Tag: car extended warranty

What Should I Consider Before Getting an Auto Loan?

by Advantage One, posted in Budgeting, Credit, Lifestyle, Loans, Saving, Tips & Best Practices, Uncategorized

Q: I’m ready to finance the purchase of a new car. What do I need to know before finalizing my auto loan?

A: Financing a new car is a big decision that will impact your monthly budget for the entire term of the loan. That’s why it’s important to weigh all relevant factors carefully before making your decision. 

Here are five questions to ask before taking out an auto loan.

1. What is the actual cost of this car? 

In many dealerships, the sticker price on a car and the one you end up paying can be vastly different. In some lots, you can negotiate with the salesperson to get them to lower the price. Meanwhile, in other lots, you may find out at the last minute that you need to pay extra fees that will bring the price up significantly. Before you sign on an auto loan, make sure you know how much you’re actually paying for your new wheels.

2. Is this the lowest interest rate I can get from any lender without extending the term?

The interest rate on your loan determines how high your monthly payment will be and how much you’ll be paying overall for the privilege of financing your car. The range of rates you’ll be offered will depend on the lender, the market rates at the time and your credit score and credit history. Be sure to shop around and check out what different lenders can offer you before making your decision.

3. What will my monthly payment be with this loan? 

Your monthly payment will be determined by the loan amount, the annual percentage rate on the loan and the loan term. It’s best to use these details to run the numbers on a potential loan to be sure you can afford the monthly payments (there are hundreds of monthly payment calculators throughout the internet). Defaulting on an auto loan can mean risking the repossession of your vehicle and a massive dent in your future credibility. You’ll also be better prepared to incorporate this new payment into your monthly budget if you have a number to work with before finalizing the loan.

4. Are there any available incentives that can bring down the cost of this loan?

Before closing on a loan, ask the lender about any available incentives that can help you save on the cost of the car. Here are two incentives you may be able to access:

  • The cash rebate. This incentive allows borrowers to apply a dollar amount to the price of a vehicle, effectively bringing down the price. The borrower receives the discounted amount in a cash rebate when the loan is finalized. These rebates are typically offered regionally or under specific circumstances, such as to repeat buyers of a certain brand, buyers who have left a competing brand, recent graduates or members of the military. 
  • Dealer cash. This incentive is similar to the cash rebate, but it’s offered by the dealer instead of the automaker. Dealers may offer these incentives near the end of the month, quarter or model year, as they scramble to reach a quota set by the automaker. The dealer will be compensated for reaching this quota and is consequently open to bringing down the price for the buyer. However, you’ll only know about this incentive if you ask.

5. Do I really need an extended warranty?

Dealers can be overly eager to sell extended warranties to new car owners, but these may not be in the buyer’s best interest. If you’re purchasing a new car, it likely comes with a factory warranty covering the vehicle up to 100,000 miles, making an extended warranty an unnecessary expense. If you’re buying a used car, have it thoroughly inspected by a mechanic and get a detailed vehicle report on AutoCheck.com or Carfax.com to see if you need the extra protection that an extended warranty provides.  

Your Turn: Which factors do you consider before finalizing an auto loan? Tell us about it in the comments. 

Don’t Get Caught in an Auto Warranty Scam

by Advantage One, posted in News & Events, security, Tips & Best Practices, Uncategorized

Another phone call, another scam.

It can sometimes feel like scammers have some kind of competition going to see who can hit you with the most robocalls in a day. In fact, according to Truecaller, scams and robocalls account for 67% of all phone calls in the U.S. Each American will receive an average of 28 of these calls a month. More than just an annoyance, scam calls cost 56 million Americans a financial loss in 2020.

One of the most common scams pulled off over the phone is the auto warranty scam. Here’s all you need to know about this scam and how to protect yourself from falling victim:

How the scam plays out

In this ruse, scammers posing as representatives of a car dealer or manufacturer will call to tell you that your auto warranty is about to expire. The scammer will then segue into a pitch for renewing your warranty. During the call, you may be prompted to press a number to stay on the line, and then are asked to provide personal information to continue the process of renewing  your warranty. If you follow instructions, you will be playing right into a scam.

How to spot a scam

It is possible for legitimate auto warranty companies to call you about purchasing or renewing a warranty. Look out for these red flags to help you pick out the authentic calls from the scams:

  • Hello, it’s Mr. Robot calling. When it’s a robocall on the line, you’re almost certainly talking to a scammer. A legitimate company will hire a live salesperson to promote their services.
  • Feel the pressure? Scammers notoriously lead victims to act without thinking by claiming their offer is available for a limited time. If a caller pressures you to act now, you’re likely talking to a scammer.
  • Just a small fee … Is the caller demanding a small processing fee, or a down payment on the plan before supplying you with real details and information on it? If yes, you’re being scammed.
  • You’ve got mail! Scammers aren’t content with playing games over the phone; they’ll often send bogus documents in the mail, too. These can be disguised to look like genuine alerts from the DMV or auto manufacturer, prompting you to act now because your auto warranty is expiring. Of course, when you call the number on the letter, you won’t be connected to the DMV or auto manufacturer, but to a full-blown scamming operation.

Protect yourself

Follow these tips to keep yourself safe from auto warranty scams and similar ruses:

  • Never share your personal information, such as your Social Security number, credit card information or checking account details, with an unverified caller.
  • It’s also a good idea to screen all incoming calls by checking the Caller ID before answering the phone. Legitimate telemarketers are required to display their phone number and the name/or phone number of the company they represent. If this information is missing, it’s likely a scam.
  • It’s important to note that scammers often spoof authentic phone numbers to make it appear as if they are calling from a legitimate company. If you suspect spoofing, you can always ignore a call, and then call the number of the company that allegedly reached out to you, to ask about the contents of the call. If the call was indeed spoofed, the company will not be aware that the call was made.
  • If those robocalls are not letting up, consider blocking the number on your phone. You may have to do this several times, as scammers often use more than one phone number to carry out a scam.

Alert the authorities

If you are targeted by a suspected scammer, you can alert the Federal Communications Commission (FCC) at the FCC complaint center . These calls likely violate telemarketing and robocall regulations, and by alerting the FCC, you can help them identify the scammers.

If the call you received involved fraud, you can also file a complaint with the Federal Trade Commission at ftc.gov.

Robocalls are incredibly annoying, but getting scammed is more than just an irritating experience. Follow our tips to protect yourself from auto warranty scams and similar ruses.

Stay safe!

Your Turn: Have you been targeted by an auto warranty scam? Share your experience in the comments.

Learn More:
fcc.gov
thebalance.com
cylanda.com