Pierre Money Mart Blog

On the back of waning demand, the nation’s auto parts suppliers will ask President Obama’s auto task force this week to back between $8 billion and $10 billion in loan guarantees. U.S.-based car parts suppliers have already received $5 billion in federal aid, but are seeking loan guarantees to ensure production can continue uninterrupted.

U.S. car sales have dropped off 37 percent through May, but are expected to recover during the latter part of the year. However, reduced production – largely due to bankruptcies at General Motors and Chrysler – has left many suppliers low on cash, which could threaten their ability to ramp up production during the second half of the year. As such, suppliers are asking the federal government to guarantee loans in order to reduce risk and bolster lending.

“We have very good companies that can’t get financing,” Neil De Koker, president of the Original Equipment Suppliers Association, told Bloomberg. “It’s essential to provide support to suppliers in order to ensure that the money already spent on GM and Chrysler doesn’t go to waste.”

De Koker warns that failure to put loan guarantees in place could disrupt production for GM and Chrysler when they finally emerge from Chapter 11 protection.

In all, suppliers will be looking to secure between $8 billion and $10 billion in loan guarantees. Industry trade groups will meet with the President’s auto task force on Wednesday, followed by a meeting with House and Senate members later this week.
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With America’s car industry down and nearly out, a few local dealerships have stepped up their patriotic appeals, even citing a “Buy American” quote from President Barack Obama.

In recent weeks, at least two dealerships with domestic cars, James-Rivard Buick Pontiac GMC near Brandon and Heritage Ford in Wesley Chapel, have adopted “Buy American” themes in their billboards and marquee signs. A third dealership, Bill Currie Ford Lincoln Mercury in Tampa, began a heavy Buy American campaign on billboards and radio spots two years ago. It has since moved on to a different ad message.

James-Rivard may be going to the greatest lengths, at least temporarily. In mid-May, the dealership took out four or five billboards primarily in eastern Hillsborough County citing a comment that Obama made in an April 30 press conference on Chrysler’s bankruptcy. The billboard campaign runs for a month.

“If you are considering buying a car, I hope it will be an American car,” the billboards read, quoting the president.

On a subtler note, Heritage Ford has a small message on its marquee along State Road 54 in Wesley Chapel, encouraging people to buy a Ford and “Invest in America.”

Heritage Ford general manager Rich Dearborn said the company put up the message in advance of Memorial Day, along with red, white and blue balloons. It hasn’t gotten around to taking it down yet, he said.

Heritage Ford is part of a dealership group that also owns an import dealership, Stadium Toyota, according to state corporation records. Dearborn said believes in supporting American brands, although he was only speaking personally and not on behalf of the ownership group.

“There’s so much to it,” Dearborn said, speaking of patriotic appeal. “Anyone who sees what’s going on in the world, it’s a crazy time.”

Two years ago, when Bill Currie Ford Lincoln Mercury began its “Buy American”-themed billboard and radio campaign, it took some heat from competing dealers. Among the criticisms were that many cars produced by General Motors, Ford and Chrysler are made in foreign countries, such as Mexico, or are made using foreign parts.

At the time, a former general manager at Heritage Ford, Jason Brunner, told the Tribune such an appeal to patriotism amounted to “guilt-trip advertising.”

Roger Rivard, president of James-Rivard, said his billboards are subtler than that.

“I’m just saying consider it,” Rivard said.

Wherever it gets its cars and parts, GM does employ far more U.S. citizens than foreign carmakers do. And the domestic companies’ profits stay at home, helping to pay American wages.

Rivard isn’t expecting people to rush in and buy a Buick, Pontiac or GMC after seeing his billboards. But he is hoping to plant a seed in their minds. H3e said one of his customers is considering buying a Pontiac and trading in his Toyota Corolla, in part because he is embarrassed driving it with all of Detroit’s problems.

“Having been from Detroit previously, I can tell you how important the auto industry and related technology is to the country,” Rivard said.

Danny Lewis, director of community relations for Bill Currie, said his dealership has been touting Ford Motor Credit’s ability to make loans in recent ads rather than making patriotic appeals.

Noting the new Buy American pitches by other dealers, he said, “I don’t want to criticize them, but where have you guys been?”

An auto loan is a good way for individuals with bad credit to make a fresh start and re-establish a positive credit history. A range of factors contributes to a low credit score. Yet, you have the ability to change your current credit standing. For some, improving credit may be simple. Their situation may simply require paying past due bills and settling collection accounts. On the other hand, if a bankruptcy or repossession damaged your credit score, consider obtaining an automobile loan to improve rating.

Get Pre-Approved for an Auto Loan

Prior to beginning your search for a new or used vehicle, it may help if you get pre-approved for an auto loan. Accepting dealership financing with bad credit may not be the wisest choice. Most dealerships offer financing to individuals with poor credit. However, dealerships do not specialize in bad credit loans, thus they will not offer the best rate.

To assure getting a fair interest rate, secure your own private financing before negotiating with a dealership. Getting pre-approved for an auto loan is easy. Simply complete an online auto loan application. The lender will review your

complete a formal application to get pre-approved.

Apply for Auto Loan with a Sizeable Down Payment

Even though it is feasible to get an auto loan with bad credit, you are not promised the best auto loan rate. To raise the likelihood of attaining a slightly lower rate, apply for an auto loan with a down payment. Typical down payments are about 10% of purchase price.

Choose the wrong auto loan and you might drastically increase the chances of defaulting and losing your car. Find out step-by-step how to avoid a money pit.

Car loans are certainly less costly than home mortgages, student loans, or other kinds of loans. So why do so many people end up defaulting and losing their cars? Find out these hidden dangers:

Biggest Hidden Car Loan Danger: The Inherent Money Pit

Unlike home mortgages, student loans or other big-ticket loans, car loans are inherently money pits. A house can build equity; higher education can increase earning potential; even jewelry can sometimes be re-sold for as much as was paid for it. If you borrow to buy one of those things, you may eventually get a return on investment. But every single car loses significant value and keeps losing it as time goes by.

Solution: spend as little on your car as possible.

Of course, in order to spend as little as possible over the life of the vehicle, you need to get a well-made, fuel-efficient car, rather than the one with the lowest price on the windshield.

But a pickup truck, SUV, sports car, or “luxury” model is a guaranteed money-loser. Don’t worry about what other people will think. Think about it: when was the last time you saw an expensive automobile and thought, “I really like and respect whoever owns that!”

The best buy? Many economists actually recommend buying a used car that’s a year or two old. That way you can actually benefit from the fact that cars only drop in value. Even a car that’s just six months old may offer you a substantial savings. Just have it inspected thoroughly so you don’t lose what you’ve saved on maintenance payments.

Hidden Car Loans Danger: Dangerously High Monthly Payments

Unfortunately, most people never figure out the total cost before signing on the dotted

____What you can spend on a car (from           above)
____Amount you’re spending per month on          gas (raise or lower this figure
depending on whether you are getting          a car with higher or lower gas
mileage).
____Monthly maintenance (remember: your          new car won’t stay new long, so
maintenance will be an issue).
____Monthly insurance (remember that for          a new car, your insurance premiums          may go up).
____Tax.

= ____ Maximum monthly loan payment.

Now plug the number above into a vehicle loan rate calculator to figure out big of a car loan, and how much interest you can afford.

Final Hidden Auto Loan Danger: Unnecessarily High Rates

If you simply take the first loan the dealer offers you, you are probably paying too much. Do some comparison shopping on the internet, and bring a list of the best loans with you when you negotiate loan terms with the dealer.

Don’t let the dealer cheat you by shifting the cost from the car loan to the car price to the deal on your trade-in. Make sure you get a good deal overall.

Congratulations! You now are far better prepared to stay out of an auto loan money pit than the vast majority of car buyers. Now you’re ready to go shopping for a loan.

Credit for car loans and bad credit auto loan programs are available nationwide through Americas Car Credit. Auto loan rates are now extremely low for new, as well as, used car loans throughout the United States. As an added plus, you can get approved for your loan safely and confidentially totally online through our 128-bit secure server. If you have been thinking about acquiring a new or used vehicle, we are here to help you with the finance end of things. Nationwide loan programs are available for consumers in all credit circumstances including bad credit and even no credit situations. Auto loans can be obtained by going to our online application for Car Loans.