Pierre Money Mart Blog

In a time of economic uncertainty car buyers are more leery than ever about buying a new car.  Things like job loss, medical emergency or personal financial downturn weigh heavily on the minds of the average car buyer.

Hyundai to the rescue, with the help of Walkaway USA, LLC.  Hyundia introduced their assurance program that offers something completely unique to car buyers.  They allow a car buyer to return the car for 12 full months if they experience job loss.

“In this uncertain economy, we are looking for ways to reassure shoppers that Hyundai still represents the best value in the auto industry,” said John Krafcik, acting president and CEO, Hyundai Motor America. “Our agreement with WALKAWAY allows us to offer a unique form of financial protection in all 50 states for the first time by an automaker.”

The Walkaway USA program was introduced in Canada back in 2000 and has allowed for consumers to walk away from $35 million in auto-related debt not to mention auto retailers with a competitive advantage.  They are proud to be the first and only car return company that protects car buyers from financial shortfalls arising from the depreciation of new and used vehicles.

“We are pleased to collaborate with Hyundai in offering this program through an automaker for the first time in the United States,” said Paul Budvitis, president of WALKAWAY USA, LLC.  “WALKAWAY is one of the most innovative products to hit the auto-finance marketplace, addressing consumers’ most pressing challenge to purchasing a new car in today’s economy.”

The Hyundia Assurance program is available to any consumer, regardless of age, health, employment history or financed amount of the vehicle. The program is complimentary for the first 12 months of the financing or lease date for vehicles financed through Hyundai Motor Finance Company and other third-party lenders and financing sources.

GMAC is blanketing the auto loan news these past few weeks thanks to GM’s government financial aid. On top of that the US Treasury said late Monday it would purchase five billion dollars in shares of GMAC to help support the company seen as critical to the auto sector.

The Treasury also announced a one-billion-dollar loan to General Motors so GM can buy additional equity in GMAC, which the Treasury could take on demand.

GMAC’s niche for many years was financing the GM buyers market by being the only company in which GM could use for their financing incentives.  Removing this limitation was part of the agreement GM had with the government in order to receive aid but in the end GMAC may be coming out ahead.

GMAC, which provides GM dealer and customer financing along home loans, disclosed the terms of the agreement in a regulatory filing Friday. The lender said the government will get 5 million preferred shares of GMAC paying 8 percent interest in exchange for its $5 billion capital injection to help GMAC avoid bankruptcy.

This money had an immediate impact to local dealers who are now able to offer zero percent financing and low-interest rate auto loans to customers.  Taking it one step further GMAC has lowered their minimum credit from 700 to 621 fico opening the door for even more car buyers.  This is a direct impact of the federal aid.

“We’re very excited to offer this reduced rate financing through GMAC to encourage our customers to get back into the game,” said Mark LaNeve, vice president at GM North America.

GM said loans through GMAC at zero percent would be offered for up to 60 months for many vehicles, with other loans ranging from 0.9 percent to 5.9 percent.

Source: Associated Press and Google News

You should be aware of the fact that car loans are extremely common, about 70% of all new cars are financed. A number of used cars are financed as well. There are a large number of options for auto financing these days. For instance, you can obtain your loan from a bank, finance company, credit union, or even a professional organization that you happen to have membership in. It is also possible to obtain financing through the auto dealership. You may also decide to finance your car through a home equity loan, which can provide you with an exceptional interest rate.

Interest Rate Know-How
You should know at the outset that your interest rate may vary depending on whether your car is used or new. The interest rates for new vehicles tend to be lower than those for pre-owned vehicles. Also, loan terms tend to be more generous for new cars and trucks than for used models.

Lengthy Loans
If you have a particularly lengthy loan term, it will cost you more money in the long run. There is actually a trend nowadays for longer loans, some run as long as 84 months. This is because many people make the mistake of thinking that they can afford a more expensive car if the payments are spread out over a longer period of time. However, if you truly believe that it would take you seven years to pay off a car loan, you might be better off, financially speaking, opting for a less expensive vehicle. This may be particularly true, given the fact that a lengthy loan may require an incredibly high interest rate.

Tempting Incentives
There are some car dealers who claim that they will pay off the balance of your car loan, no matter what the amount of money left on it. However, if you agree to such a deal, you will simply be transferring your remaining balance onto your new car loan. This means that, if you’re interested in purchasing a $19,000 car, but you still have $3,500 left on your current car loan, you’ll be taking out a $22,500 loan in order to cover your expenses.

Such a program is not attractive in the long run. You would be much better off if you simply waited to pay off your outstanding balance before purchasing a new vehicle. If you simply cannot wait to buy another car, consider one that is more affordable. Otherwise, you could find yourself falling even farther down the economic ladder.

With some smart strategic planning, you can obtain an auto loan that will leave you in a good financial position in the years ahead. Considering the fact that cars tend to lose their market value quickly, a cost-efficient car loan may be one of the best financial decisions you’ll ever make.

Debt Consolidation options are available to help you pay off bills and get out of debt. Quality credit counseling and debt settlement are available to you in addition to traditional debt consolidation loans. Taking the time to learn how to manage debt successfully can have a positive effect on both your present and your future financial security and well being.

Car loans can be the right move for the responsible borrower. In general, a borrower can expect to be able to access about 80 percent of the value of the equity that they have in their home. Many people use this as a means of obtaining the money they need for home improvements, college costs, debt consolidation, and the like. It can have the advantage of making those funds available at a lower rate of interest than other options would. The loan is secured by the home, therefore it is an option that should be exercised with care. As with any borrowing opportunity, take the time to learn enough to become an informed consumer capable of making the right choice for you and your individual situation.

The Auto Industry Gets $25 Billion in a Federal Auto Loan But Are Not Moving Quickly Enough With the Money

[Feb 7, 2009.]

The federal auto loan program to modernize the auto industry isn’t moving as fast as carmakers and some in Congress would like.

There was a real to help the automakers and their suppliers revamp old factories and increase production of fuel friendly vehicles but the money turned out to be more important for other uses than originally thought as the economy and the auto industry struggle.

The money has yet to be sent out and there is no set timeframe to finish the review of the submissions for the federal funds.  The delay highlights some of the difficulties in pushing money out the door as Congress debates the best way to stimulate the economy.

As of Jan. 23, the department had received and reviewed 75 applications for the federal car loans. In that batch, 26 moved on to the next round, which assesses the technical eligibility of the project and financial viability of the company applying.

Those that were rejected were notified why they did not meet the criteria and may supplement their applications by March 31.

Ford, which is seeking $5 billion in direct loans by 2011, made it through the first review.

The next step could be trickier. The government must determine whether applicants have the ability to repay this loan, at a time when auto sales across the industry have fallen to their lowest levels in decades.

The aid for developing more fuel-efficient cars is being taken up separately from the requests for TARP money but both will be a part of the repayment formula.

Energy Department spokesman Dan Leistikow said in a statement that the secretary agrees that “the loans need to be issued as quickly as possible to help our automakers retool, create jobs, and produce the next generation of fuel-efficient vehicles.”

Article Source: Washington Post . com

Refinancing your mortgage can be a financially advantageous move, particularly for those who would like to go from an ARM to a fixed interest rate. Many people do choose to take advantage of the significant savings made possible by refinancing a mortgage to get a lower rate of interest. Another reason for refinancing is to get cash to pay debts that have a higher rate of interest attached to them than the mortgage payment. While this does hold advantages, it is important to remember that the property is in jeopardy if the repayment schedule is not met. If you are considering refinancing your mortgage, you need to make sure to calculate all associated costs with getting the new loan, making sure that it is, in fact, the right option for you.