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When you decide the time is right to buy a new car, it’s easy to get carried away. With so many makes, models, and exciting new features available today you can feel like a kid in a candy store. But there’s one factor that can jam the brakes pretty quickly on your big hopes and dreams: your budget.Keeping your budget in mind is incredibly important when deciding what car is right for you. But how do you know how much you can actually afford? Let’s talk about how much car you can afford (and how you can get the best deals possible!)How much car can I afford?When determining how much car you can afford you need to carefully consult your budget. That means all of your incoming money and all of your outgoing money. There is a general rule that you should not spend more than 20% of your monthly income on transportation expenses.That may sound pretty cut and dry, but that 20% of your income doesn’t mean that you can spend 20% on your car payment alone. That number includes:GasParkingMaintenanceInsuranceOther car related expensesWhile it’s hard to predict every expense, you should have a rough idea of how much gas you go through, how much your insurance will be, and whatever other expenses you may have. If you have a monthly income (take home income, not your salaried amount) that is $4,000, your monthly car expenses should not exceed $800. If you spend $100 on gas, $100 on insurance, and $100 on other expenses, your monthly car payment should not exceed $500.Your car payment will depend on three main factors:The price of the car. The less expensive your car is, the less your monthly payments will be. This price is dependent on the make, model, trim level, and other features you may want in your car. The car loan APR you are offered. The car loan APR you are offered will be based on your credit score, the market rates, and other factors. Your repayment period. The shorter your repayment period is, the higher your monthly payments will be. But this also means you will end up paying less in interest over the life of the loan.Before you go shopping for a new car you should have a good idea of what type of car payment you can afford. While you can negotiate on the price, the APR, and the repayment period, you want to be sure you do not get in over your head with a car payment that you cannot afford.What do lenders look for?Your car loan payments will depend largely on the type of financing you can secure. When applying for a car loan, lenders will look at the 5 c’s of credit. These characteristics help them decide how credit-worthy you are. The car loan APR that you are offered will be based in part on these factors. Together they paint a picture of how risky your loan is.CharacterYour character refers to your credit history and how well you have managed your debts previously. Lenders will look at your credit report to determine whether or not they think you are an eligible candidate for a loan with a good APR. The best thing you can do before applying for a car loan is work to improve your credit score.CapacityCapacity refers to your ability to repay the loan. Lenders look specifically at your debt to income ratio. You can calculate your debt to income ratio by adding up your monthly debt payments and dividing that by your pre tax income. Multiply that by 100 to get a percentage. Experts recommend that this number be below 36% for homeowners and below 20% for renters. This number tells lenders whether or not you have the means to repay the loan you want.CapitalCapital refers to the amount of money you will actually put down as an investment on your loan (a down payment). The larger your down payment is, the more favorable your terms will be.CollateralYour collateral is what you will lose should you fail to repay your loan. Your new car is the collateral for a new car loan. When there is collateral the loan is referred to as a secured loan, which is less risky for a bank than an unsecured loan. Secured loans tend to have more favorable terms.ConditionsConditions refer to any other factors that may affect your loan, such as the prevailing market rates.How do I find the best price for a car?If you know how much you can safely afford for a car payment every month, you can roughly estimate the market price of the type of car you can afford. But the lower you can get this number, the better off you will be every month when making your payments.When it’s time to buy a car, follow our steps below to ensure you get the best deal possible.Step 1. ResearchDoing your research is essential when it comes to buying a car. Not only do you need to figure out how much you can truly afford to spend every month, but you need to figure out what a fair price is for the car you are interested in. Checking Kelley Blue Book and Edmunds can give you an idea of what a fair price is for the car you are interested in.Step 2. Be FlexibleWhile we all have our dream cars and dream features, it’s important to be flexible when shopping around. This is especially important in today’s car market where there are shortages and increased price tags. Having an open mind will help you find a car you love for the right price. Step 3. Look for DealsLook high and low for any deals that might be out there. You should look around at a number of different dealers and compare pricing, and then compare those to online dealers. There are a lot of online dealers, including:AutotraderCars.comCarsDirectCarvanaEnterpriseTrueCarVroomIf nothing else, having other numbers for comparison can help you negotiate at a dealer.Step 4. Get Pre ApprovedGetting preapproved for your car loan before you even set foot in a dealership is a great idea. It will give you more leverage when you visit the dealership and will also help ensure that you stay within your budget. You can also shop around ahead of time for a reasonable rate, which is always a good idea.Step 5. Avoid the Add OnsIt is incredibly easy to get talked into add-ons and features that will drive up the price of your car significantly. Anti theft devices, window tinting, key protection, paint and fabric protection, all season floor mats, and wheel locks are just some of the features they may offer to you. While some of these may be worth it to you, keep in mind that they will increase your car’s total price by thousands of dollars. It’s a good idea to prioritize which features might actually be worth it to you, and which are less important. When you see the price tag you can determine if the extra money is worth it. Step 6. Negotiate What You CanWhen you are buying a car there are a number of places where you can negotiate to get the best terms possible. First, you should always negotiate the market price. If you can prove that you can find the car at a lower price elsewhere you will be more likely to get a good deal. You should always be willing to walk away from a bad deal, so don’t let your emotions get the best of you.Additionally you can negotiate any fees that might be tacked onto your car purchase. There are a number of added fees you may be expected to pay when you buy a car. These may include:Documentation feeAdvertising feeShipping feeDealer feeThese are easy places for the dealership to make a deal with you, so if nothing else be sure that they cut some of these extra fees.That’s how you can determine how much car you can afford (and how you can get the best deal possible).Buying a car is a big deal, but being prepared can help ensure that you get a good deal. Doing your research, getting preapproved, and negotiating your car’s price are just a few small steps that can save you thousands of dollars.If you are having trouble keeping up on your monthly payments for your car, refinancing can help you get your payments down to work within your budget. By refinancing to a lower car loan APR or changing your repayment period you can reduce your car loan payments by hundreds of dollars per month. Sound good to you? Get in touch with Auto Approve today to find out just how much you could be saving every month!Get your free quote today!

Few things can financially drown someone faster than credit card debt. And with today’s record inflation, it’s even easier to overextend yourself. A study from the Federal Reserve Bank of New York found that 15% more people were in credit card debt in the third quarter of 2022 compared to the third quarter of 2021. With the Fed’s December announcement that interest rates would be increasing again, this doesn’t show signs of slowing down. But getting out of credit card debt can happen. It isn’t an easy task, but there are a number of steps you can take to get out of your current financial woes.Here are four ways you can pay off credit card debt.Use the Avalanche MethodThe avalanche method is one of the most popular–and quickest–ways to get out of credit card debt.  You start by making a list of all of your debts and organize them by interest rates, with the highest rates on top and the lowest on the bottom. Every month you pay the minimum on all of your accounts, and put all of your extra money towards the top debt (the one with the highest APR). Once that debt is paid off, you allocate your extra money to the loan with the second highest APR. This method is widely used as it will save you the most amount of money in interest by prioritizing your debts in this way. This also means that you can pay off your debt in less time. Use the Snowball MethodAnother popular method for getting out of debt is called the snowball method. This method calls for you to list your debts and organize them by their size. The smallest amounts are at the top of the list, and the highest amounts are at the bottom of the list. Again, you will make the minimum payment on all accounts and then allocate all of your remaining money to the smallest debt at the top of the list). When that is paid off you move on to the next smallest debt, and so on and so forth. This is an excellent method for people who are motivated by small successes and can find extra motivation in paying off some of the easier debts first. It will not save you quite as much money as the avalanche method, but if you feel overwhelmed by the sheer volume of accounts you have, this may be a great motivator for you and relieve some of the added pressure.Create a Solid BudgetIt is incredibly difficult to pay off debt if you do not have a plan in place. A monthly budget is a great way to get a firm hold on your expenses and find where you can make adjustments to your financial way of life.Start your budget by creating a list of all of your expenses, both variable and invariable. Account for everything that you pay for over the course of one month. Variable costs may include:GroceriesElectric BillParking FeesDining OutEntertainment/ AttractionsHome Maintenance and RepairsFor these costs that change every month, try to calculate a few months totals and average them out. Your invariable costs do not change from month to month and can include:Rent or MortgageCar PaymentCable BillInsurance PremiumTrash CollectionInternetPhone BillProperty TaxesChildcare ExpensesStudent Loan PaymentsStreaming Services (Netflix, Hulu, Amazon, Etc)Now list all of your income in one month. Your paycheck (the take home total, not your salaried amount), rental incomes, dividends–anything that makes you money. Comparing your incoming with your outgoing will give you a sense of how healthy your budget is. Where are you overspending? Where can you cut back? Making changes to your monthly budget can result in a lot of extra cash in your pocket, and that’s cash that can be going directly to your credit card debt. Here are some of our favorite ways to save money on monthly expenses:Switch to generic groceries. Brand name groceries are significantly more expensive, so consider buying the store brand to save some extra money.Cut down your streaming services. Do you really need all of the services that you are signed up for? Think about canceling one or two (or splitting the cost with friends)Refinance your car loan. You can save a lot of money every month by refinancing to a lower car loan APR. You can also change your repayment period when you refinance, and lengthening your repayment period can lower your monthly payments significantly.Refinance your mortgage. If you own a home, refinancing your mortgage can cut down your monthly payments.Evaluate your insurance. Look at your car insurance policy and see if you qualify for any savings programs. Dropping to a different tier of coverage can also save you a significant amount of money every month.Cutting your expenses here and there can add up to a lot over the course of a month, and that can really help you get out of the debt you are in (and help you avoid getting into more debt).Consider ConsolidatingIf you have multiple lines of credit with high interest rates, debt consolidation may be your best bet to get out from under it. You can DIY your consolidation if you have good credit and qualify for a 0% APR balance transfer credit card. You can then use this card to pay off all of your other debts so that all of your debt is housed under one credit card. So long as you pay off this balance before the promotional 0% APR expires (typically 12-18 months), you will save yourself a lot of money.If your credit is less than stellar, a 0% APR balance transfer credit card is probably not in the cards. But there are other options. You can take out a home equity line of credit and transfer your debt there (so long as the APR is lower than your credit cards). You can also take out a debt consolidation loan designed for these situations. If you have multiple accounts that you struggle to keep up with, debt consolidation is an excellent option to save you money and make your life a little easier.That’s how you can get out of credit card debt in 2023.While it can feel overwhelming, credit card debt isn’t an uncommon situation. Makes 2023 the year of financial freedom by following our steps to getting out of credit card debt. Refinancing your car loan is a great way to free up some money every month, so call Auto Approve today to see how we can help you!Get your free quote today!

If money is tight every month but you need a new ride, you may be wondering which is better for you: leasing or financing. Deciding between leasing and financing will depend on a lot of factors, but a major factor is how much the monthly payments will be. Here we will discuss the difference between lease payments and finance payments and how you can decide what is right for you.Here’s the difference between lease payments and finance payments and how you can decide which option is right for you.What is the difference between a lease and finance?When you lease a car you are essentially renting the car from the dealership. You do not own the car, but you can use it for a set period of time. During that time you must obey the rules of the lease agreement. But it’s important to keep in mind that the dealership owns the car while you are using it, which is referred to as the lease term.When you finance a car you are buying the car from the dealership using a loan. The dealer sells the car to the bank, who will hold the title until you pay off your loan in total. While the title is held by the bank, you are considered the owner and can use the car however you would like.Are lease payments higher than financing?Lease payments are lower than financing payments because you do not own the car and are not making payments on the whole car. Instead you are making payments on the depreciation that occurs while you own the car. If your lease is for 36 months, you are paying for the depreciation that occurs in that time.Every lease will have a residual value listed. This is the expected value of the car at the time when your lease is over. The residual value is non-negotiable and is based on the car’s expected depreciation during the lease period. Since the dealer cannot control how the car is used exactly, they put parameters on your usage to help protect their asset and ensure that it will still have value at the end of the lease period. These parameters include: Mileage limitsFees for wear and tearTravel restrictions (typically cannot drive out of the United States to Canada or Mexico)No allowable customizationMust use OEM parts and licensed mechanics for all repairsStricter insurance requirementsAnd moreThe usage parameters will help ensure that the depreciation is predictable and that the car will still have value when the lease is over. In addition to the depreciation on the car, your lease payment will include a finance charge, which is essentially the cost of doing business. And, of course, tax. Total Monthly Lease Payment = Monthly Depreciation + Finance Charge + TaxFinance payments are more because you are paying on the total value of the car, not just the depreciation over a few years. Total Monthly Finance Payment = (Price of the Car - Down Payment + Total Interest on Loan)/ TermWhen you finance, the sales tax will be calculated upfront and rolled into the price of the car (unless you choose to pay it with your down payment). Financing a car will be much more expensive per month than leasing. But that doesn’t necessarily mean that leasing is a good thing (or a bad thing). It really just depends on your preferences and financial situation.Is it better to lease a car or to finance a car?The advantages of leasingThere are a lot of advantages to leasing a car. As we already went over, it is much cheaper to lease a car than to finance a new car. And you are often not required to put money down when you lease a car, which can be a huge factor for many. Leasing a car also allows you to get a new car every few years with no hassle. You don’t need to worry about getting rid of your old car; you can simply trade it in and get a new car when your lease term is over.If you are a business owner or are self employed, leasing a car also provides more tax benefits than financing does. Leasing a car allows you to write off both the depreciation costs and the financing costs, which is usually more than you can write off when you purchase a car.The advantages of financingLeasing can be great for many people, but there is one major disadvantage: you do not own anything when your lease period is over. Just like when you rent an apartment, your payments are not creating equity. You are paying to use something and you will have nothing to show for it when the lease period is over.Additionally, financing your car doesn’t come with the strings that leases come with. When you finance a car, you can treat it like your own (even though the title isn’t technically in your name yet). You do not need to worry about mileage limitations, restrictions on where you can drive, or what customizations you can make. Your car is yours to do as you please.Financing can also be easier to qualify for than leasing. If your credit is less than stellar, you may not be offered a great car loan APR, but you will most likely be able to find a lender that will work with you. This is not as true when it comes to leasing a car. If you do not have good credit, dealerships may simply refuse to lease a car to you.That’s the difference between lease payments and finance payments.Leasing a car can be a great option for many people. And the good news is that you can still buy your car if you end up changing your mind. Most leases will allow you to purchase your car at any point during the lease for the price of the residual value (plus any remaining payments you have). Today’s used car market is still booming, which means that the market value of many people’s cars is actually much higher than the residual values listed in their contracts. So even if you don’t love your car, chances are you can buy out your car lease and make a good profit on it.Auto Approve specializes in car lease buyout loans, making this process incredibly easy. So if you have a leased car that you just aren’t ready to part with (or that you want to make some money on!), contact Auto Approve today to get a free quote!CONTACT AUTO APPROVE TODAY!

The new year is almost here, and with that comes the opportunity to restart and refocus. It’s no surprise that one of the top resolutions for any new year is to get your finances in top shape. Today we are going over six new year’s resolutions that can get your finances working with you, not against you. Here are six new year’s resolutions that will get you fiscally fit in 2023.Resolution #1: Start a budgetIf you haven’t started a monthly budget yet, now is the perfect time. Monthly budgets are the best tool for getting a handle on your finances, as it allows you to see exactly how much you have coming in every month and how much you have going out. Looking at a budget allows you to precisely pinpoint where you might be spending a little too much and gives you an opportunity to amend. Budgeting is relatively easy, it just takes some time to get organized. Start by gathering your bills, statements, and pay stubs for the last year (or have them pulled up online). Then record the following:Your fixed expenses–rent, mortgage, car payment, cellphone–your expenses that are the same every month.Your variable expenses–groceries, electricity, entertainment–take an average of the past 12 months to get an average of these expenses that change from month to month (your credit card might even break down some of these categories for you)Your income–paychecks, dividends, and any miscellaneous income you have.Get all of that information into a spreadsheet and see how everything adds up and where you can stand to make some changes.Resolution #2: Improve your credit scoreYour credit score is an indicator of your financial health–for you and for your lenders. The better your score is, the easier your financial life will be. Having a good credit score can help you in many ways:You can get better rates on car insurance and homeowner’s insuranceYou can get a lower credit card interest rateYou can get higher credit card limitsYou will have an easier time qualifying for a mortgageYou will have an easier time renting an apartmentYou can get a lower car loan interest rateIt will look good to potential employers.Credit scores range from 850 to 300 and are broken down into five categories.800 to 850: Excellent credit740 to 799: Very good credit670 to 739: Good credit580 to 669: Fair credit300 to 579: Poor credit You will get the most benefits from having excellent or very good credit, and improving your score by even just a few points can help you score a better interest rate or push your credit limit higher. Credit scores are calculated based on your payment history, accounts owed, credit history length, credit mix, and new credit. Focusing on improving any of these areas can prove to be very beneficial for your financial health, but here are some of the most impactful ways to improve your credit score:Make full and on time paymentsRequest higher limits on your accountsHold off on opening new accounts unless necessaryPay down debts that have a high credit utilization firstResolution #3: Put more money into savingsSaving more money is always a top resolution for the new year. There are many ways to do this depending on what your goals are. Saving money goes hand in hand with creating (and sticking to) a budget, so consider doing this in tandem with resolution number one.Contribute more to your 401KDeposit a percentage of your paycheck into a savings accountLook for areas in your budget to cut, then put that money into savingsTry different savings appsConsider getting a credit card with cash rewards that you can put into savingsSmall changes can add up to big savings, so study your budget to see where you can cut costs. Resolution #4: Check your credit report more regularlyYour credit report is vitally important to your financial wellbeing, but most people do not regularly check it. This can be a huge problem, as you may not know if there is an issue until it is too late. You can check your report for free once per year from each of the three major credit agencies: TransUnion, Equifax, and Experian. You want to take advantage of this and check your report every four months. Credit reports contain the following information: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 informationWhile this may seem like a lot to go over, keeping up on it every few months can make the task much more manageable. When you get a copy of your credit report, be sure to check for the followingThere is as accurate payment historyThere are accurate balancesThere are no unknown or unrecognized accountsAll of your personal information is correct, including your name and addressReport any errors to the agency as soon as you notice them. They will review within 30 days and can amend any issues. This can have a big effect on your credit score as well, so you don’t want to ignore this task. Resolution #5: Refinance any high interest loansIf you have any high interest loans, such as your mortgage or car payment, this may be the year to refinance those loans. When you refinance a loan, you are essentially starting over with a new loan that will have better terms, such as a better interest rate or repayment plan. This can save you a lot of money over the life of the loan, and/or can make your monthly payments much more manageable.If you refinance a car loan to a lower car loan APR you will save money every month in interest and save in total over the life of the loan. If you refinance to a shorter repayment plan, you will save money over the life of the loan by paying interest over less time. Your monthly payments will be higher by doing this however. You can also refinance to a longer repayment plan, which will reduce your monthly payments by a lot. By doing this you will pay more money over the life of the loan however since you will be paying interest over a longer period of time.Refinancing your car loan may make sense if any of the following apply to you:Your credit score has improved since you initially financed your car.The market rates have improved since you initially financed your carYour debt to income ratio has improved since you initially financed your car.You want to add or remove a cosigner from your loanYou need some breathing room with lower paymentsThe best news is that refinancing your car loan is super easy when you use a company that specializes in refinancing. Auto Approve experts can help guide you through the process and start saving money immediately (no need to wait for the new year!)Resolution #6: Start an emergency fundIt’s incredibly important to have an emergency fund. For most Americans an unexpected cost can really throw their finances for a loop, and you don’t want to get caught on the wrong end of a bill you can’t afford. Emergency funds can help protect you from the unexpected. How much you should have in your emergency fund depends on a lot of factors in your life, such as how many dependents you have, how much your monthly expenses are, and how in-demand your job may be. But you should aim to have at least a few months worth of expenses stashed away somewhere.A good way to start an emergency fund is to build it into your monthly budget. Treating your emergency fund as a bill that you have to pay will help you to constantly add to it and allow it to grow without too much effort. Start with $100, $50, or even just $25 a month–whatever you can afford really. Try to keep it in an account where you can build a little interest, but don’t lock your money away in an account where you will be fined to take it out. The point is to have the money easily accessible. Those are six financial resolutions that can help you get you fiscally fit.We hope these resolutions will inspire you to take charge of your finances in the new year. A little planning and good intention can help 2023 become your best year yet.If refinancing your car loan lands on your to do list for the new year, get in touch with Auto Approve today! Our experts are here and ready to help you save money with a brand new car loan. Get your free quote today!

When you lease a car you will have certain restrictions and requirements that you will have to adhere to, and one of those is the amount of insurance that you carry. Since you do not own your leased car, the dealership will require a certain amount of liability coverage to protect its asset. So just how much liability coverage do they require, and what are the other requirements of leasing a car?Let’s talk about how much insurance coverage you need to have when leasing a car.What are the requirements for insurance on a leased car?When you lease a car you are essentially renting the car from the dealership. There are pros and cons to leasing, but in general it is much cheaper to lease a car. This is because you are only making payments on the depreciation of the car while you are driving it, as opposed to making payments on the total value of the car.But because it is not your car, you don’t get to make all of the rules. Dealerships have a number of restrictions and rules set up to protect their asset, including:Mileage allowances. You cannot drive over a set amount of miles per year. This typically ranges from 10,000-15,000 miles.Replacement and repair requirements. You must use OEM parts and use a certified mechanic to make all repairs.No customization. You cannot add on anything to make your car your own, such as bumper stickers or tinted windows.No rideshares. If you are a driver for Uber, Lyft, or another rideshare company, you will not be able to use your leased car for work.No out of country trips. Most leases prohibit you from leaving the United States in a leased car.Insurance requirements. Dealerships will require a certain level of coverage on their leased car.These restrictions might be enough for some people to walk away from leasing. But for some these restrictions are far outweighed by the benefits of leasing. One of the biggest benefits is that leasing a car is much cheaper than financing a car. Increased insurance requirements however can tick the price upwards on the price of lease. But what are these requirements exactly?Leasing Company Insurance RequirementsLeasing companies will require you to have both collision coverage and comprehensive coverage on your leased car. Collision coverage: pays for damage when there is an accident with another vehicle or object.Comprehensive coverage: pays for damage caused by something outside of your control, such as theft or fire.Most lessors will require a higher bodily injury liability limit (typically $100,000 per person and $300,000 per accident). Lessors may also require property damage liability coverage (typically $50,000).State Minimum Insurance RequirementsThe state minimum insurance requirements vary from state to state but the requirements are the same whether you lease, finance, or own a car outright. You are typically required to have liability coverage including:Bodily injury liability: covers medical expenses for others when you are at fault.Property damage liability: covers damage to property when you are at fault.The Cost of Insurance While LeasingSo just how much more money will it cost you on your insurance when you lease a car as opposed to finance? That answer isn’t very cut and dry. Your insurance premiums will depend on:The coverage you selectYour driving historyYour claim historyYour annual mileageThe type of car you driveYour ageYour genderWhere you liveYour credit scoreWhile leasing will cost you more due to your increased coverage requirements, there are a lot of other factors that affect your insurance rates. But even with the increased cost of insurance due to leasing, you will most likely still pay much less per month when you lease instead of finance.Is it worth it to lease a car?How do you know if it’s worth it to lease a car? There are a lot of pros and cons that should be considered when trying to decide if leasing is right for you.The pros of leasingThe biggest advantage of leasing is that it is much more affordable than financing a new car. Car lease payments are calculated based on the depreciation that occurs while you are driving your car, and not on the total value of the car. In fact, lease payments tend to be 30-60% lower than financing payments.But in addition to affordability, leasing has other key advantages:You don’t have to worry about selling your car when your lease is over.You can get a new car every few yearsYour warranty will cover most repairs and some maintenance.You can maximize tax deductions.You can buy your car lease at any point if you change your mind.The cons of leasingWhile there are a lot of advantages to leasing, it’s certainly not for everyone. The disadvantages of leasing include:You do not build equity with your payments.You have a lot of restrictions (discussed above), and misuse of your car can lead to heavy fees.There are early termination fees if you wish to return the lease.What should I know before I lease a car?If you decide that leasing a car is right for you, you should do your research to ensure you are getting the best deal possible. Here are the top things you should know before you lease.What is the cost of the vehicle? Choosing a car that is less expensive will result in lower monthly payments AND lower insurance payments. Once you narrow down on the vehicle, be sure to shop around. The lower the MSRP of the car is, the lower the monthly payments will tend to be. You can actually negotiate on this when you decide to lease (this is called the capitalized cost in leasing terms). Your payments and residual value will be based on this number. Use sites like Kelley Blue Book and Edmunds to make sure you are getting a fair price.What are the taxes and fees?There will certainly be taxes and fees with your leased car. Taxes will be added onto your monthly payments, and sometimes the fees can be rolled into your monthly payments as well. At the start of the lease you will be required to pay a security deposit as well as an acquisition fee (which is essentially a fee of doing business).At the end of the lease you may be required to pay the following fees:Excessive wear and tear feesMileage overage feesDisposition fees What is the residual value of the vehicle?The residual value of the car is how much your car is expected to be worth at the end of the lease period. This is also the amount that you will pay (plus taxes and fees)  if you choose to buy your car lease. You cannot negotiate this as it is typically a standard rate per model.What are the use restrictions?Be sure you know exactly what the restrictions are, and know whether or not you can abide by them. Is the mileage limit too restrictive? Are the wear and tear fees too severe? Are the insurance requirements fair to you? Make sure you understand all of the fine print in your lease agreement.How much is due at signing?Know how much you are expected to put down at singing. Leasing a car is different from financing, and it is not advised to put a large amount down when you sign a lease. But the more you put down the less your monthly payments will be. Keep in mind that if you put a large amount down and something happens to your car, you won’t be able to get that money back.What are the end of lease requirements?When your lease is up, what are your options? What fees are you required to pay, and how much will it cost to purchase your car? Be sure you understand this part of your lease agreement. End of car lease buyouts are a great option in today’s auto market. Since residual fees are predetermined, chances are the current market value of your lease is higher than the residual value. This means that you can buy your car for a much lower price than it is worth. You can either buy your lease out and keep the car, or you can sell it and make a nice profit. Either way a car lease buyout loan from Auto Approve can help you with this. And once you buy your car lease, you can drop to whatever level of insurance you wish (so long as it meets your state’s minimum requirement.)That’s what you need to know about car leases and car lease company insurance requirements.If your lease is ending and you are thinking about buying your car, get in touch with Auto Approve today! It’s a great time to think about a car lease buyout, and our agents are ready to help you get started.GET YOUR FREE QUOTE TODAY!     

When you refinance a car loan you are replacing one loan with another loan. But where should you actually go to get a car loan refinance? The good news is that there are a lot of places that refinance car loans, but not all are created equally.Here’s where you can refinance a car loan (and why it’s a good idea).Why do people refinance auto loans?Car loan refinancing is popular for a number of reasons. By replacing your existing loan with a new loan you can get better terms and ultimately save yourself a lot of money.You can get a lower car loan APR.One of the main reasons people choose to refinance their cars is to get a lower car loan APR. You may be able to get a lower car loan APR if any of the following apply to you:Your credit score has improved since you initially financed.The market rates have decreased since you initially financed.Your debt-to-income ratio has improved.You have been making consistent payments on your current car loan.Getting a lower car loan APR can save you a lot of money over the life of a loan. It is highly recommended that you focus on improving your credit score as much as possible before you apply for car loan refinance. This will give you the best chance at getting a good rate. The best car loan APRs are reserved for those who have very good or excellent credit, with a credit score above 740. The higher the score, the better the rate will be that you are offered.Let’s say you have a $25,000 loan with a 9% car loan APR and a 4 year repayment period. Your monthly payments would be $622.13 and you would pay a total of $4,862.05 in interest.Now let’s say you refinance that loan to a 5% car loan APR. Now your monthly payments are $575.73 and you will pay a total of $2,635.15 in interest. That’s a huge savings.You can change your repayment period.Another huge benefit of refinancing your car loan is that you can change your repayment period. Lengthening your repayment period will allow you to pay off your principal over a longer period of time, making your monthly payments much lower. This can be a good option if you are struggling to make your monthly payments. It is important to note that you will end up spending more in interest over the life of the loan. Depending on how tight your monthly budget is, this might still be a good solution though.You can also choose to shorten your repayment period. This will increase your payments every month but will save you a lot of money in interest over the life of your loan. If you shorten your repayment period by one year, that is one whole year where you won’t have to pay interest.You can add or remove a cosigner.If you had a cosigner on your loan when you originally applied for car loan financing, the only way to remove your cosigner is to refinance. If on the other hand you want to add a cosigner, you will also need to refinance. Maybe your loved one has really good credit and they can score you a much better car loan APR, or maybe you want to add your child on to your loan to help them build credit. Either way, refinancing is the way to achieve this goal.Where can I go to refinance my car loan?If refinancing sounds like a good option for you, you may be wondering “where can I go to refinance my car loan?” Most lenders refinance car loans, including banks, credit unions, and online lenders. All of these can be good options. While dealerships offer refinancing as well, you will want to avoid refinance your car loan through a dealership. Dealerships essentially operate as middlemen between you and the lender, charging fees and adding onto the money you will have to pay.Traditional BanksRefinancing through a traditional bank is the most common way people refinance their loan. Traditional banks can offer pretty quick turnaround and you may qualify more easily if your credit score is less than ideal.Credit UnionsMany credit unions also offer car loan refinancing. While they tend to have more strict requirements, they tend to offer the most competitive refinancing rates.Online LendersOnline lenders are becoming increasingly popular options for car loan refinancing. Online lenders may be your best bet if you do not have the best credit, but their rates may not be as competitive as banks and credit unions.Car Refinancing SpecialistsThe easiest and most effective way to refinance your car loan is to use a company that specializes in refinancing. These companies have relationships with lenders across the country and can find you the most competitive rates on the market. They can also help guide you through the refinancing process and assist you with all applications and paperwork.Can I refinance a car at the same bank?You can usually refinance your car loan with the same bank that financed your original car loan. But it’s a much better idea to shop around to see what other lenders can offer. When you look for a new car loan, you want to compare the following when you apply:The interest rate. The interest rate will be based on your credit score, your debt-to-income ratio, and the prevailing market rates.The repayment period. Look at your cash flow to determine how much you can afford to pay each month. The prepayment penalties. It’s important to look at the prepayment penalties listed in each offer. There is no limit to the number of times you can refinance, so be sure that these aren’t too excessive. It’s good to have the option to refinance again in the future.The customer satisfaction ratings. You should always do some research ahead of time to determine what their customers have to say about the company. How is communication? Are they reputable lenders? Bad reviews are a definite sign to stay away and refinance elsewhere.And that’s where you can refinance your car loan (and why Auto Approve is your best bet for getting the most competitive terms).There are a lot of reasons why car loan refinancing is a good idea, and there are a lot of lenders that can help you refinance. But refinancing is the most effective when you have competitive offers, which is why using a company that specializes in car loan refinance can save you the most money.Get in touch with Auto Approve today to find out just how much money you can save!GET YOUR FREE QUOTE TODAY!

Being in an upside down loan is less than ideal. It’s something no one ever anticipates, but it can happen to the best of us for a number of reasons. An upside down loan (also called an underwater loan) is when you owe more on your car than your car is worth. But just because you are underwater, all is not lost. There are a few steps you can take to swim to shore and get out of your situation. Here’s everything you need to know about upside down loans (and how you can get out of one).How do you get upside down on a loan?First up: how do you even get an upside down loan? When it comes to buying a car, it’s actually pretty easy to end up underwater.You financed with no money down.Dealerships are constantly running “deals” that feature financing with no money down. This is never a good idea. Cars depreciate quicker than almost every other asset, losing about 20% of their value in the first year alone. New cars lose 10% of their value simply by leaving the lot. So if you put no money down, you are immediately going to be in an upside down loan.Let’s look at an example. You decide to finance a $30,000 car with no down payment. This means that once you leave the lot, your car is only worth $27,000, and your loan is still for $30,000. Financing with no money down is the quickest way to get an upside down loan, and it will be hard to turn that around.You picked a long repayment period.Another easy way to end up in an upside down loan is to choose too long of a repayment period. The longer your repayment period is, the smaller your monthly payments will be. And this may seem great for your monthly bills, but this means that the depreciation on your car will outpace your monthly payments quickly and your loan will be upside down in no time.You didn’t do enough research.You can also get upside down in a loan by simply not doing enough research and paying too much for your car in the first place. If your car is really only worth $27,000 brand new and you paid $29,000 for it, there’s a good chance your loan will be upside down quickly.You bought a luxury car.Luxury cars tend to depreciate at a faster pace. Therefore if you are making minimum payments or have a longer repayment period, depreciation can very quickly get ahead of you.You bought a car that was out of your budget.Buying a car that is out of your budget in the first place can land you in an upside down loan. This means that you will have a hard time keeping up with your monthly payments, and you may end up upside down.You got a lot of unnecessary add on features.Nothing ticks up a new car price faster than add ons. And a lot of the time they do not truly add value to the car. You got a high interest loan.The higher your car loan APR is, the more money that is going to the bank and not to paying down the balance. Depreciation will quickly outpace low repayment with high interest loans.How do I know if I am in an upside down loan? Is being upside down on a loan bad?If you are wondering if you have an upside down loan, it’s pretty easy to figure out. Start by calling your lender and asking them for a payoff amount. This will include all of your remaining payments as well as any additional fees. Then compare this number to the market value of your car (you can check Edmunds or Kelley Blue Book to see what market value is). Then simply compare the two numbers. If the payoff amount is higher than the market value, you are in an upside down loan. If your payoff amount is lower than the market value, you are ok (but make a note of how close these numbers are to make sure you aren’t toeing the edge of an upside down loan).While it doesn’t sound good to owe more on your car than it is worth, is it really that bad? Not necessarily, but it does put you at a higher risk financially. Things happen unexpectedly, and if you need to get rid of your car, you will be in a less than ideal situation.Your car gets totaled.If your car is totaled your insurance will only pay out what the current value of your car is. So if you owe $20,000 on your car and insurance only pays you $15,000, you are left on the hook for $5,000.You need a different car.If for some reason you need to get rid of your car and get a new one, you will not really be able to get more than market value for your car (but you will still owe the bank on the total amount of the loan).You are unable to keep up on payments.If you are unable to keep up on your monthly payments (probably because the car was out of your budget in the first place), then you will need to sell your car to get a different one. But again, you will only be able to get the market value of your car and will need to continue making payments to your lender.What can I do with an upside down loan?Drive through the loanIf you don’t plan on needing a new car soon and you are able to comfortably make your monthly payments, you don’t necessarily need to do anything. You can simply drive through the loan, making consistent monthly payments and driving as normal. You will eventually pay off your car and it won’t be an issue.Make extra paymentsIf you are able to make extra payments every now and then, that will greatly help you catch up to your car’s true value. Extra payments will usually go towards the principal (not the interest) and can make a real difference.Refinance to a shorter repayment periodIf you are able to refinance your car loan to a shorter repayment period this can also help get you out of an upside down loan. This will help close the gap between depreciation and your loan’s value. Many lenders do not refinance loans that are upside down, but if you have good credit you may be able to secure a different loan.Get GAP insuranceGAP insurance (Guaranteed Asset Protection) is designed to cover the difference between what the car is actually worth and the amount that you owe on the car. In other words, if you total your car and owe $2,000 more than what your insurance will pay out, your GAP insurance will pay that difference. It’s another added cost but it might be worth it in the event of an emergency.What can I do to prevent an upside down loan?It’s best to avoid getting an upside down loan in the first place if you can help it. Here are some ways to keep your loan amount in check.Make a down payment.Down payments are always a good idea when it comes to buying a car. A down payment is arguably the best thing you can do to ensure depreciation doesn’t put you upside down immediately. Experts recommend a 20% down payment to put you in the best position.Pay your taxes and fees upfront.Many dealers will allow you to roll your taxes and fees into your car payments so that you can pay nothing (or next to nothing) upfront. Avoid doing this as it will just add more to your loan.Do your research.You should always do your research when making a large purchase like a car. You want to be sure of the following:You aren’t overpaying on the actual market value of the carThe car you are buying has a slow depreciation rateThe car payments will fit into your monthly budget (transportation costs should be less than 20% of your monthly budget–car payments, gas, parking, and insurance)Pick a repayment period that isn’t too long.A long repayment period means smaller payments. If the only way you can afford a car is to pay it off over six years, then you can’t afford the car. That’s everything you need to know about upside down car loans.While it’s best to avoid an upside down loan altogether, sometimes we end up in less than ideal situations. If you are unable to make extra payments on your loan, consider getting GAP insurance to help prepare against an emergency. If you’re not underwater but having trouble making payments, consider refinancing your car loan with Auto Approve. We can help save you money, time, and frustration! So don’t wait, contact Auto Approve today to get your free quote!

In the United States, 25% of people choose to lease their cars rather than financing them. While there are a lot of benefits to buying a car, car leasing is popular for a lot of reasons. Popular reasons for leasing include:Lower monthly paymentsLess cash required upfrontLower maintenance costsNew car every few yearsNo need to sell it when you want something newWhen your lease ends, you have three options. You can return your car and lease another one, you can return your lease and walk away entirely, or you can purchase your leased car from the dealership. So how do you know what the right choice is? If you are leasing a car, here are 5 signs that you should buy your car lease.Sign #1: You really like your car.It can be hard to find a car we love–one that drives well, looks nice, and is comfortable to be in. After spending two or three years in your lease, you may not be inclined to just give it back. So the good news is that most lease agreements will allow you to purchase your leased car for a specified amount.When you buy out your lease, your car will officially be yours. No more mileage allowances or restrictions on customization. You are free to do what you like. So if you really like your car, a lease buyout might be right for you.Sign #2: The residual value is lower than the market value.The buyout price of your car is based on the following factors:The residual value of your car, as listed in your contractAny remaining payments (you can buy your leased car at any point in your lease)Any applicable feesSales taxThe most important factor is the residual value. What is residual value on a car lease? It is the anticipated value of your car at the end of the lease period. The residual value is always determined ahead of time and cannot be negotiated, even if the residual value listed in the contract differs greatly from the actual market value of the car. Used cars are in high demand in this current auto market. High demand for new cars and a shortage in car production due to a variety of reasons has increased the demand for used cars as well. This means that used cars have a higher market value now than they have had in the past. So chances are your car’s residual value is much less than the market value. If you love your car, this means that you can buy it at a great price. If you don’t love your car, it means that you can buy it at a lower price and sell it for a profit. Either way, if your car’s residual value is less than the market value–which you can check on Kelley Blue Book or Edmunds–it’s a good idea to buy out your car lease.Sign #3: You’ve gone over your mileage allowance.Leasing a car is essentially renting a car from a dealership. Because you do not own it, they will put mileage restrictions to ensure that you are not overusing the car (and thus devaluing the car). These mileage restrictions are usually around 12,000 miles per year. For some people that is totally reasonable, and they won’t even come close to hitting that. But for others who have longer commutes or have longer trips that they make regularly, this mileage allowance isn’t nearly enough.Mileage fees vary greatly from dealer to dealer and from car model to car model. They can range from $.15 per mile to $.30 per mile that you go over the limit. And this can add up to a lot of money. With a $.25 mileage fee and 3000 extra miles per year over three years, this is over $2,000 in fees that you will have to pay the dealer.If you choose to buy your car lease you will not be responsible for the mileage fees. The $2,250 you owe can be put towards buying your car and getting equity. So don’t waste your money on fees, buy your lease out instead.Sign #4: You’ve gone way under your mileage allowance.The residual value of your car is based in part on how many miles it will have on it at the end of the lease period. Since you are paying for a set usage (let’s say 12,000 miles per year), if you don’t use that amount by the end of the lease, your car should be worth more than the listed residual value. Chances are your car will be worth more than you will pay for it, so it is a good investment to buy your leased car if you are significantly under the mileage allowance.Sign #5: You have excessive wear and tear. Again, leasing is renting. Dealers want to ensure that you aren’t going to damage the car that they are renting to you. To help curb this they will have different levels of wear and tear that are acceptable when you return your car.In general small scratches and dings are expected. But once they become larger and more prominent, these bumps and dings will start to add up. Excessive wear and tear can include:Large dentsCracks in glassStains on the upholsteryTears in the upholstery Poor-quality repairsWhen you return your lease they will do a thorough inspection of your car and determine if there is any excessive wear and tear. If there is, these fees can add up fast. Instead of spending money on fees to the dealership, you can spend that money on buying your leased car.Here’s how you can buy out your lease.If you’ve seen one or more of the above signs, a lease buyout may be a great option for you. And the best news? It’s super easy to buy out your car lease. Here are the steps for buying out your car lease.Review your lease agreement.Be sure to read your current lease agreement closely to determine if you are able to purchase your lease and how much you will need to pay for your lease buyout. If you are unsure, you can call the dealership to get a total cost. Your lease buyout price will be based on the residual value plus any additional fees.Make sure your credit is in top shape.If you know that you will need a loan to purchase your lease, make sure you are in the best position possible to do so. You will qualify for the best car loan APR by having a strong credit score. You can strengthen your credit score by doing the following in the months leading up to your car lease buyout loan applications:Make full and on time payments on all of your accountsRequest a copy of your credit report and review for errorsRequest higher limits on your credit accountsPay off debts that have a high credit utilization ratioHold off on opening any other new accountsA little boost to your credit score can result in much better car loan APRs, so it’s worth it to put in a little extra effort before applying.Determine how you will pay.If you are able to buy your car in cash, then this will be simple. But for most people, this will entail finding a car lease buyout loan. Finding a car lease buyout loan is easy when you use a company that specializes in buyout loans. If you are looking for a loan, you want to do your research and find the best lender for you. You should apply to 3-5 lenders and be sure to compare the following terms when the offers start coming in:Car loan APRRepayment periodCustomer service ratingsAdditional feesAuto Approve can help you navigate this process and find the car lease buyout loan that’s right for you.Finalize the details.When you find the best offer for you, it’s simply a matter of getting all of your paperwork in order. The title will be transferred from the dealer to the lender and you will need to check your state’s guidelines on what paperwork you need to complete at the DMV (although if you use Auto Approve for your car lease buyout loan they can handle this paperwork for you) And that’s it! Your leased car is now yours.That’s how you know a car lease buyout is right for you and how you can get the best car lease buyout loan.Leasing is a great option for many people, but sometimes it’s a good idea to buy your car lease. Whether you want to keep a car that you love, build equity, or simply sell it for a profit, a car lease buyout might be right for you. Contact Auto Approve today to discuss your car lease buyout loan today! GET YOUR FREE QUOTE TODAY!

If you are looking to refinance your car loan, you may be wondering what the qualifications are. What do lenders look at–your car, your credit, your existing loan? Yes, yes, and yes. But let’s look at what specifically is important and what you can do to give yourself the best chance for a vehicle refinance.Here’s what lenders look at when you refinance your auto loan.What do they look at when you refinance a car?When you look to refinance a car loan, lenders look at three main factors: the vehicle you are refinancing, your credit score, and your existing loan. There are certain qualifications they look for in each category.Your VehicleTypically there are a few vehicle requirements when you want to refinance your car loan. They will vary from lender to lender, but generally your car should be:Less than ten years oldHave less than 100,000 miles on itBe worth more than the loan is for (your loan should not be “underwater”)If you are unsure if your vehicle qualifies for refinancing, our agents at Auto Approve can help you! You can also use our online quote form to get an answer quickly.Your FinancesYour credit score and financial history will have a huge effect on your ability to refinance your car loan. Lenders want to know that you are financially responsible and that you will be able to pay back your loan in full. Your Existing LoanLenders will also look at your existing loan when they are determining your eligibility for car loan refinance. Mainly they want to see if you are making full and consistent payments on your existing loan. They will also look to see how much time you have left on your loan. They will not want to refinance typically if you have less than a year on your loan.You should also take a close look yourself at your existing loan when determining if car loan refinance is right for you. Your existing loan may have prepayment penalties that can add up (and ultimately make refinancing less lucrative for you). Make sure that there is also enough time left on your loan to make refinancing worthwhile. The more time that is left on your loan, the more you can save with a car loan refinance. Do they check your credit when refinancing a car?As we mentioned before, your credit score is one of the most important things they check when deciding if you qualify for a car loan refinance. They want to make sure that you are able to repay the loan, and your credit score is the best indicator of that. Your credit score looks at five major factors in your financial history:Your payment historyYour amounts owedYour length of credit historyYour credit mixYour new creditAll of these factors indicate how likely you are to repay your loan. The higher your credit score is, the more likely you are to get a good car loan APR and get favorable terms. The best car loan APRs are reserved for those with good and excellent credit (with a score over 740). If your score is below 740, you can still qualify for car loan refinance, but your rate might not be as good.If you are interested in car loan refinance we recommend taking the following steps to get your credit score in top top shape before applying.Request a copy of your credit report and review it for any errorsCommit to making full and on time payments to all of your accountsPay down debts that have a high credit utilization ratioRequest higher limits on your accountsAsk to become an authorized user on a loved one’s accountHold off on opening any new accounts until after you refinanceHow do you refinance a car loan?Car loan refinance can help you in a lot of ways. It can save you money by lowering your car loan APR, it can give you breathing room by allowing you to stretch out your repayment plan over a longer period of time (thus making your payments smaller every month), and it can allow you to add or remove a cosigner. The biggest advantage of car loan refinancing is you can save a lot of money. Refinancing to a lower car loan APR can save you a lot of money over the life of the loan. Shortening your car loan repayment to a shorter timeframe can also save you a lot of money by reducing the overall amount of time you are paying interest.If car loan refinancing sounds like a good idea for you, it’s super easy to get started!Step 1: Gather all of your information.Get all the information you may need in one spot. This will include the following:Your information (your ID, social security number, and proof of residence)Your car’s information (the make, model, year, VIN, and mileage)Proof of income (such as recent pay stubs) Proof of insuranceLoan information (all of your existing loan information including the balance and the lender’s contact information)Step 2: Look for lenders and applyYou should aim to apply to 3-5 lenders for your car loan refinance. Look into traditional banks, credit unions, and online lenders. Do some research to find out how happy other customers are (using a company that specializes in car loan refinance can make this process very easy). Once you have narrowed your list down you should apply to all leaders at once so that it will only count as one hit on your credit score. Credit bureaus know that people need to shop around so they give people a two week window where all applications will count as one hard inquiry on your account.Step 3: Choose the best lenderWhen the offers roll in you will have to decide which loan is the best for you. Be sure to compare the following:The interest rate. The prepayment penalties. (There is no limit to the amount of times that you can refinance, so keep in mind that you might want to refinance again in the future)Your cash flow and the repayment terms. Customer satisfaction. Hidden fees. When you have compared all of the offers, you can simply sign and start saving. It’s just that easy!That’s what companies look for when deciding if they will refinance your car loan.Car loan refinancing can save you a lot of money. So don’t wait! The sooner you refinance, the more money you stand to save. Get in touch with Auto Approve today to find out just how much refinancing can save you!GET YOUR FREE QUOTE TODAY!

If you have a leased car (or are thinking about leasing), you have probably seen the term residual value a few times. But what exactly is residual value, and what does it mean for you?Let’s talk about how car leases work and what residual value is.How do car leases work?Leasing a car is essentially renting a car. The dealership owns the car and holds the title, but they give you temporary ownership for a set period of time. While you have the car you are responsible for maintaining it and not overusing it (a mileage allowance will ensure this). Leases are usually 24-36 months, but they can be longer. While many people in the United States prefer buying cars, more than a few prefer leasing a car instead. In 2022, about one in four cars on the road in the US are leased. So why exactly would some people prefer leasing over buying?Your monthly payments will be lowerWhen you lease a car, your payments will be much lower than if you were to finance it. This is because you are really making payments on the depreciation that will occur while you are leasing the car, not on the total amount of the car.You need less money up frontNot only will your monthly payments be lower, but when you lease a car you will need less money up front. In many cases you can lease a car with no money down. Any fees that you are required to pay can usually be rolled into your monthly payments. You will not need to sell your car afterwardsWhen you lease a car, you can simply hand the keys back at the end of your lease period. You do not need to worry about selling the car when you are finished.You can get a new car every couple of yearsSome people love having the latest and the greatest, and leasing can allow you to get a new car every few years. This makes it easier to stay up to date with the latest technology (and who doesn’t love the smell of a new car?)You can maximize tax deductionsIf you are a business owner or are self employed, leasing a car will provide more tax advantages than buying a car. When you lease you can write off both the depreciation costs and the financing costs, which is usually more than you can write off when you purchase a car.What is Residual Value?There are a lot of terms that you should be familiar with when you decide to lease a car. Lease payments are calculated as follows: Capitalized Cost - Capitalized Cost Reductions - Residual Value + Interest + FeesLet’s take a look at what these terms mean. Capitalized CostThis is the actual price of the car which will serve as the basis for all of your lease payment calculations. This price can be negotiated, just as you would negotiate if you were buying the car outright.Capitalized Cost ReductionsCapitalized cost reductions are any discounts that the dealership may apply to your lease. This includes any rebates, incentives, and upfront capital that you may put into your leased vehicle.Residual ValueThe residual value of a leased car is the expected value at the end of the lease term. Money FactorThe money factor is the financing charge of the lease. This number is a small decimal that might feel foreign to most people, so multiplying it by 2400 can give you an equivalent APR.How is Residual Value Calculated?One of the most important factors in your lease is the residual value of the car. The residual value of your leased car is based on three factors:The capitalized costThe lease termThe residual lease value percentageThe capitalized cost of the car is simply the sale price of the car. Your lease term will depend on what you select, but it is typically 24-36 months. The residual lease value percentage is somewhat subjective. It is what the car is expected to depreciate over the life of the lease.If you have a leased car with a capitalized cost of $30,000, and the car is expected to decrease in value by 50% over your three year lease, then the residual value of your car is $15,000. The residual value of your lease is important for two main reasons:It will determine what the monthly payments on your leased car will beIt will determine what the buyout price of your car will be at the end of the lease termUnfortunately you are usually not able to negotiate the residual value of your car. It is typically a standard price based on what the dealer believes the resale will entail. But you can negotiate on the capitalized cost of your lease. Should I Buy My Leased Car?When your lease ends, you might be wondering what options you have. You ultimately have three choices when your lease ends. You can keep leasingIf you like leasing, you may simply want to continue leasing a car. You can simply return your current car and resign for a new lease with a new car. This is the simplest option for most people and iit is also the best option for most dealerships. When you keep leasing, you will restart (and negotiate) with a new car, and the dealer can sell your old lease as a certified pre-owned car. In order to return your car with no fees or issues, you will need to return your leased car in good condition and without going over your mileage allowance. If there is significant wear and tear, noticeable damages, or you have gone over your mileage allotment, this could mean you owe the dealership money. You can end your lease and walk awayIf you aren’t happy with leasing, you can also choose to turn in your lease and not lease again. Again, in order to return your car with no fees or issues, you will need to return your leased car in good condition and without going over your mileage allowance. If there is significant wear and tear, noticeable damages, or you have gone over your mileage allotment, this could mean you owe the dealership money. You can buy your lease outBut maybe you don’t want to say goodbye to your car. Or maybe you know that you have racked up a lot of miles (way over your allotment) and you are going to owe some serious fees. Or maybe you know that there is quite a bit of wear and tear and you will similarly face some big fees. Whatever your reason is, a lease buyout is often a great solution at the end of your lease. How to decide which is best for youIf you are trying to decide what is the best option for you at the end of lease, there are some questions you can ask yourself to help decide.  To decide if you want to keep leasing, ask yourself the following: Do I like leasing?Have I been able to stay under the mileage allowance?Have I been able to avoid major wear and tear?Do I like having a new car?Am I ok not being able to customize the car to make it my own? If you answer yes to most of the above questions, then leasing again might be a good move. To decide if giving up your lease and moving on is a good idea, ask yourself the following questions: Do I dislike leasing?Is it hard staying in the confines of the lease agreement?Am I indifferent when it comes to having a new car?Do I have another way of getting around (a different car or a public mode of transportation?) If you answer yes to most of these questions, then returning your lease and moving on might be a good idea for you. But for many people, a lease buyout will be their best option. This is because today’s used car market has a lot of demand. That means your car’s resale value is almost guaranteed to be much higher than your residual value. In other words, you will be able to buy your lease for much less than you will be able to sell it for. Ask yourself the following questions to decide if a lease buyout is right for you. Do I like my car and want to keep it?Do I want to sell my car privately and make a profit?Have I gone over my mileage allowance that will result in major fees?Do I have significant wear and tear that will result in major fees? If the answer is yes to any of the above questions, a lease buyout is probably the best option for you. And a lease buyout loan is an easy way to achieve this.That's how car leases work and how you can decide if buying out your car lease is a good idea. Auto Approve specializes in car lease buyout loans and can help you decide if a lease buyout is right for you. 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