When interest rates drop, refinancing your car loan could save you thousands of dollars.

Say you bought a new car two years ago and there were a few dings on your credit. You might have been charged 9 percent on a five-year loan for a $23,000 car. Your payments are probably about $525 a month.

Now let’s say your credit has improved, and so have interest rates on car loans. You could now refinance the balance of your car loan at 3 percent and lower your payments to about $445 a month for the remaining three years. That’s a savings of $80 a month and $2,880 over the life of the loan.

Other examples could be even more dramatic. In some cases, an uninformed used-car buyer might have saddled himself with a car loan that has an 18 percent interest. By refinancing at a competitive rate, he could slash his monthly payments in half.

Is there a downside to all this? No. That’s because, unlike home mortgages, many auto loans don’t charge prepayment penalties or fees to set up the loan. And consumers can complete the application process online in about 15 minutes.

Car owners who are thinking about refinancing their auto loans should first locate their purchase contracts and check their term (the length of the loan), the balance (how much they still owe) and the current interest rate. This is especially easy for car owners who have their accounts online.

Many lenders offer auto refinancing. Start by checking the refinancing rates offered by your own bank or credit union. Compare your results to rates listed for online lenders and other banks on a site such as Bankrate.com.

On Bankrate.com, type in the name of your state and the closest city, and the site shows a list of lenders and their rates. Be sure to review the term of the loans, since different terms have different rates. Also, be aware that many of these lenders will run a credit check when you apply, which could have a minor impact on your credit score.

Remember, as interest rates drop, auto loan rates follow. Why throw that money away by paying unnecessary interest? Visit the Edmunds.com auto loan calculator and see how much getting a new loan at a lower interest rate could save you.

 

 

 

 

by Edmunds

TIPS THAT MAKE BUYING A USED CAR EASIER

Buying a used car is not like buying a new car. When you buy a new car, you have the added benefits of knowing that you are the first owner of the car and that warranties cover most mechanical defects for the first several years. Because the purchase of a used car does not have the same protections as purchasing a new car, a buyer must do their research before deciding to hand over money for any vehicle. Here are some tips that can reduce the uncertainty about the quality of the used car and take the guesswork out of how much you should be paying for the vehicle.

DO NOT WAIT UNTIL THE LAST MINUTE

One of the worst things that can happen when you are shopping for a used car is being rushed into making a decision before you have all of the information that you need. Most cars do not die all of a sudden, so when you feel that your current car is nearing the end of its useful life, start the shopping process. Figure out how much you can afford to pay for your next car and what features you will need to focus on for the car to accommodate your lifestyle. You never want to put yourself into a situation where you cannot say no to a seller because you have to have a car right away.

MAKE A LIST

Before heading out to look at vehicles, you should have a list prepared of the things that you need to look for when shopping. The document that you create should include a list of acceptable makes and models and the production years that you would be interested in. You should also include a price range that you would be willing to pay for that vehicle based on the average value of that type of vehicle, which can be found at Kelley Blue Book (www.kbb.com). Additional features that interest you can also be added to the list so you will remember to look for them when shopping.

HAVE A MECHANIC CHECK OUT PROMISING VEHICLES

Once you have found a vehicle that meets your needs and fits into your price range, have the vehicle checked out by a mechanic before you decide to purchase it. Most auto shops will do this for you for a minimal charge, which is much better than finding out about a major problem months after making the purchase. The mechanic will point out any major issues that you should be aware of, allowing you to avoid purchasing a car that has a bunch of impending problems.

Welcome to North American Auto Group’s Online Journal

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North American Auto Group welcomes you to the introduction of its online journal.

We welcome our customers to submit posts, recommend topics or simply offer reviews.  Our staff will publish information, as well as post vehicles for sale.

We look forward to hearing from you, our most valued and appreciated asset. We were built by our clients, their families and referrals of these satisfied customers.

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