Now let's talk a little about Automobile Financing.
Most car buyers today need some form of financing to purchase a new vehicle. Many use direct lending, that is, a loan from a finance company, bank, or credit union. In direct lending, a buyer agrees to pay the amount financed, plus an agreed-upon finance charge, over a specified period. Once a buyer and a vehicle dealership enter into a contract to purchase a vehicle, the buyer uses the loan proceeds from the direct lender to pay the dealership for the vehicle.
Another common form is dealership financing, which offers convenience, financing options, and sometimes special, manufacturer-sponsored, low-rate deals. Before you make a financing decision, it is important to do your research:
• Decide in advance how much you can afford to spend and stick to your limit.
• Get a copy of your credit report and correct any errors before applying for a loan.
• Check buying guides to identify price ranges and best available deals.
More information about vehicle financing, deciding what you can afford, and consumer protections is available on the USA EBN dot org website. If you need to file a complaint about your auto loan, visit www.consumer finance.gov.
Before renting a car:
• Ask what the total cost will be after all fees are included. There may be an airport surcharge or fees for drop off, insurance, fuel, mileage, taxes, additional-drivers, underage-drivers (younger than 25), and equipment rental (for items such as ski racks and car seats).
• Ask whether the rental company checks the driving records of customers when they arrive at the counter.
If so, you could be rejected, even if you have a confirmed reservation.
• Check in advance to be sure you are not duplicating insurance coverage. If you decline coverage, make sure to get it in writing to prevent surprise charges. If you are traveling on business, your employer may have insurance that covers accidental damage to the vehicle. You might also have coverage through your personal auto insurance, a motor club membership, or the credit card you use to reserve the rental.
• Review your rental receipt to make sure that you were not mistakenly charged for services you did not request, such as GPS or equipment rental insurance.
• Carefully inspect the vehicle and its tires before renting and when you return it. Try to return the car during regular hours so you and the rental staff can look at the car together to verify that you did not damage it.
• Check refueling policies and charges. Some rental companies, particularly at airports, may require you to refuel within a 10 mile radius of the airport or show a fuel receipt when you return the car.
• Pay with a credit card rather than a debit card, to avoid holds on the funds in your checking account.
• Ask the rental company whether a deposit is required or if a block is placed on your credit card. If so, ask for a clear explanation of the deposit refund policies and procedures.
For more information about renting a car and the insurance options, visit insure u online dot org.
Some state have laws to address your rights with short term car and truck rentals. Contact your state or local consumer protection office for information or to file a complaint.
When you lease, you pay to drive someone else’s vehicle. Monthly payments for a lease may be lower than loan payments, but at the end of the lease, you do not own or have any equity in the car. To get the best deal, follow this advice in addition to the general suggestions for buying a car:
• To help you compare leasing versus owning, the Consumer Leasing Act requires leasing companies to give you information on monthly payments and other charges.
• Shop around to compare lease offers from multiple dealers.
• Find out what the down payment, or capitalized cost reduction, is for the lease. Consumers with better credit scores qualify for the low down payments and rates that are advertised in commercials.
• Calculate the total cost over the life of the lease, and include down payment. A lease with a higher down payment and low monthly payments may be a better deal for you.
• Consider using an independent agent rather than the dealer; you might find a better deal. Most financial institutions that offer auto financing also offer leasing options.
• Ask for details on wear and tear standards. Dings that you regard as normal wear and tear could be billed as significant damage at the end of your lease.
• Find out how many miles you can drive in a year. Most leases allow 12,000 to 15,000 miles a year. Expect a charge of 10 to 25 cents for each additional mile.
• Check the manufacturer’s warranty; it should cover the entire lease term and the number of miles you are likely to drive.
• Ask the dealer what happens if you give up the car before the end of your lease. There may be extra fees for doing so.
• Ask what happens if the car is involved in an accident.
• Get all of the terms in writing. Everything included with the car should be listed on the lease to avoid your being charged for “missing” equipment later. You can get more information about auto leases from the website consumer finance.gov.
When you borrow money to buy a car or truck, the lender can take your vehicle back if you miss a payment or in some other way violate the contract. You should also be aware that the lender:
• Can repossess with cause without advance notice.
• Can insist you pay off the entire loan balance to get the repossessed vehicle back.
• Can sell the vehicle at auction.
• Might be able to sue you for the difference between the vehicle’s auction price and what you owe.
• Cannot break into your home or physically threaten someone while taking the vehicle.
Wells Fargo Bank is famous for violating your rights and are known to focus on reprocessing, especially when you own less than the vehicle is worth. I speak from personal experience with this USA EBN black listed company. A USA EBN Black listed company is a company that USA EBN refuses to do business with, for un-ethical business practices.
If you know you are going to be late with a payment, talk to the lender. If you and the lender reach an agreement, be sure to get the agreement in writing. Contact your state or local consumer protection office to find out whether your state gives you any additional rights.
Whenever you take a car to the repair shop:
• Choose a reliable repair shop. Family, friends, or an independent consumer-rating organization should be able to help you. Look for shops that display various certifications that are current. You should also check out the shop’s record with your state or local consumer protection office or the Better Business Bureau.
• Describe the symptoms. Don’t try to diagnose the problem.
• Make it clear that work cannot begin until you have an estimate (in writing, preferably) and you give you're okay. Never sign a blank repair order. If the problem cannot be diagnosed on the spot, insist that the shop contact you for authorization once it has found the problem.
• Ask the shop to return the old parts to you.
• Follow the warranty instructions if a repair is covered under warranty.
• Get all repair warranties in writing.
• Keep copies of all paperwork.
Some states, cities, and counties have special laws that deal with auto repairs. For information on the laws in your state, contact your state or local consumer protection office. A consumer guide to auto repair is available at consumer dot ftc dot gov.