Category Archives: New & Used Auto Loans

What Does It Mean to Lease a Car?

You have to add a leased car to your auto insurance policy. You might have to make a down payment. And you’ll definitely have to make monthly payments on a leased car. Leasing a new car sounds pretty similar to buying a new car with an auto loan, doesn’t it? In a way, yes, but there are some important differences between the two. myAutoloan is here to explain!

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What is leasing a car?

When you lease a car, you do not own it. You do not have any ownership interest in the vehicle. You get to drive a (typically) new car for a few years and you only pay for the depreciation that occurs while you have the car, plus interest.

Leasing a car is a little like renting a car, but for a really long time. Think years, not a weekend getaway. You make payments for the use of the car over a certain time period, then return the car at the end of the period. Most car leases are for 2-3 years. When your car lease is up, you have the option to buy the leased car or give it back to the dealer and walk away.

Why do people lease cars instead of buy cars?

As you can see, buying a car outright isn’t the only way to get a new set of wheels.

According to data from Statista, 28.28 percent of the new cars in the U.S. were on lease in the fourth quarter of 2017. After they weigh the cars, many drivers choose to lease instead of buy. One option isn’t necessary better than the other. In the end, it all depends on your preferences.

Pros to car leasing

  • You can make a lower down payment
  • You could get a lower monthly car payment than buying
  • You can get the latest safety features and technology
  • You can drive a new car every few years
  • You have lower repair and upkeep costs since the car is newer and you’re under the factory warranty
  • From month-to-month, it can be less expensive than buying

Cons to car leasing

  • You can’t modify the car as you please
  • You have to keep  your annual mileage under a certain amount, typically 12,000 miles
  • If you drive hard and fast, you could face expensive wear and tear charges at the end of your lease
  • It’s expensive to terminate a lease early
  • Lease contracts can be confusing and filled with confusing lingo
  • You can’t sell the car or return it whenever you want

Can I lease a car?

Yes, you probably can! You will likely need to make a small down payment, less than the usual 20% of a car’s value if you were buying, and then make monthly payments per the terms of your lease.

Your monthly payments are likely negotiable. Search for carmakers’ “lease specials” and check out dealership websites to learn about special lease offers. You don’t need a perfect score in order to lease a car, but you might need a good one in order to qualify for a lower interest rate. Most low interest and “no down payment” lease incentives are reserved for drivers with admirable credit scores. A credit score below the mid-700s may not qualify.

Can I buy my leased car?

Yes, you can buy a leased car with help from myAutoloan! We can connect you with a competitive lease buyout loan that gives you the freedom to buy your currently leased car. Use the loan to buy your car at the end or before the end of your lease—it’s up to you. Get started by filling out our fast, secure, and cost-free application. You’ll be matched with up to four loan offers from real, verified lenders who are ready to do business with you.  

If you’d rather buy a car, we’re here for you, too. Get ready to buy a car and compare up to four auto loan offers in minutes on myAutoloan.

What’s the Best Age & Mileage for a Used Car?

You’re all about saving money, which is why you’re looking to buy a used car instead of a new car. You’re wondering, though… how old is too old? At what age are used cars more of a financial drain than an asset? The answer may surprise you. (Hint: To some degree, age is just a number.)

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Vehicle age, mileage & depreciation

How does depreciation work?

Cars depreciate. They lose value. Your goal is to buy a used car that’s already done its bulkload of depreciation. Is it possible? Sure is.

First, you’ve got to understand how depreciation works. Let’s say you buy a new car for $34,968, the estimated average transaction price for light vehicles in the U.S. in 2017, according to Trusted Choice Insurance.

As soon as you drive off the lot, the car is worth $31,121. That’s an 11% decrease in value.

When it’s time to celebrate your car’s first birthday, your car will have decreased in value by 25%. It’s now worth $26,226.

At three years old, your car’s value will have decreased by a whoppin’ 46%. It’s worth $18,882.

And five years later? Your precious ride is worth a mere $12,938. It’s value will have decreased by 63%.

Keep in mind that depreciation isn’t an exact science. Some depreciation factors can’t necessarily be measured in dollars and cents. A brand, color, or vehicle type can unexpectedly fall out of favor with the public, making a car that’s only one or two years old unattractive to many buyers.

Gauge the age. Find your sweet spot.

Buying a used car that’s juusstt the right age can help you beat the biggest slump in depreciation. Let another driver take the biggest hit so you don’t have to. According to various car buying and selling resources, including Edmunds, Consumer Reports, and U.S. News & World Report, the “right age” can vary greatly.

One to two years old – Edmunds recommends buying a car that’s one or two years old, driving it for three years, and then selling it before the next big price slump. This might be a good option for drivers who love having the latest gadgets and don’t mind maintaining a car payment.

Two or three years old – According to Consumer Reports, two- and three- year old used vehicles have already taken the biggest depreciation hit. Continuing ownership expenses, like insurance and taxes, are still a bargain, and you still get to drive a vehicle with most new modern amenities.

Up to 10 years old – After gathering data on depreciation, problems, and repair costs for cars from one to 10 years old, U.S. News & World Report found that even 10-year old cars cost more in depreciation than they absorbed in repair bills.

Whoa, whoa. Read that again. They found that even 10-year old cars cost more in depreciation than they absorbed in repair bills. That means to some degree, you don’t necessarily have to worry about a car’s age being a burden.

Their analysis shows that the best way to find the cheapest used car is to buy the oldest modern car that you can still find running and in good condition. For the best safety features, stick to cars that are 2012 and newer. That’s the year electronic stability control became mandatory for all cars.

In the end, U.S. News & World Report suggests “buying as old a car as you’re comfortable driving that’s in good condition and reflects diligent care form the former owner.”

With most modern, relatively well-maintained cars, age is just a number. Ah, thanks for the wisdom U.S. News & World Report.

Want specifics on a used car you’ve been eyeing? You can actually calculate the depreciation of any car using the car depreciation calculator. Just enter in the purchase price of the vehicle, it’s current age, and the number of years you plan on owning it. The calculator will tell you the annual, total depreciation and estimated value of your vehicle at the end of the ownership.

Consider maintenance over mileage.

If age is just a number, is mileage a big deal when buying a used car?

Most drivers average 12,000 miles per year. If the used car you’re looking to buy has far more average miles/year than that, start asking the owner or dealer questions. How and where was the car driven? Why so many miles? Was the vehicle regularly maintained during this time and do you have the service records to prove it?

Typical used car mileages

  • One to two years old: 12,000 to 24,000 miles
  • Three to four years old: 36,000 to 48,000 miles
  • Five to six years old: 60,000 to 72,000 miles
  • Seven to eight years old: 84,000 to 96,000 miles
  • Nine to ten years old: 108,000 to 120,000 miles

If the previous owner can show that the car has been continuously well-maintained, a few extra miles here and there doesn’t need to be a deal breaker. Like U.S. News & World Report said, the best way to find the cheapest used car is to buy the oldest modern car that you can still find running and in good condition “and reflects diligent care from the former owner.”

Find your best used car (and your best used car financing)

There is such a thing as the “used-car-buying-sweet-spot.” It’s just different for different drivers. Once you’ve found a used car you feed good about driving, whether it’s two years old or five, apply for a used car loan through myAutoloan. You’ll receive up to four financing offers and can choose the best finance rate for you.

Should I Buy a Convertible or a Coupe?

You’re not a fan of crossovers or SUVs. Definitely not a fan of minivans. You’re in the market for a new car and you know exactly what you want to buy: a sports car. More specifically, a performance car that makes you feel downright amazing. And hey, we don’t blame you! There’s science to back up the emotional and psychological power of performance cars.

In fact, Ford released a study in early 2018 that found driving a sports car ranks high on the list of things that make people happy. It’s even more enjoyable than kissing and “could be a valuable part of your daily wellbeing routine,” says psychologist Dr. Harry Witchel.

But you already knew how spectacular it feels to drive a sports car. You’re ready to buy one! But which type? Will you go with a convertible or a coupe? We’ll help you weigh the pros and cons of convertibles and coupes to find your best ride. Then we’ll help you compare your best auto financing rates!

Convertible or Coupe?

Buying a Convertible

A convertible sports car has a retractable roof. The roof can be folded down or removed either partially or entirely.

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PROS

You feel it all. Enjoy the sun on your face and the wind in your hair. There’s no fixed roof or door frames to limit your visibility or your fun. Put the top down, your sunglasses on, and hit the road feeling free and open. (Just watch out for the bugs.)

You’re more connected to the personality of the car. Ross McCammon of GQ wasn’t a fan of convertibles, until he drove the Mercedes-Benz C 63 S Cabriolet. Putting the top down meant removing a physical barrier between him and the car’s personality. For the first time he could fully experience “the growl of the start-up and turbo-whine acceleration and the rumbly idling.”

“A convertible doesn’t just make the experience louder and windier,” writes McCammon, “it makes a great car less anesthetized, more awake.” Convertibles offer the ultimate driving experience.

Convertibles are versatile! Most convertibles easily transition back into a sedan with the push of a button.That means you can enjoy the wind in your hair one day and a roof over your head the next when nasty weather hits.

CONS

Convertible roofs can be complex. Convertibles come with complex machinery to bring the top down and back up. If any of these pieces or parts break, you could be in for a big repair bill. Just think–what if your convertible top got stuck in the down position during a rainy week? Do you stop driving?

Convertibles can fall prey to “chassis shudder.” A car’s fixed roof plays a major role in its structural support system. Without a fixed roof, a car can succumb to a condition called “chassis shudder” or “scuttle shake.” This condition makes any uneven road feel even bumpier. Your smooth ride becomes shaky.

Convertibles can be expensive. If affordability is important to you, you might want to think twice about buying a convertible. They tend to be $5,000 to $9,000 more expensive, on average, than comparable sedans or coupes, writes Nationwide.

Buying a Coupe

Coupes have sleek, sloping rooflines, two doors, and two functional seats up front, plus two tiny seats in the back. They have a full-on metal roof rather than a large hole behind the top of the windshield where a convertible soft-top goes.

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PROS

Amazing handling. The fixed roof and extra rigidity of a coupe leads to better handling than a convertible. Coupes are also lighter than convertibles since they aren’t carrying all the mechanisms that bring the top up and down.  

Coupes are the epitome of style. Let’s be honest. Some convertibles look less than sleek with the top up. “The coupe has style, not just because of how it looks,” writes CarsGuide, “but because of that devil-may-care absence of drudgery and practicality.”

Coupes are lithe, sleek, and muscular. “With the exception of very few convertibles, no other car will look as good as a coupe,” continues CarsGuide.

Coupes are fun to drive, rain or shine. No need to put an end to a great drive because of a little rain. Since a coupe has a fixed roof, there’s no need to pull over and raise the top when the weather takes a turn for the worse.

They’re cheaper than convertibles. For the most part, couples are cheaper than their convertible counterparts. Plus, there’s no need to worry about any complex roof mechanisms breaking after a few years.

CONS

Space is hard to come by. Don’t expect to enjoy a lot of space…anywhere in the car. In the front, sloping rooflines make coupes especially tough for tall drivers to enjoy. Rear-seat passengers have even less space. A coupe’s rear seats may work for younger children, but these seats are usually little more than a shelf with seatbelts. And cargo space? Don’t even think about packing the trunk for an extended vacation. You’ll be lucky to manage a few bags of groceries.

The top doesn’t come off. A fixed roof means the only way you’ll be feeling the sun on your cheeks and the wind in your hair is if you roll the windows down.  

Take the first step in buying a sports car

Which sports car will you buy? Convertible or coupe? We’re all about comparison shopping, which is why we provide you with up to four new car loan options to review at your leisure. Whichever performance vehicle you choose to drive, help make sure you get a great deal on financing by comparing your loan options first. myAutoloan can help you get in the driver’s seat of the sports car you want. Apply for a new car loan and compare your offers today!

5 Questions to Ask When Buying a Used Car from a Private Seller

For many drivers, buying a used car from a private party is the only way to go. You don’t have to deal with a high pressure car salesmen; there’s less paperwork to complete; and there are no mind games to play. There’s just two people hoping for a great deal on a used car. One is buying, the other selling. Simple.

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As simple as it sounds, used car buyers can often feel left out in the cold. The Internet is filled with articles on how to play hardball with a professional car salesman, but what about when you’re trying to buy a car from your neighbor, a friend, or an everyday person you’ve never met? myAutoloan is here for you throughout the car-buying process, from research to financing.

Before handing over the cash to a private seller, ask these five questions to help make sure you end up with a good deal on a great used car.

Ask These 5 Questions Before Buying a Private Party Used Car

1. How many miles are on the odometer?

Used car sellers will typically include mileage in their ad, but if not, go ahead and ask this question before seeing the vehicle. Enter the mileage, make, model, year, and presumed condition of the used car into a site like TrueCar to gauge the value of the vehicle against the seller’s asking price. Depending on the situation, you could have instant negotiating ammunition! You can also research common problems with the vehicle make and model at different mileages, then ask the seller if they’ve already addressed them or seens signs of them surfacing.

2. Why are you selling the car?

This question helps you out in a few ways. One, it helps you gauge the seller’s urgency, and thus, how much wiggle room you might have with the asking price. Are they tight on cash? Selling for sentimental reasons? Already have a new car in the driveway?

If you’re dealing with a private seller who’s honest to a fault, you could be lucky enough to learn details about the car’s condition you wouldn’t otherwise notice. The seller might divulge that the car is a gas guzzler, isn’t reliable on long road trips, or the clutch sticks when releasing.

3. Have you had the car since it was brand new?

If you’re talking to the third, fourth, or fifth owner of the car, the information you get will only go so far. The more owners the car has had, the more incomplete the current seller’s info might be.

Play detective (and protect yourself) by ordering a CarFax Vehicle History Report or more thorough VinAudit Vehicle Report. You’ll get an instant vehicle history report with 60+ problem checks from VinAudit.com, an official provider for the National Motor Vehicle Title Information System.

If you’re not talking to the first or second owner of the vehicle, follow this question with, “Who did you purchase the vehicle from?” or “Where was the car bought?”

4. Do you have service records?

Unless you’re looking for a used car to tinker with and test out your own auto repair skills on, you want a car that’s been well maintained!

A CarFax report will include some service and maintenance records, but it likely won’t include everything, especially if the owner relied on “mom and pop” auto shops around town. Ask for receipts and evidence that maintenance was performed at regular, manufacturer-specified intervals. These receipts will usually note the odometer reading at the time of service, helping you verify the car’s history.

If the seller can’t produce any service records or even remember the last time they had the oil changed, it might be time for you to find a different used car to buy. You don’t want to wind up with a used car that’s unreliable and unsafe–no matter how cheap it is!

5. Can I have the vehicle inspected by my mechanic?

You had your home professionally inspected before you bought it. Why not do the same  with a used car? Sellers with nothing to hide won’t balk at a request like this. Sellers with something to hide, however, will resist.

Finance your used car purchase today!

Buying a used car from a private seller is a great move when it comes to saving money, and using myAutoloan for auto financing is a great move when it comes to saving time! If you’ve asked these five questions and found a reliable ride you can’t wait to drive, then apply for a private party auto loan. We’re here to help you buy your used car today.

4 Things You Must Do After You Buy a Used Car

Congrats on your new-ish car! You got a used car loan and a great deal on an amazing ride, but are you ready to hit the road? Keep those shiny rims where they are for just one second. There are a handful of must-do tasks you need to take care of before you can drive with ultimate peace of mind.

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After You Buy a Used Car…

1. Update Your Important Accounts and Paperwork

First things first — you need to stay legal! No matter what state you’re in, you can’t drive on public roads unless your vehicle is registered. If you buy a used car at a dealership, they’ll usually help you with the paperwork so you can drive with temporary registration before leaving the lot. They may charge a small fee, but it’s worth it if you just can’t wait to get in the driver’s seat.

In some states, like Maryland, Massachusetts, Indiana, and Michigan, to name few, you can complete the whole vehicle registration process at the dealership.  

This is also the right time to contact your car insurance company and update your policy. You may need to adjust your level of coverage. For instance, if you’ve been driving an old beater around for the last few years, there’s a good chance you didn’t have Comprehensive and Collision coverage on your policy. Sometimes it doesn’t make financial sense to pay for these two coverages on an older model vehicle. However, if you’re now driving a used car that’s only a few years old, you might want to include Comprehensive and Collision, as they could help pay for repairs to your sweet new ride in the event of accident or collision.

If you bought the car used from a private owner, you may also want to call the vehicle manufacturer and let them know you’re the current owner. That way you’ll be quickly notified if any safety recalls are issued. The manufacturer’s customer service phone number can be found in your owner’s manual or online. The manufacturer will record your name and address, along with your car’s VIN, in their database for further communication.

You’ll also want to update any parking permit information tied to your car (like for campus parking or a work garage) and vehicle specific roadside assistance memberships.

2. Invest in a Thorough Tune-Up

This step may not be essential if you bought a certified pre-owned car (CPO) since these cars have to meet age and mileage requirements, as well as go through an inspection at the dealership.

For example, Edmunds.com reports that Toyota requires dealers to put used vehicles through a 160-point inspection process. If a car passes inspection, it’s awarded an extended warranty and deemed “certified pre-owned.”

Buying a used car from a private party is different. You may not have all the service records, you don’t know how truthful the seller is being about the condition/history of the car, and there may be a hidden problem lurking under the hood. Avoid unexpected car troubles by bringing the car to a mechanic you trust and investing in a basic mechanical inspection and tune-up. Ask the mechanic for a rundown of services you need to drive safely right now, and a list of services you should prepare for in the future.

At a minimum, top off essential fluids, change the oil, change all filters, and rotate the tires.

3. Check for Open Safety Recalls

A vehicle safety recall is issued when a vehicle, type of vehicle equipment, or part of a vehicle, does not meet Federal safety standards. According to CarFax, more than 47 million vehicles have at least one open safety recall. That’s about one in five vehicles out on the road today!

Check to see if your car has an open safety recall, especially if you bought it used. SaferCar.gov offers a convenient tool for looking up this information. All you need is the car’s VIN number and an internet connection.

Regardless of whether or not you’re the original owner, you still qualify to have your recalls repaired free of charge (even recalls that were announced before you bought the car). According to the National Highway Traffic Safety Administration, the statute of limitations for no-charge recall repairs is 10 years from the original sale date of the vehicle.

4. Clean and Accessorize the Car

Now for the fun part! Wash, vacuum, and wipe down the interior of the car if it wasn’t detailed before you bought it. Pick out new floor mats, seat covers, and a sun shade to express your personality.

After you buy a used car, you may also want to personalize it by:

  • Adding a phone mount
  • Organizing the trunk with bins or baskets
  • Upgrading your rims
  • Designing a custom license plate cover
  • Keeping it smelling fresh with your favorite scents

Now that everything is in order, it’s time to make the most of your used car! Take a road trip, hit the highway, and enjoy the ride. You deserve it. And if you’re still trying to sell your old car to make room for a new one? Check out our four simple steps to increase the resale value and appeal of your car.