Questions You Should Ask the Dealer When Car Shopping

Five answers to know before you sign on the dotted line

No matter whetherfebruaryfeatured_dealerquesitons you are shopping for a new or used vehicle, there are certain questions you will always want to know the answers to. The answers the dealer provides will tell you whether you are getting the most car for your money.

What are the additional fees?
Legitimate costs include sales tax, registry costs and a documentation fee. However, the amount dealers charge for filling out the contract (the doc fee) is not universal. According to the trusted automotive resource Edmunds.com, some states regulate these fees and cap them below $100, so before you seal any deals, check the paperwork and negotiate down an outrageous doc fee. Another questionable fee you may encounter, in an effort for the dealer to build a potential profit back into the deal, is a “vehicle preparation fee.” This means, for example, they are charging you for making sure there is oil in the vehicle and for performing other menial tasks that one would expect to be done inevitably before a car is rolled off the lot.

Are there any aftermarket parts on the vehicle?
Inclusion of “add-ons”-from things as simple as tinted windows to things as complicated as car alarms-is another way dealers attempt to boost profits by raising prices.

“Mud flaps, rust-proofing and paint sealants make the dealer a lot of money, but you can get them for less-often much less-elsewhere,” writes David Muhlbaum, online editor of Kiplinger.com

Before saying yes to a vehicle purchase, you will want to double-check with the dealer and in the contract, and negotiate accordingly.

What special promotions are you running right now?
Manufacturers are always running sales events, and sometimes dealerships even tack on their own discounts and deals. Investigate up front what promos are going on so you can take a closer look at the vehicles with the best incentives.

“If you’re diligent-and a little bit lucky-you can use one of these events to knock a few thousand dollars off of your total cost or secure 0 percent APR financing for the first year or so of your loan,” says Business Insider personal finance writer Ben DeMeter in an article on Investopedia.

What is the lowest price you can give me?
Instead of telling the auto dealer the highest price you can afford to pay each month, take the reins by figuring out the lowest possible price you would pay on the vehicle in question. While it is smart to go into negotiations with financing options already lined up, the dealer may be able to offer you lower financing, so don’t show your cards too soon.

Can I see an accident history report and title history?
Most dealers these days automatically provide a CARFAX report for all vehicles, as well as an AutoCheck report to be thorough. These documents also report title history, which will disclose any previous problems with the vehicle such as odometer issues, a rebuilt engine or whether it was ever reported stolen. If you choose to proceed without checking one or both of these reports, or something like them, you are putting yourself at risk for a large devaluation of the vehicle.

Once you ask these questions and are satisfied with the responses provided, you can feel comfortable signing on the dotted line as an informed consumer.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Is an Electric Vehicle Right for You?

The pros and cons of owning an EV
If you’re considering167427226 a new ride, you owe it to yourself to check out an electric vehicle (EV). Here are some of the pros and cons of owning one.

Electric vehicles have come a long way in a short amount of time and can eliminate the need for gas. With significantly fewer parts than traditional gas-powered engines, EVs require significantly less maintenance too. EVs have zero tailpipe emissions, so they enable you to do your part in helping the environment.

Many people believe that EVs don’t offer the range that they need in terms of miles they can drive on a single charge, but that’s simply not the case. According to the United States Department of Transportation Federal Highway Administration, the average American commutes fewer than 40 miles per day. Most EVs get far more than that.

Here are a few examples.

Nissan Leaf
The Leaf starts at an MSRP of $29,010 and offers 107 miles of range when equipped with the 30-kWh battery. Standard features include Nissan Intelligent Key with push-button start, Bluetooth wireless connectivity and heated front seats. You can also add the NissanConnect system with Navigation, a Bose audio system and leather upholstery. If you download the LEAF EZ-Charge app, you can locate over 20,000 charging stations nationwide so you’ll never be worried about running out of power.

“While it has a limited driving range, in most other respects the Leaf is quite similar to a conventional gas-powered compact hatchback, offering a comfortable interior and surprisingly snappy acceleration (albeit with zero emissions),” says LeftLane News.

Tesla Model S
The Model S has revolutionized the way people look at EVs. It’s not as much of a great luxury EV as it is a great luxury vehicle that happens to be electric, which was designed to be safer and more exhilarating than anything else on the road. It also offers electric all-wheel drive, autonomous driving features and technology that make it the envy of its peers. Driving range starts at up to 218 miles per charge in base form and can go all the way up to 315 miles. This is impressive in its own right, but even more so when you consider the Model S can go from zero to 60 mph in as little as 2.5 seconds.

Kelley Blue Book says that the “Tesla’s Model S for 2016 is a game changer, offering everything a traditional combustion-engine luxury sedan does without the harmful emissions and unpredictable fuel bills. . [T]he Model S can win over the most skeptical enthusiast.”

Mitsubishi i-MiEV
An MSRP of $22,995 gets you into a new 2017 i-MiEV, and after the federal tax credit of $7,500, the i-MiEV comes in at an impressively affordable $15,495. That’s significantly cheaper than popular models like the Toyota Corolla, Honda Civic, Chevrolet Cruze and Ford Focus. Its 60-mile driving range may not be as impressive as that of the other models mentioned, but it allows for fuel-free driving for less than many traditional gas-powered vehicles cost, making the i-MiEV a great second vehicle for people who don’t tend to travel very far.

Other options: You can find electric versions of popular models, including the Kia Soul, Volkswagen Golf, Chevrolet Spark and Ford Focus.

The Drawbacks
While there are many advantages of owning an EV, there are still some factors some people can’t overcome. The architecture of the grid is improving, but if you’re looking to travel long distances, many EVs aren’t ideal because of their long charging times and limited ranges. Another factor can be price, which puts a lot of buyers out in the first place. And if you’re looking for variety, many manufacturers don’t even offer an EV in the first place.

Regardless of what you’re looking for, your financial institution is arguably the best place to get financing, so stop by and let us know what you’re looking for, and we’ll do our best to get you the money you need so you have one less thing to worry about.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Understanding Lease Terminology

Motor vehicle financing terms to know before going to the dealership

Before steppingleaseterms_featured into a dealership to lease a car, it’s important to understand lease terminology to make sure you get the best deal possible and aren’t taken advantage of by a dealer.

Understanding the basics
Cars are often advertised with much lower payments for leases than for purchases. According to a February 2012 article from J.D. Power and Associates contributed by Jeff Youngs, this is because lease payments are based on the depreciation value of the vehicle during the contracted term of operation.

There are, however, additional terms and fees on top of the monthly lease payment. Some—like mileage allowance, purchasing options after the lease term ends and depreciation of the vehicle—are widely known, while others are not.

The following are those you should know that might fall in the latter category:

Acquisition/termination fee
Also known as the bank fee, this covers administration costs and is paid either at the beginning of the lease (acquisition) or at the end (termination), according to Youngs.

Capitalized cost
This is the negotiated total cost of the vehicle. “When leasing a model that is in high demand and low supply, the capitalized cost may be the Manufacturer’s Suggested Retail Price (MSRP) or higher,” Youngs said in an April 2013 article from J.D. Power and Associates.

Capitalized reduction payment
Also known as the cap-reduction payment, this is the down payment made on a lease term to help reduce the monthly payment amounts. It is nonrefundable, Youngs said.

Destination charge
This is the nonrefundable cost for the vehicle to be delivered to the dealership.

Drive-off fee
This is the total amount due at signing. Just as when purchasing a car, there will be title fees, registration fees and sales tax to account for, though leased vehicles incur sales tax on monthly payments only, said Tony Quiroga, Car and Driver magazine senior editor, in a February 2015 article.

Money factor
Also known as the finance factor or finance charge, this number is used to calculate your interest rate by multiplying the money factor by 2,400, Young said. For example, a money factor of .00350 would be an 8.4 percent interest rate.

Rent charge
“This is the amount of the lease payment that comes from interest charges,” Quiroga explained. “To calculate the rent charge, add the adjusted cap cost to the depreciation and multiply by the finance factor,” and then multiply by the total number of months in the lease term.

Residual value
According to Youngs, this is the “predicted value of the vehicle at the end of the lease.” Quiroga pointed out that with residual value, “the less it’s worth, the higher the lease payments.”

Subsidized lease
“Many advertised lease deals are subsidized leases, meaning that the auto manufacturer determines, in advance, the financial variables used to calculate the lease payment and takes on a certain degree of risk in order to create an attractive or class-competitive payment,” Youngs warned. He added that subsidized lease terms are nonnegotiable and often require a cap-reduction payment.

Additional lease information
There are a few other details to note in regard to leasing, depending on the vehicle you choose and any additional services you purchase.

Gap insurance is often included in lease terms as an additional fee. According to Youngs, this automotive insurance helps meet the gap between your insurer’s paid amount and the total residual value due to the leasing company in the even that your vehicle is stolen or damaged beyond repair.

A service contract is also offered as part of a lease contract, in which the consumer agrees to pay a discounted price up front to the dealership to have the vehicle serviced by the dealership for all of its future repair and maintenance needs.

“Before buying a service contract, make sure the brand of vehicle selected does not offer free scheduled maintenance for a limited time,” Youngs said.

Finally, it’s important to note that your base monthly payment is not the total amount you have to pay each month within a lease. The base monthly payment is simply the depreciation value plus the rent charged, divided by the number of months in the lease term. Your total monthly payment—what you actually pay each month—is the base payment plus tax.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

How Autonomous Driving Will Change the Auto Industry

Autonomous vehicles will bring major changes across the mainstream auto industry

With autonomous drivingautonomouscars technology already in use, experts predict it won’t be long until autonomous vehicles (AVs) are available to the mainstream, bringing with them significant changes to the auto industry.

How Automakers Will Respond
Although AVs are not available for consumer purchase, automakers should get ready for strategic response in the near future. In fact, according to a June 2015 article from worldwide business management consulting firm McKinsey & Company, AVs are already being used for mining and farming and could soon be seen in construction.

McKinsey interviewed 30 experts worldwide about the implications of Advanced Driver-Assistance Systems (ADAS) and AVs for the auto industry. Using this research, McKinsey established four main responses likely to come from automakers:

  • Gradual incorporation of technology – “Established premium players with extensive customer bases and strong technical and commercial legacies will probably take an incremental approach to AVs.”
  • Adoption specific to the needs of the accessible mobility market – “New industry players developing ‘radically new’ vehicle architectures [will tap into the handicapped accessibility market and] capture volumes quickly and sustain ancillary business models.”
  • Early adoption overall – Automakers with “significant technical and commercial legacies … will most likely invest in AV research and then wait for the vehicle-level costs of the core technologies to drop while penetration in the premium segments grows.”
  • Opposition to the technology – These will be the automakers that will most likely avoid entering the AV market until the later years of development.

Changing the Market for Automakers and Financing Needs
Regardless of how manufacturers respond, there will be a definite change in the market for automakers.

In its report, McKinsey posits that once the AVs begin to enter the market in the early adoption phase, automakers and manufacturers could take advantage of the need for original service equipment and car parts. Instead of producing new car models, these companies would change their business focus to serving, repairing and maintaining AVs.

“Our research shows that nearly 60 percent of customers would follow their smart cars’ recommendations for service locations. Beyond the benefits of a bigger after-sales revenue stream, OEMs will have a strong incentive to service these vehicles, since regulators could ultimately force them to take on the greatest portion of the responsibility and risk associated with crashes caused by AV technical failures,” reports McKinsey.

This could lead to a change in the supply chain and in manufacturing employment as AVs enter the manufacturing industry, with both positive and negative effects.

“AVs in combination with smart technologies could reduce labor costs while boosting equipment and facility productivity” but would decrease employment in this sector as AVs take over jobs once performed by humans, says McKinsey.

It could also change whether consumers will still need financing for vehicle purchases.

In a February 2016 article in Road & Track, automotive industry expert Bob Lutz poses some very tough predictions for the auto industry and the need for vehicle financing.

“When we really get to the point where we have individually programmable but standardized transportation modules moving on the freeway with a whole snake of vehicles at 150 mph, brands will no longer matter,” states Lutz.

It’s possible that some consumers will still opt to own AVs, which will not kill off the automotive industry altogether, but there are still large implications for ownership decline, automotive sales and financing needs. Lutz predicts this change will occur first in urban areas, where car ownership has been declining and people are already groomed for AV use.

“We see, basically, this model in the form of Uber. Uber is simply autonomous vehicles with a driver,” Lutz says.

Implications for Non-Automated Vehicles
Lutz compares the change over from non-automated vehicles to AVs to an earlier change in transportation history, from horses and carriages to the first car. Lutz poses that regular vehicles will become relics of entertainment and status, kept purely for personal enjoyment.

“Consider the horse. With the advent of the car, horses were essentially banned from streets,” he says. “But they made a very nice comeback on private property. Dude ranches, farms, riding stables, racing. I think the same thing can and will happen to the automobile.”

If this is the case, financing for a non-automated vehicle will certainly change and may even become a much more inclusive buying process across the credit score spectrum.

If you have any queries, ask us about financing and we’ll be happy to talk to you about possible changes and what to do today.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

How Much Should You Spend on a Car Based on Your Income?

Using your income as a base so you don’t overextend yourself

Buying a car is oftencarpricevsincome_featured one of the largest expenses an individual will incur, and most will finance such a purchase. It’s crucial to plan ahead so you don’t inadvertently buy a vehicle that you can’t afford.

“Because financing a car means committing to a monthly loan payment for a period of time, your monthly budget plays the biggest role in deciding how much to spend on a car,” explained Managing Editor Jamie Page Deaton in a July 2015 article in U.S. News.

Using your net income as a basis
Before you even start the car shopping process, you should know how much you can afford to spend each month. Then you’ll be able to narrow down your vehicle search to those that fit within your budget.

Start by getting out a piece of paper and writing down your monthly income.

“To calculate how much you have available to spend on your car payments, first take into account your essential monthly expenses. These can include mortgage or rent, utilities, phone, food and entertainment, savings, and other expenses,” reported an August 2014 CarFax article in its CarFox blog.

“The total from this [deducted calculation], your disposable income, is the amount you have left to cover the cost of your new car.” Note that this estimated number is meant to cover all car expenses including gas, insurance and maintenance, and not just the monthly payment for the car.

Calculations: example 1
CarFax suggested you spend 10 to 20 percent of your monthly disposable income on a car payment and expenses. As an example, CarFax shares calculations for an individual with a monthly income of $4,000.

“If your gross pay is $4,000 a month and you spend $2,165 on essentials like mortgage, food and utilities, your disposable income is $1,835 a month. Spending 10 percent of your disposable income would mean a $184 car payment. Twenty percent of this would give you a car payment of $368.”

Calculations: example 2
Deaton suggested a calculation model for spending ability at no more than 15 percent of your net monthly pay, as long as you don’t have major debt other than a mortgage.

As an example, Deaton posited that someone who makes $50,000 per year will likely take home an annual net income of $44,180 after taxes. He noted in a July 2015 article in U.S. News & World Report that other expenses, like health insurance and retirement saving, will likely lower this net amount and offered a monthly estimate of $3,681 in net pay for this example.

At 15 percent, this person should be able to afford, at most, $552 per month for all car-related expenses (not just the car payment). Taking into consideration the median U.S. insurance rate at $100 per month, and assuming this person spends $125 per month on gas and saves or uses $50 per month for repairs and maintenance; this hypothetical person will have $277 left over each month for a car payment.

“Plug this number into a car affordability calculator with a $2,000 down payment, 4 percent sales tax and a car loan lasting five years with no interest, and a car costing just under $18,000 makes financial sense for this person. Of course, this person may not qualify for a no-interest loan, and shortening the loan term will increase the payment. [He or she] could also lower the monthly payment by having a larger down payment,” noted Deaton.

If you do have more debt, such as from credit cards and student loans, Deaton advised you look at your total monthly debt as a whole in determining how much you can afford for a car. You’ll want to spend less than 36 percent of your monthly net income on your total monthly debt.

If you need more help calculating what you can afford, contact us and we’ll be happy to help.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Tips for Getting the Best Auto Loan

Doing your homework before walking into a dealership can help you save

You’ve decided to buy a carbestcarloan_featured — whether new or used — and all you keep thinking about is how exciting it will be to drive home with a new toy. While car buying can be fun, doing your research before you walk into the dealership can help you save money. Consider these tips when planning your new purchase.

According to a September 2014 article on NBC’s “Today” show’s website by consumer expert Herb Weisbaum, before walking into the dealership, you should know your credit scores from the three major credit reporting agencies: Experian, Equifax and TransUnion.

“You want to check all three because you don’t know which one the lender will use and you want to give yourself time to fix any mistakes,” says Director of Consumer Education for Credit.com Gerri Detweiler. “I found a mistake when I went to buy a car a few years ago, and if I hadn’t straightened it out, it would have cost me a lot of money.”

You can use AnnualCreditReport.com, set up by the federal government, or free credit sites like CreditKarma.com or Credit.com.

Shop around first
Don’t make the mistake of walking into a dealership without first checking out auto loans from other financers, including local financial institutions. You can even get preapproved for a loan, so you know what your best possible rate is going in.

“A lot of people just assume they’re getting the best rate and terms from the dealer, and that’s the last assumption you should make,” says Liz Weston, author of the book “Deal with Your Debt.” Shopping around for an interest rate can also protect you from hidden dealership fees.

“Dealers are legally allowed to add to your interest rate in order to compensate themselves … in effect, hiding the size of their profit from the buyer. The only way you’re going to know if you’re getting the best rate out there is if you’ve gotten quotes from other lenders,” reports a June 2012 article in Time magazine by writer and editor Martha C. White. The Time article also warns consumers about dealers who offer to pay off the loan on your trade-in vehicle. In some cases, the dealership will pay it off but then add and hide the loan cost in your new loan.

Choose the shortest loan term you can afford
Those 60- and 72-month loans may look great in the dealership with their low monthly payments, but you’ll end up paying more in the long run with extended months of interest.

“Try to limit your car loan to about 48 months. That’s the optimal amount of time you should pay for your car,” says Automotive Content Specialist Mike Quincy with Consumer Reports Autos.

Make a down payment
Don’t be fooled by the signs and flyers at your local dealership promising low monthly payments with zero dollars down; very few people end up qualifying for these deals. If you can afford to, make a down payment on your purchase to save money in the long run.

“Having a down payment will help you qualify for a loan and may help you obtain a lower interest rate. Lenders tend to look favorably upon borrowers prepared to make a down payment because it makes default on the loan less likely,” reports Experian, global leader in consumer and business credit reporting, in its FAQ section.

Buy add-ons separately
Would your car look cooler with a nice set of chrome rims or a leather interior instead of fabric? Most likely, but adding these upgrades to your auto loan will only increase your monthly payments and possibly your interest rate.

“About 50 percent of a dealer’s profits come from the finance office,” says Chris Kukla, senior counsel for government affairs at the Center for Responsible Lending, in a June 2012 article for Time. As a result, car salespeople will upsell their add-on services because they’re looking to increase their profit, not help you with your costs.

Purchasing add-ons after your loan is finalized will also allow you to better evaluate the need versus cost for each, helping you save money and purchase only those services that fit within your budget.

If you have additional questions on how to get the best auto loan, contact us and one of our representatives will be happy to help.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Vehicle Details: Best Cars for Younger Drivers

You don’t have to settle
If you’re looking forYoungCars_Featured a vehicle for younger drivers, there are plenty of excellent models that are not only affordable, but also among the best values in the entire automotive industry.

Honda Fit
The 2016 Honda Fit starts at an MSRP of $15,890, a bargain considering it was named both “Best Subcompact Car for the Money” and “Best Hatchback for the Money” by U.S. News & World Report. A 1.5-liter, four-cylinder engine produces 130 horsepower and 114 pounds/foot of torque, and when equipped with the available Continuously Variable Transmission, you can expect up to 33 mpg city and 41 mpg highway. Features like the Advanced Compatibility Engineering™ Body Structure, Vehicle Stability Assist and SmartVent® front-side airbags helped the Fit achieve a Five-Star Overall rating from the National Highway Traffic Safety Administration.

“Nobody has yet matched the Fit’s incredible versatility at this price, and placed it atop a chassis that offers a modicum of fun,” notes Car and Driver.

MAZDA3
Available in both sedan and five-door variants, the MAZDA3 has quickly become a favorite of automotive media and consumers alike, and it happens to be the most affordable vehicle to make Car and Driver’s 10Best list, with a starting MSRP of $17,845 for the sedan. There are two fuel-efficient SKYACTIV engines with fuel estimates rated up to 30 mpg city and 41 mpg highway, and a slew of available features that help keep you safe, including a Technology Package that bundles a Lane Departure Warning System, Mazda Radar Cruise Control, Forward Obstruction Warning, High Beam Control and Smart City Brake Support. Both the sedan and the five-door have been named a Top Safety Pick+ by the Insurance Institute for Highway Safety.

“Anyone who thinks a compact car can’t be stylish, fuel-efficient, value-oriented, technologically advanced and a hoot to drive hasn’t met the Mazda3. Mazda’s small sedan and hatchback are all those things and more,” adds Kelley Blue Book.

Chevrolet Sonic
The Sonic is one of the more popular models in the Chevrolet stable among younger buyers. In fact, according to Chevrolet, it’s the company’s top vehicle for first-time buyers, with over 20 percent of Sonic buyers under age 35. And nearly 30 percent are trading in non-GM vehicles. A new 2017 model is on its way, with the 2016 model already an excellent bargain starting at $14,345.

There are two Ecotec four-cylinder engines that help the Sonic achieve fuel economy of up to 29 mpg city and 40 mpg highway. And as in all Chevrolet models, the OnStar connectivity suite is available with 4G LTE Wi-Fi so you can stay connected.

“The Sonic is Chevrolet’s entry into the popular subcompact segment. Available as both a sedan and a hatchback, it offers a refined cabin and surprisingly good driving dynamics,” says Left Lane News.

Kia Soul
The Soul starts at an MSRP of $15,900 and is a great vehicle if you’re looking to stand out, having recently been named one of the “10 Coolest Cars Under $18,000,” according to Kelley Blue Book’s KBB.com, on top of its spot on the “Best Compact Car for Families” list from U.S. News & World Report. It was also a winner at the 12th annual Active Lifestyle Vehicle of the Year.

The Soul is available in three trim levels (Base, + and !), and power comes from either a 1.6-liter, four-cylinder engine or a 2.0-liter, four-cylinder engine with 164 horsepower and up to 24 mpg city and 31 mpg highway. All Soul models come standard with a 10-year/100,000-mile Powertrain Limited Warranty, among the best in the industry.

“Proving once and for all that it’s hip to be square, the Kia Soul stands out from other compacts with a unique look that manages to be both boxy and extremely funky. The affordably priced, hamster-endorsed hatchback also delivers a roomy cabin, ample standard features and numerous optional extras, making it an appealing blend of style and substance,” says Left Lane News.

There are plenty of great choices available for young drivers, but when you’re looking for financing, the best option is to stop by and see us.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

How the Type of Car Impacts Auto Insurance Premiums

What you drive affects how much you pay for insurance

When you’re buying a vehicle,CarTypeInsure_Featured there are many aspects to consider — comfort, fuel economy, technological features. — but one consideration that is often overlooked is potential auto insurance rates. And this oversight could be a very costly one, depending on the vehicle.

There are a variety of factors that go into determining a car insurance premium, even when it comes down to the vehicle type itself.

Size – It’s a common misconception that smaller cars often have lower insurance rates due to the fact that they have better maneuverability and ability to avoid a potential accident. In actuality, the opposite is true.

“Statistics prove smaller, sportier cars are driven at higher rates of speed by younger, riskier drivers. Because they’re involved in more accidents, they’re more expensive to insure,” reports Kelly Blue Book’s website KBB.com.

Does that mean larger vehicles like trucks and SUVs are cheaper to insure? Not necessarily. Bigger vehicles mean there is a larger potential to cause damage to other vehicles in the event of an accident, which inflates liability costs.

Price/status – KBB.com states that the cost of a vehicle is the first and primary consideration for most insurance companies when setting the price of the policy. Insurers’ rationale is typically that the more expensive the car, the more expensive it is to repair — namely when it comes to replacing parts, especially on foreign luxury vehicles, or when an entire vehicle is “totaled.”

Engine size – Speed comes back into play here, as the more horsepower a motor has, the more likely the car will be driven faster, leading to a higher risk of accidents. If motor size is not an important factor to you when choosing a vehicle, KBB.com recommends opting for a vehicle with less horsepower.

Likelihood of theft – This factor is somewhat arbitrary, as there can be any number of reasons cars get stolen, from overall desirability to demand for rare parts or even demand for common parts. Unfortunately, it’s those more desired vehicles that can carry with them higher insurance premiums.

The National Insurance Crime Bureau’s (NICB) most recent Hot Wheels report chronicles the most stolen vehicles in the United States. Honda Accord and Honda Civic were the top two most frequently stolen, respectively, in 2014. The list was also inundated with sporty imports due to their high desirability and to the fact that many are convertibles, and soft tops are relatively simple to break into.

Age – When it comes to used versus new in the fight for lower insurance premiums, you may be surprised that there is no clear-cut answer. It’s commonly believed that new vehicles will just cost more due to the fact that they’re new, but the advanced technological safety features and structure of new vehicles drive down those costs. Cars can now more easily avoid accidents before they occur and can also better protect their occupants if an accident does happen.

On the other hand, used vehicles aren’t always cheaper, due to their likelihood of theft.

“Newer cars may be more desirable but are actually targeted for theft far less often, as they are often equipped with anti-theft devices and GPS tracking systems,” auto information research site DMV.org discloses. “Also, car thieves tend to target older cars because they can easily disassemble them and sell their parts for profit.”

With so many varying factors affecting insurance rates, you are not likely to find one single vehicle with the lowest possible premiums. Instead, speak with your insurance provider for more information and guidance.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Questions to Ask Before Leasing a Car

10 answers you need before signing for a lease

For some, leasing a vehicle isCarLease_070516 a better option than buying. Before deciding to go forward with a lease, consider looking into the following topics.

Before choosing a vehicle…

Lease specials:
According to Edmunds.com’s Director of Remarketing Joe Spina, automakers often offer highly discounted lease specials on slow-selling models in order to try to boost interest. When you walk into the dealership, make sure to ask the salesperson about any of these possible offers. However, the quote given will not always be the final price. See below for more information.

Once you have a specific vehicle in mind…
Fees:
The first thing you will want to ask after expressing interest in the lease specials is what the vehicle’s “drive-off” fee is. Drive-off fees are a combination of the down payment and additional fees. Of course, you want to pay as little as possible upfront; however, that means a higher monthly payment. Other fees include acquisition and disposition fees, which unfortunately cannot be negotiated, but the security deposit can be waived. No matter the fee, it never hurts to question the dealer.

Down payment:
Bankrate.com states that your down payment can consist of many things, and as mentioned above, some may be negotiable.

“It can be made up of payments [for such things as] the security deposit, title fees, capitalized cost reduction, monthly payments paid at signing and registration fees,” the website explains.

Interest rate:
Another negotiable aspect is what people in the industry call the “money factor.”

“The dealer converts the interest rate into a mysterious-looking decimal number. To convert the money factor back into an interest rate, multiply by 2,400. So if the money factor is 0.00125, multiply it by 2,400 to get 3 percent,” explains Senior Consumer Advice Editor of Edmunds.com Philip Reed.

Always ensure your money factor/interest rate is parallel to what you deserve for your corresponding credit score.

Residual value:
This is the amount the car will be worth at the end of the lease. You will want one that holds its value — that is, it has a high residual value. The figure is an estimate set by the leasing company, and you can always ask the dealer what it is.

Lease term:
Most terms are 24, 36, 48 or 60 months, but there are odd terms put out there designed to confuse you.

“A 39-month lease based on the 36-month residual value of the car will give you lower payments, but you’ll pay more overall,” offers Reed as an example. “And you might be driving for three months without a factory warranty, so a major breakdown could cost you big-time in repairs.”

Miles included:
The industry standard for a lease is 12,000 per year. So if you hear of a deal that sounds great but includes only 10,000 miles, it is obviously too good to be true.

Gap insurance:
You will definitely want to know this cost in the event of an accident — or any damage at all, including a mileage overage — before you return the lease vehicle.

“This insurance will pay the difference between what you owe on your leased vehicle and what it is worth if it is wrecked or stolen. You can get it with the lease or ask your insurance company,” Bankrate.com states.

Regarding the lease’s end…

Lease transfer:
Given today’s consumerism, flexibility is key, which is why car shoppers want to be able to change vehicles more often, even when under a lease contract. You may want to ask ahead of time if you will be able to transfer the lease to another person for the remainder of the term. Some dealers may not know the answer offhand, but leasing companies will, so it’s a good idea to ask beforehand so you know all of your options.

Open vs. closed-ended:
Most leases are closed-ended, meaning you return the car at the end of the lease, pay any costs due or buy the car at its residual value.

“If the car is not worth the residual value figure at that point, you’re not responsible as long as the car has normal wear and you haven’t exceeded the mileage limits,” Bankrate.com states.

Less common is the open-ended lease. If at the end of the term, the car is not worth the estimated residual value — as usually decided by an outside party assigned by the dealer — you pay the difference. This could lead to some unwanted hassles, but you should be fine as long as you read and agreed to all the fine print in your lease contract.

Once you obtain all the answers to these questions, you should be able to ascertain whether the deal will provide you with a better overall experience than buying a vehicle would.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Tips for Getting the Best Car Loan

Get the best loan possible

As with any big purchase, NewCar_Featuredwhen purchasing a car you’ll want to make sure that you get the best deal possible, and that requires being smart about getting a car loan. Many people tend to overlook certain things during this process — they want to get in and out and on the road — but even a small oversight could cost you big bucks.

“When you buy a car, make sure it’s something you can afford, something that truly meets your budget,” adds Senior Director of Auto Finance Melinda Zabritski at Experian Automotive. Otherwise, you could risk running into financial problems in the future.

To make sure you’re making the right choice regarding an auto loan, here are five tips to keep in mind before you sign on the dotted line:

Know your credit score – It’s a good idea to check your credit by getting a preapproved car loan. Your credit score helps determine your car financing interest rate and is based on your credit report. If you have a high score, you qualify for a better car loan rate than if you have a low score. Thus, if you don’t know your credit score beforehand, you’re at a disadvantage when it comes to getting a good rate.

“Most people think their credit score is worse than it is,” says Senior Consumer Advice Editor Phil Reed at Edmunds.com. “When people don’t know their credit rating, the dealer can tell them almost anything.”

Avoid add-ons – Often you can finance add-ons — anything from leather seats to chrome wheels — separately. And while it may seem convenient to purchase them on the spot, your wallet might not agree.

Car salespeople “are really there to make extra profit for the dealership by increasing interest rates and selling extended warranties and add-ons such as fabric protection and paint sealant,” Reed says. “Dealers can write other fees into the contract and give them official-sounding names. These fees are another attempt to take profit on the back end of the deal when the buyer’s guard is down.” If you’re really aching for upscale window tinting, check with other companies, which may offer it for less money.

Do your homework – Know that lenders aren’t obligated to offer you the best possible rate for which you qualify. In general, new cars typically offer lower interest rates compared with used cars. In 2007, for example, car dealers marked up loans by an average 1.8 percent on used cars and 0.6 percent on new ones. To avoid overpaying on your loan, inform the lender that you’re looking in various places for your vehicle or that you already have another offer. That may help you get a better rate.

Keep quiet about what you can afford – You don’t want to go to a dealership and announce the exact monthly payment amount that you’re willing to pay each month. That may cause car dealers to use the longest auto loan term available to figure out your potential rates for monthly installments. For example, a car that costs $25,000 with a five-year loan may require the same monthly payments as a $16,000 car with a three-year loan — but you’ll end up paying more in interest for the higher-priced vehicle. Sometimes, if the car salesperson knows how much you can afford per month, negotiating a lower purchase price may be harder to do.

Go for the shorter-term loan – Most car buyers tend to lean toward longer loans because the monthly payment is smaller. However, in the long run you’re actually paying more the longer the loan runs due to interest.

“You definitely pay more in the long run because these long loans typically have high-interest rates,” says Mike Quincy of Consumer Reports Autos. Is there a perfect loan time for your vehicle? “Try to limit your car loan to about 48 months,” advises Quincy. “That’s the optimal amount of time you should pay for your car.”

Stop by today to find out more about what rates we can offer so you can shop with confidence.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.