Pierre Money Mart Blog

When the question of getting luxuries for you and the family arises, all our thoughts take a back seat as we are afraid of facing adverse consequences. But this happens when the decision is taken without much thought. Buying a car is one such example. But by taking up a secured car loan and buying a car, you will never repent for the decision.

With a secured car loan, the borrower can buy a new car or even a used car of his choice. The money is obtained by him very easily to buy the car. The borrower can make a decision as to what car he wants to buy, and if it is a used car then it should not be more than 5-7 years old. The car may be useful for any purpose, personal or commercial.

For taking up the loan amount, the borrower is required to pledge the car that is being bought as collateral with the lender. At the time of purchase, the title of the car is made in the name of the lender. When the borrower repays the full amount to the lender, then the title of the car is transferred to the borrower’s name.

Before taking up this loan, the borrower needs to decide the car and his next step should be to look for a suitable car dealer. After deciding on one who is giving the borrower a good deal, the borrower should then apply for the loan. This application can be made through the online mode if the borrower does not want to take any hassle and wants to speed up the process of approval. The money is transferred to his account and he can easily pay the price of the car to the dealer. This loan is also available to the borrowers with a bad credit history.

Borrowers can now easily borrow money for their car purchase through a secured car loan. Possessing a car has not remained very difficult now.

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.

Joint Account
A credit account held by two or more people so that all can use the account and all assume legal responsibility to repay.
Recording Fees
Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.
Q-form
A Q-form is series of questions that you complete in order to request a loan. What does the Q stand for? You choose – quality, quick, qualification, questionnaire. Our unique Q-forms have been designed by LendingTree specifically for the Internet to make your experience as easy as possible.
Down Payment
Money paid to make up the difference between the purchase price and mortgage amount. Down payments usually are 10 percent to 20 percent of the sales price on Conventional loans, and no money down up to 5 percent on FHA and VA loans.
Appraisal
An estimate of the value of property, made by a professional appraiser.
Closing
The meeting between the buyer, seller and lender where the property and funds legally change hands. Also called settlement.
Equity
The difference between the fair market value and current indebtedness, also referred to as the owner’s interest.
Closing Costs
Includes a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The closing costs usually are about 2 percent to 6 percent of the mortgage amount.
Lessee
A person who signs a lease to get temporary use of property.
Special Lien
A lien that binds a specified piece of property, unlike a general lien, which is levied against all one’s assets. It creates a right to retain something of value belonging to another person as compensation for labor, material, or money expended in that person’s behalf. In some localities it is called “particular” lien or “specific” lien.

BERLIN, Conn., April 7 /PRNewswire-FirstCall/ — Northeast Utilities  announced today it is in the initial stages of developing an electric charging infrastructure for plug-in electric vehicles (EVs) in Connecticut and Massachusetts. The initiative supports regional and national policy goals which include reducing greenhouse gas emissions and reliance on petroleum-based resources.

In a recent application for a U.S. Department of Energy (DOE) grant, two NU operating companies, The Connecticut Light & Power Company (CL&P) and Western Massachusetts Electric Company (WMECO), are proposing to build a network of 575 charging stations over the next two years. The plan calls for a geographically diverse combination of home-based, workplace and publicly-accessible sites in the utilities’ existing service territories. The companies are collaborating with New England-based Environment Northeast, the Greater New Haven Clean Cities Coalition, and the Town of West Hartford, Conn., on key aspects of the project including location selection and results monitoring.

“We see extraordinary potential in electric transportation as one of the tools to help meet the environmental and energy policy objectives of our regional and national leaders,” said James B. Robb, NU senior vice president of enterprise planning and development. “As the next generation of vehicles gets introduced, likely late in 2010, we want to be sure that New England is among the first markets. The development of a charging infrastructure is important, both to support the adoption of these exciting new vehicles and to allow us to assess the impact on our electric distribution system.”

“For sustainable technologies such as alternative fuel vehicles to really take hold and deliver significant benefits, a collaborative effort between policy makers, businesses and other stakeholders is required,” said State Representative Vickie Nardello, House chair for the Connecticut General Assembly’s Energy & Technology Committee. “NU’s program is a necessary catalyst and part of the forward-thinking solutions we must embrace for a viable and sustainable future.”

“Plug-in hybrids and other electric vehicles are going to be important components of our green energy future, but they won’t work without a network of charging stations. I applaud Northeast Utilities for looking into the future and making this initial proposal to meet that need in their service territories,” said Philip Giudice, Commissioner of the Massachusetts Department of Energy Resources.

NU has been working with the Electric Power and Research Institute (EPRI) in a collaborative effort to understand the utility impacts of plug-in electric vehicles. As part of NU’s strategies for carbon reduction and sustainability, the company has several other forward-looking initiatives under way. In particular, the EV charging network complements the Smart Grid pilots at CL&P and WMECO, and is consistent with the planned expansion of company energy efficiency programs. “In addition, our transmission development program, which will facilitate the integration of low-carbon energy into the New England power supply, provides even more leverage to the environmental benefits of electric vehicles,” noted Robb.

The DOE’s decision is expected in June 2009. NU’s application requested federal funding of $693,750 which is fifty percent of the project’s total estimated cost of $1,387,500. “This is an initial proposal and we will be developing more specifics of the program over the summer, including substantial outreach to various stakeholders to help us maximize the impact of the grant,” Robb said. “We are also examining opportunities to participate with other stakeholders in additional federal grant opportunities to advance the electrification of transportation.”

When you want to buy a car you should take a moment to think about some questions such as:
What do you use your car for?
How many people do you need to transport?
What kind of driving do you most often do?
How long is your commute?
Meanwhile keep your budget in mind or you’ll have to go car shopping again soon.

Research the car models: do you prefer manual or automatic transmission?
Need four-wheel drive or all-wheel drive?
What safety features do you want?
Do you require a lot of cargo-carrying capacity?
Will you be doing any towing?
Will the car easily fit in your garage or parking area?
Regardless of whether you decide to buy or lease your next car, establishing a realistic monthly payment that will fit into your budget is a crucial first step. How much should this be? A rule of thumb is that your total monthly car payments — whether you own one car or more than one — shouldn’t exceed 20 percent of your monthly take-home pay.

Check your financial status to help you estimate what your monthly payment will be based on purchase price, down payment, interest rate and length of loan. Take the time to run the numbers now, before you go car shopping, print out the result and put this information into your car-buying folder. It will not only show you what you can afford, it will also help you control the numbers when you negotiate with a car salesman.

By completing these steps, you should now have a good idea about what car will work for you. Maybe there are a few cars that fit your criteria. It’s time to narrow it down.

Car buyers have been trained to visit local dealerships to find the car they want. In the Internet age, this is a waste of time and money. You can quickly cover more ground by shopping on-line. Car dealers are waking up to this new breed of shopper and have created Internet departments within their dealerships to serve the educated buyer who already knows what he wants and what he’s willing to pay. The only thing you have to do in person are test drive the car and sign the contract. And in some cases, you can even have the car “delivered” to you by the salesperson
he goal of a test drive is to experience — as closely as possible — the same type of driving conditions the car will be used for after purchase. If you commute, drive the car in both stop-and-go traffic and at freeway speeds. If you frequently drive into the mountains, try to find some steep grades to climb. Drive over bumps, take tight corners at aggressive (but not dangerous) speeds and test the brakes in a safe location, such as a deserted parking lot. Get in and out of the car several times and be sure to sit in the backseat, especially if you plan on carrying passengers. In short, ask yourself what it will be like to live with this car for a number of years.

While you are evaluating the car, don’t be distracted by the salesperson’s pitch. Don’t drive with the radio on — you can evaluate that later. A new car is a big investment; make sure you spend enough time really looking at it. And then, consider one last thing: your intuition. If you are uneasy about this car, follow your instincts. A vehicle purchase decision is too important (and expensive) to undertake without total confidence.

At this point you should have considered all the cars in the class that interest you. You should have a good idea what you can afford. You should know if you want to buy or lease your next car. You should have test driven your top choices.

Now it’s time to narrow your choices down to one car and make a deal. In either case, take a moment to congratulate yourself. You have done your homework to find the right car for you. Now you can move forward with confidence.