallon tank about $56 to fill up their tank. Cars vary greatly in their gas efficiency, but the average car gets about 25 miles to the gallon. So for an average car, we can get a little over 330 miles to the tank. This averages to about $.16 per mile for a gas car. Now let’s look at electric cars. The average cost of a kilowatt-hour is $.1042 (10.42 cents). A standard electric car takes about 7.2 kWh/hour to reach a full charge of about 50 kWh. This means it costs about $5.10 to fully charge an EV. The standard range is about 250 miles for one full charge. This averages to $.02 per mile for an electric car. So it’s pretty clear that even with our estimations, a gas car will cost you much more money in fuel in the long run. On top of that, gas cars are often more expensive to maintain than electric cars. Transmission fluid, coolant, and motor oil are all expenses that you can avoid with an electric car. Looking to save money on your monthly car payment?If you already have a car but need a better rate, consider a car loan refinance. Interest rates are still low now, so it's a great time to get a free quote and see how much you could save.What are the advantages of electric cars?It is safe to say that electric cars will save you money in the long run. But what are some other advantages to switching to electric?Less EmissionsA great benefit of having an electric car is that it produces less emissions (zero emissions if your car is all-electric). If you are concerned about the environment, this is a huge advantage. More Energy EfficientElectric cars are more energy efficient than gas cars. EV batteries convert about 77% of energy into movement, while combustion engines convert between 12% and 30%. Tax CreditsThe government offers tax credits when you switch over to an electric vehicle, which can vary between $2500 and $7500. There are a few restrictions/conditions of the tax credit:You must own the car to receive the tax credit.You cannot simply buy an electric car in order to resell it.The electric car must be mostly used within the U.S.The manufacturer must be qualified.The battery must be able to store at least 4 kWh of energy.The battery must also be able to be charged by an external energy source. Lower Maintenance CostsSince there are less parts under the hood, maintenance costs are much less for electric cars. In essence, there is much less that can go wrong. They are composed of a motor shaft and little else, while gas cars have hundreds of moving parts. Plus you can skip out on oil changes and don’t have to worry about transmission fluids. What is the downside of electric vehicles?While electric cars have a lot of benefits, there are some considerable limitations.Less InfrastructureDepending on where you live, there might not be a good infrastructure for having an electric car. In bigger cities charging areas are common and can be found with little effort. But if you live in a rural area, it may be impractical to rely on charging areas. It is much easier to find a gas station than a charging station.Short RangeCompared to gas cars, electric cars have a shorter distance they can travel without requiring a charge. This makes it hard to do longer trips or take road trips.Long Charging TimeElectric cars can take a long time to fully charge. An electric car that needs a charge to drive 200 miles would take about 20 minutes of charge time, and that's with a DC fast charger. Other chargers can charge at a rate as slow as 14 miles of range per hour. Gas cars can be filled up with the snap of a finger. Car SelectionWhile we have come a long way in the last decade, there are still only about 30 different electric cars to choose from. This can be quite limiting, especially if you have a lot of other considerations in your car-buying criteria. And that’s what you need to know when deciding between an electric car and a gas car. Buying a car is very exciting, but it can also be very overwhelming. If you aren’t in the market for a new car because you still have an existing loan, consider refinancing your car loan with Auto Approve. We can help you save a ton of money. And who doesn’t want that?GET A QUOTE IN 60 SECONDS

Buying a new car is exciting, selling your old one may not be as exciting. There are two options you have as a car owner: selling your car privately or selling your car to a dealership. And while there are perks and downfalls to both options, selling your car privately will most likely give you more bang for your buck. Selling your car privately does require a bit more work on your end, but it will pay off in the long run.Here are our top tips for selling a car privately.Explore your optionsThere are two main options to sell your car: privately or through a dealership. Selling your car privately means you can charge whatever you would like, sell it on your own timeline, and essentially deal with the process yourself. If you go through a dealership, it is much easier and they will handle all of the legwork for you. You can even use the car as a trade-in and upgrade to something else. But you do not set the price for your car – they set it. And it is usually for significantly less than what you would get in a private sale. If your main goal is save on your monthly car payments, you could also consider refinancing your vehicle instead of selling. But that's for another article.Decided to sell privately? Make sure you take these important stepsHere are our top tips for selling your car privately (and making the most money).Understand and Research Your Car’s ValueValuing a car can be difficult, especially if you have an emotional attachment to it. It’s easy to think “this is the best car I’ve ever had, it’s worth at least XYZ”. But you need to keep your emotions and your expectations in checkThe best place to start your research is online. Look at a range of websites including Kelley Blue Book and Edmunds to see exactly what the market value of your car is. The values are based largely on the condition that your car is in. Assess your car’s condition honestly. The guide below can help you determine your car’s current condition.Excellent Condition. Your car looks new and is in excellent mechanical shape. It is rust free and has never had any body work or painting. The engine is clean with no visible defects or leaks. Your car also has a clean title history, will pass all safety and emissions tests, and has complete and verifiable service records. Cars in excellent condition are rare, making up about 5% of the used car market. Good Condition. Your car is free of major defects and problems. There may be some minor blemishes to the interior or exterior, but nothing major.Your car has a clean title history and there are no major mechanical issues. Your tires should match and have a good amount of tread on them. There should be little to no rust. To be sold at retail, your car will require minor reconditioning. Most cars for sale will fall into this category. Fair Condition. Your car has some mechanical or cosmetic issues. It needs some work done and may be in need of servicing, but your car is in reasonable running condition. There may be some rust damage and the tires may need to be replaced. The title history should still be clean. Poor Condition. Your car isn’t in good shape and is running poorly. Maybe there is extensive rust damage or a damaged frame. You may need to have an independent appraiser determine what the car is worth. Chances are your car is in good or fair condition depending on how old it is and how much you drove it. Take note of how many miles the car has and if there are any recurring issues. Then use the online tools to assess a fair market value for your vehicle.Prepare Your CarYou want to put your car’s best foot forward when preparing to sell it. It’s a good idea to have your car inspected by a mechanic to make sure there aren’t any issues of which you aren’t aware. This will give you a chance to make any necessary repairs before you even list the car for sale. In addition it’s a good idea to:Gather your service records.Give your car a good cleaning – inside and out. Maybe consider giving the car a wax or polish before taking pictures.Ensure all lights are working.Check the oil and other fluids.Check the tires.Have all of these things done before you even advertise that your car is for sale. You never know how fast your car may sell and it may be the difference of several hundreds if not thousands of dollars.AdvertiseOnce your car is in tip top shape, start advertising. Tell your family and friends and look for places online where you can list it. Facebook Marketplace and Craigslist are good free places to start. If you want to pay for advertising to reach a different sector of the market, you can try Auto Trader, EBay Motors, or consider taking out an ad in the local paper. Show Your CarOnce people start contacting you about your car, they will most likely want to see the car and possibly take it out for a test drive. It is recommended that you meet in a public space and that both parties have an extra person with them for added safety. If they would like to take a test drive, ask to see a photo ID and take a picture of it with your phone, and assure them that you will delete it when you are done. Be sure to ride with them, bringing your friend or family member if it makes you more comfortable. Seal the DealIf the buyer is happy and you agree on a price, secure payment as soon as possible. Have them pay with cash or a cashier’s check, which is more secure than a personal check. Make sure you have a full payment in your hands before you hand over the keys. You will then need to finalize all of the paperwork.Get your car's paperwork in order before you sellWhen you sell your car, you must have the title of the car. All other paperwork will depend on your state and can vary. The Car’s TitleFirst and foremost you will need the title of the car, and you must make sure it’s in your name. If your car is still under financing, you will need to pay off your vehicle in full before the deal can be finalized. The title will show a lien if you do not own the car outright.If your car suffered from certain types of damage, you may need to get a title brand from the DMV. A title brand is a permanent note on the title that will alert any prospective buyers about your car’s condition. If your car was in a flood or salvaged, you may need to get this brand. Failure to do so may result in a fine or other penalties.Warranty Information (If Applicable)If your car is still under warranty, check to see if it’s a transferrable warranty. This may help you to negotiate a better price on your car. As-Is DocumentationThis is not required, but might be a good idea for you to consider. As-is documentation outlines the condition that the car is in. This paperwork will ensure that the new owner acknowledges and accepts all future responsibilities with the car. It essentially says that the previous owner has disclosed all information and the new owner accepts the car as-is.Odometer DisclosureThe Truth in Mileage Act, which is a federal law, states that all owners must disclose the odometer reading of the car they are selling. You must do this if the car is less than ten years old and up to 12,000 pounds. Check with your state to determine exactly what you must include, but an odometer disclosure typically includes the VIN, make of the car, model of the car, year, the buyer’s name and address, buyer’s signature, seller’s signature, current mileage, and a notary seal.Bill of SaleA bill of sale is not required, but it is a good idea. A bill of sale outlines the buying agreement and typically includes a vehicle description, odometer reading, purchase price, and signatures of both the buyer and the seller. A bill of sale can absolve you from any future liability issues that may arise.And that’s everything you need to know about selling your car privately. Selling your car privately can be a hassle, but it can certainly be worth it in the long run. Follow our tips for selling your car and make sure you get top dollar for your car.If you aren’t looking to sell your car, but are looking for some extra cash, consider refinancing with Auto Approve. We work closely with lenders across the country to get you the best rates possible, which can translate to huge savings. So don’t wait – get your free quote today!GET A QUOTE IN 60 SECONDS

When you are young, it’s easy to feel overwhelmed by money decisions. On one hand, you might be out on your own for the first time and have a lot of expenses (maybe more than you anticipated). But on the other hand, you know that how you handle your money now can have big implications for your future.While it may seem like a lot to think about, it’s true that the decisions you make now will affect every aspect of your financial future. Do you hope to have a family? Do you want to retire early? Do you dream of a vacation home? Getting into good financial habits early will help you plan to live the life you want.So today, we are talking about the 6 best money moves you should make before the age of 25. Make a budgetMaking a budget is a simple task that can have long lasting effects. All it takes is some time and discipline, and you can set yourself up for a good financial future. Here’s what to do:Determine your incomeYour first step is to determine how much money you are bringing in every month. 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.Determine if you have any other income coming in every month. This could be from a side business, from rent you receive – anything that gives you some extra spending money. Determine your expensesOrganize all of your monthly expenses into a spreadsheet. You will need two categories each month, fixed costs and variable costs. Fixed costs are your monthly expenses that do not change and are the same amount every month. Fixed expenses can include rent/mortgage, your car payment, cable bills, internet, etc.  Variable expenses are expenses that change from month to month. Variable expenses can include groceries, your electric bill, dining out, etc. To determine average variable expenses, go through your credit card and bank statements from the past six to eight months and come up with averages for each category.  Budget your needsDivide your expenses, both variable and fixed, into needs and wants. What do you need to survive and what is a luxury? Divide them up and take a look at each category.  Determine where there is wiggle room. For example, rent and groceries are both necessities. You can’t change your rent payments, but you can adjust your grocery bill. Decide on a fair budget for your needs. Budget your wantsLook at your spending in your “wants” category. This is where you have the most room to adjust. See what you can get rid of to free up extra room in your budget. Little changes here and there will add up to big savings over time. Make a planNow you need to determine how you want your finances to be allocated. Many advisors recommend a 50/30/20 model for personal budgets. This means that 50% of your income is allocated for needs, 30% is allocated for wants, and 20% is put into savings. You can adjust these numbers based on your situation, but aim to always have some money allocated into savings. See how your current expense allocation looks. From there, determine where you can make adjustments. Canceling some streaming services or refinancing your car loan can free up a good amount of money every month. Decide on a budgeting plan that your plan is realistic 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.Check your credit score and credit reportGet in the habit of checking your credit score regularly. Having a good credit score will make everything in your financial life easier. The top benefits include:Lower interest rates on credit cards and loansBetter chance for credit card and loan approvalHigher credit limitsBetter insurance ratesEasier approval for rentalsMore negotiating power for loans and accountsYou can check your credit report for free up to three times per year, once from each of the big three credit bureaus. Be sure to take advantage of this to monitor for any inaccuracies. Here’s what you should keep an eye on:Identifying Information. Your name, address, social security number, date of birth, and phone number. Make sure everything is accurate.Credit History. Look at all open and paid credit accounts, like credit cards, mortgages and loans. Check on any accounts that are shared with someone else. Look at total loan amounts, remaining loan balances, late payments, and check to see if any accounts have been sent to collections. Public Records. Ideally this section will be blank. This is where bankruptcies and judgments would be listed.Inquiries. Check to see what companies have requested your credit report. If anything looks incorrect or amiss, contact the credit bureau to report it. It may take up to 30 days to receive a response, but you want to ensure any mistakes are corrected. In addition to ensuring that your credit score and personal information is accurate, checking your credit report will also alert you if anyone has been opening accounts or conducting business in your name.Increase your credit scoreCommit early in your financial life to increasing your credit score. The most important factors to your credit score are payment history and credit utilization. So be sure to prioritize making full, on time payments and keep your credit utilization ratio below 30% – this means that your total debt is less than 30% of the total credit you have available to you.Start an emergency fundEmergencies are by nature unpredictable. You never want to be caught off guard without a financial safety net. The earlier you start this, the better off you will be. Depending on your situation, your emergency fund goal may vary. But no matter what your goal is, you want to use the budget you created before to allocate money to your emergency fund. If you never touch this money – great! Then it’s tuckered away safe and sound, possibly earning a little interest along the way. But if you do need it for an unforeseen medical emergency or damage to your house, you have the resources to help yourself.Refinance your loansLike a lot of young adults, you may have gotten roped into a few less-than-ideal financing situations. If you bought a car when you were younger, you probably didn’t have a stellar credit score. And it’s hard to get a good interest rate when you have virtually no credit to your name. As time has gone on and you have built more and more credit, you have probably qualified for a better interest rate than you did when you initially applied for financing. That’s why you should look into refinancing your loans, especially your car loan.Refinancing your car loan can help you in a lot of ways:You can secure a lower APRYou can change your repayment periodYou can add or remove a cosignerThe earlier you refinance in the life of your loan, the more money you will save. Check out Auto Approve today to see how much money you could be saving!Start saving for retirementThe earlier you start saving for retirement, the more comfortable your retirement will be. Even making small contributions to a tax-favored retirement account in your early 20s can add up to big money. Open an account that is geared towards retirement, such as an individual retirement account (IRA) or a 401(k). This way you can defer paying taxes on this money – this means there is more money in the account to earn interest on.If your employer offers to match any contributions to your retirement, be sure to take advantage of this. This is essentially free money.To emphasize how beneficial it is to start saving for retirement early, let’s look at an example. If you were to save $4,500 per year over 45 years of working, you would have over one million dollars by the time you retired. If your money was matched dollar for dollar by your employer, you would only need to contribute $2,250 per year. That’s less than $200 per month that would enable you to comfortably retire. Isn’t that worth it? So get started while you are young enough to have that money work for you.And those are our top 6 money moves to make before you are 25.Commit early to prioritizing healthy financial moves. The earlier you start a responsible budget and savings plan, the earlier you will reap the rewards. And if refinancing your car loan can help you reach your goals, be sure to contact Auto Approve today. We can help you save money every month so that you can make your money work for you!Get started with Auto Approve with a free quote!GET A QUOTE IN 60 SECONDS

You’ve probably heard the term APR tossed around a lot. But what does APR stand for, and what is the difference between interest rate and APR? While these terms are similar, they are not exactly the same. Today we are talking all about interest rates, APRs, and how they are calculated.What is the difference between interest rate and APR?Interest rate and APR are often used interchangeably in the car loan industry, but they are not exactly the same thing. An auto loan’s interest rate is the cost of borrowing money every year, expressed as a percentage. It does not include any fees that are charged for the loan. An auto loan’s APR (Annual Percentage Rate) is the cost of borrowing money every year, expressed as a percentage, including any associated fees.So while they are similar, they are not exactly the same. The APR is considered to be a more accurate measure of the cost of the loan, as it takes all of the fees into account as well. The Truth in Lending Act requires lenders to disclose all loan terms and fees, so they are obligated to alert you to anything that you are responsible for paying. Since all lenders must disclose the APR, it is a valuable tool for comparing loan terms.Note: Be sure that you are always comparing APR to APR, not APR to interest rate. You always want to compare apples to apples.Here’s how to calculate APR on a loan.A car loan APR is calculated using the interest rate that you are offered. Here are the basic steps to calculate APR on car loans.Determine the interest amountAdd any administrative fees to the interest amountDivide by the principalDivide by the number of days in the loan termMultiply by 365 (one year)Multiply by 100 to convert to a percentageIn other words, here is the APR formula:APR = ((Interest + Fees / Loan amount) / Number of days in loan term)) x 365 x 100Let’s put this to use. Math class is in session! For example, say you are borrowing $20,000 to finance your new car. You have a 5% interest rate and a four year loan period. The closing costs on your loan are $700.Principal (P) : $20,000Interest Rate (R) : 5%Time (T) : 4 years The interest on the loan can be found with the formula:Total Amount Accrued = Principal (1+Rate x Time)Total Amount Accrued = 20,000 (1+.05 x 4)Total Amount Accrued = 20,000 (1.2)Total Amount Accrued = $24000So now we know our total amount accrued is $24,000, and our accrued interest $4,000 (Total Amount- Principal Amount). Now we can put all of this in our APR formula.APR = ((Interest + Fees) / Loan amount) / Number of days in loan term)) x 365 x 100APR= ((4000 + 700)/20000) / 1460 x 365 x100APR = 5.875 %So while your interest rate is 5%, your APR is actually 5.875%. This number more accurately represents the cost of your car loan.How are car loan interest rates determined?While the car loan APR is what you should be comparing, this number is based on the interest rate that you are offered. But how are car loan interest rates determined? Why do these rates vary from person to person?Car loan interest rates are determined by both market factors and personal finance factors. Market FactorsCar loan interest rates depend in part on how the economy is performing. Interest rates are set by the Federal Open Market Committee (FOMC). If the committee determines that spending needs to be encouraged, it will lower interest rates to do so. We are still in the middle of an unprecedented economic wave following the pandemic, and interest rates are still remarkably low (which is why right now is the perfect time to refinance your car loan). Market rates are expected to increase as the year goes on, so it’s best to refinance your car as soon as possible to take advantage of these low rates.Your Credit Score and HistoryYour credit score is the most important factor in your car loan interest rate. Credit scores are the biggest variable from application to application. Your credit score takes into account the following categories: Payment History. Do you have a history of on time payments? Have you missed payments in the past? Lenders want to be sure you will pay back your debt on time. Amounts Owed. How much money do you owe? The amount of money you owe, your debts, are used to calculate your credit utilization score. A credit utilization score below 30% is considered desirable for lenders. Credit History Length. How old are your accounts? Having older accounts and a longer credit history is more favorable to lenders. Credit Mix. Do you have a mix of different types of accounts and debts? A good mix might include a mortgage, auto loan, student loan, and credit cards. This indicates to lenders that you can manage your money across multiple accounts. New Credit. Do you have a lot of hard inquiries on your credit? Do you have some brand new debts? These might be considered liabilities by lenders.Your IncomeIn addition to your credit score, lenders will also look at your income and your debt-to-income ratio. If you are carrying too much debt, the lenders may only offer higher car loan interest rates as they consider you to be a riskier candidate.The Loan TermIn general, the longer the loan term is, the higher the interest rate you are offered will be. Lenders will offer lower rates for shorter terms. This means that if you select a longer lease period, you are not only paying a higher car loan interest rate, but you are paying it for a longer period of time. This means you will end up paying a lot more money overall by selecting a long repayment period.How can I get a lower APR car loan?If you are looking to either secure a new car loan or refinance your car loan you are probably wondering how you can get a lower APR car loan. And the good news is there are some steps you can take to increase your chance of securing a good car loan interest rate.Step 1. Get Your Credit Report and Review for ErrorsContact one of the major credit bureaus (Equifax, Experian, and TransUnion) to get a free copy of your credit report. You can get your report from each agency for free once per year. Review your report carefully and look for any inconsistencies. Are the dates of opened accounts correct? Are the balances on each account accurate? Is your payment history correct? Make sure that all credit limits are up to date and that all personal information is accurate. If you notice any errors, report them immediately. Step 2. Request Higher Credit LimitsThe higher your credit limits are, the lower your credit utilization ratio will be. This compares the amount of money you owe to the amount of money available to you. Lenders will often increase your limits throughout the years when they review your information, but you can also try requesting a higher limit and see if they will oblige. This will help your score as soon as it is reported to the credit agencies.Step 3. Keep Your Credit Balances Below 30%Keeping your balances to less than 30% of your available credit will help your credit score greatly. This will lower the credit utilization ratio we discussed above. The highest credit scores often use less than 7% of their available credit, so keep that in mind when you are looking at your accounts. Working to keep a low credit utilization ratio will help your score immensely. Step 4. Commit to On Time PaymentsMaking consistent, full, and on time payments will help your score a lot. Sign up for autopay if you are able to, or set an alert on your calendar if you have a tendency to miss payments.Step 5. Shop Around and CompareThe car loan interest rates that you are offered will vary greatly from lender to lender, so you really want to prioritize shopping around. If you are looking to refinance, you are in luck – Auto Approve makes shopping around and comparing incredibly easy. We have relationships with lenders all across the country and can easily help you apply to a number of lenders and compare their offers instantly. Think of us as your partner in saving money, because we never mark up our rates. We just pass the savings on to you.That’s everything you need to know about interest rates, APRs, how they are determined, and how you can get the lowest rates.Now that you know all about car loan interest rates, you are probably keenly aware that you are overpaying on your loan every month. But you can escape your bad loan terms, and Auto Approve is here to help! Don’t wait any longer to start saving, get your free quote today!GET A QUOTE IN 60 SECONDS