Each person who utilizes credit, from credit cards to auto loans, has three standard credit scores, as a person’s creditworthiness is tallied separately by the three major credit reporting agencies.  The scores – known as FICO scores, for Fair Isaac Corporation, the company that developed and pioneered credit scoring about 50 years ago, range from 300 to 850.  The most current national average suggests that the national median score is about 675.
So what does one do if they want to improve their credit score?  Let’s say you would like to consider an auto refinance  loan but think you need a higher credit score to do so. 

There is no doubt that the effort to raise your score is a very difficult one.  Consider working with a credit repair company to assist you.  What you need is to find the right solution for you, as every situation is different.  If you work with an outside company, you need to make sure that your consultant will provide a private and confidential review of your current financial situation. These days, credit is important for securing your next mortgage, auto loan or credit card. This is why it is so important to take control of your personal credit score.

Getting a Higher Credit Score

Improving your credit is not only worthwhile, it a smart thing to do.  A common misconception is that getting more credit means that you are more credit worthy.  That is completely incorrect because that’s not what happens.  For example, throughout the year, many retailers and credit card companies often offer you the chance to save 10-20% or more on purchases by opening a credit card account.  If you are also looking to purchase buy a car or trying to get a car refinance loan during that time, you might want to stop and think twice about signing up.

Why?  Because by opening several credit lines in quick succession can actually lower your credit score.  This score is used by every company or business that provides credit from car dealerships to mortgage lenders and they calculate just how likely you are to repay your debts. You need to know that lower scores mean you may be charged higher interest rates on auto loans and other types of borrowing.  They can also affect you in less obvious ways.  Here are a few key principles that you can follow to raise your credit score.

1. Basically the most important way to improve credit scores is also the least complicated.  Pay your bills in full and on time.  Your overall history of making payment on your current bills accounts for about 35% of the FICO score.  Missing credit card payments or submitting the minimum due each month will immediately lower scores, as will any debt collections or bankruptcy filings that show up on your credit report.  The only good news here is that credit scores reflect your most recent activity, so major negatives like collections will eventually mean less and less, even if it take years to work their way off your credit report.

2. Build up an active and lengthy credit history.  This means it’s usually better not to close out all of those old credit cards – unless new ones are replacing them – because keeping them open builds your credit history.  This makes up about 15% of the FICO score.  Keep a few dormant accounts active.  This will help lower the balance to limit percentage since limits are factored into the credit utilization formula.

3. Don’t open new accounts within 60 days of making a major purchase.  This results in about 10% of your score.  Taking out new credit lines raises red flags because it makes you look riskier.  This is why it’s best to avoid all those retail cards during the holidays – unless of course, a temporary decline in your credit score is no big deal.  Just be smart and think twice about your future purchases and what looks likely to take place over the next few months.

4. Maxing or topping out your credit cards will drop your score like a rock.   Even using 50% or more of your limit can cause problems because it increases the risk that you may not be able to repay.  For anyone looking to boost their score the key is to maintain a low “credit utilization” level.  This refers to the percentage of available credit that you have on each of your credit cards.  The credit utilization level falls under a complex category known as “amounts owed.” This makes up 30% of the FICO score.  If you have five credit cards with a $5,000 credit line each, for example, it’s not wise to carry a balance of more than $2,000 per card.  It’s better to carry smaller balances on several cards than to pile everything onto one card.

5. Get a copy of your credit report and make sure your credit report is accurate.  This is very important.  Since credit scores are based on credit reports, it’s very important to make sure the information in your reports are fee of errors and fraud.  Federal law gives you the right to get a free report from each of the major credit bureaus once per year.

6. Have a wide variety of credit experiences and loans, over time.  This is called diversification and means that you have had and get credit for having a variety of loans, so it’s better to have an assortment, including installment plans like auto loans or mortgages rather than simply credit cards.

Want some help to improve your credit score?  Fast, efficient and effective help is just a click away – Improve My FICO Score

If you have a good credit history, you will probably not have any problems getting the auto loan you need. However, without a good credit history you might have some difficulties getting an interest rate you can afford. The lack of a good credit score does not mean that you are somehow irresponsible. Everyone has the occasional financial set-back. Unfortunately, lenders do not know you personally and need to rely on your credit score to determine whether or not they should lend you money.

Therefore, you should first find out whether or not you have a good credit score. If you have a good credit rating, above 700, you can walk into a dealership with confidence. If your rate is not as high as you would like, you will be able to take steps to compensate for your poor credit rating.

You can get your credit report free once every year, but your credit report does not contain your actual credit rating. There are two ways you can get your numerical credit rating.  The first is to pay a company to send it to you. The second way is to sign up with a company that offers you a free credit score.  You will need to sign up for a trial of their credit services in order to receive your score. Make sure that you cancel your membership before the trial period that you have. Otherwise, you might be charged.

If your credit rating is below 700, try and raise it before you buy a car. Work on servicing and paying down any debt you have.  Make payments on time or early.  Within a year, you should see a marked improvement in your credit score. If you have never taken on any debt, such as an auto loan or credit card, credit agencies have no credit score for you.  This is also called a “thin file” and means that there is not enough credit history to review.  A non-existent credit score can look just as bad as a low credit. Apply for a credit card and use it, making your payments on time each month.  Go to your banker or credit union and obtain a small personal loan.  The amount can be $1,000 so the point is to pay it on time, and payoff. This will let lenders know that you are responsible when dealing with your debts.

Sometimes, however, you just cannot wait to buy a  new car.  Your old car might have been in an accident and you need a car to get to and from your job.  If you do not have time to improve your credit score, consider asking a trusted friend or family member to be a cosigner.  Make sure that you can make the payments before you ask a friend to co-sign for you. For many individuals, getting an auto loan is the most stressful part of the car buying experience. Want to reduce some of the stress?   Search online for a real lender, or someone that you can see is really in the auto lending business and apply.   Better yet, if you can get multiple quotes from auto finance companies like myAutoloan.com, you can compare and save time and frustration that you would have to go through at the dealer.  Fortunately, if you do your research in advance you will be fully prepared for the auto loan process.

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A private party auto loan is a loan where a bank or credit union gives the loan to the consumer when they purchase a motor vehicle from a private person.  What is great about these loans is that the lender utilizes the car you are purchasing as collateral. If you cannot pay your loan as agreed, then the bank repossess the motor vehicle.  This helps the bank or credit union give out loans more frequently and easily than through a car dealership.

Now, of course, this means that the consumer works with a private individual instead of a car dealership.  However, dealing with a private individual has its advantages thanks to this loan process.  The consumer is able to facilitate a relationship with both the lender and the individual selling the motor vehicle.  Extensive communication with the seller aids in getting to know the car in greater detail and will allow you to get a CarFax report to verify the background and condition.

A relationship with the bank or credit union helps when negotiating the loan in question.  At a dealership, the loan process and seller of the auto are all through the car dealership.  Banks work through a dealership in a process known as an indirect loan, and are very strict in their loan requirements.  They also allow dealers to mark up the loan so you invariably pay more interest than you would if you went direct to a lender.  There is more flexibility when working directly with the financial institutions than when you use the car dealerships and dealer financing.  It is important to know that when you work directly with lenders will also save you money because you will be getting the lowest APR available, especially when you can get more than one quote on financing.  Dealerships always have a significant mark-up on the autos they are selling.  By using a private party auto loan, you simply work with the seller directly (aka, a private party who is usually selling their car), which will allow you to negotiate and most likely, keep money in your wallet.

To find a lender and get an all in one multi-quote offer, simply go online to myAutoloan.com while searching for cars you want to investigate at the many used car sites, at the same time you are searching for a loan.   Since most lenders provide online forms, you can work out everything online instead of at a busy car dealership.  It’s always best to compare side by side, the offers, so that you can select the offer that is best for you. 

Keep in mind, however, that online lenders are of equal quality to any bank lender through a car dealership.  In fact, they might even be the same ones.  The lenders will require typical information for any loan with specific requirements.  These include, but are not limited to, a social security number, consistent residency of at least two years or your last two residences for more than 6 months, and proof of age and employment.  Many national lenders require a minimum income of at least $500 a week or $26,000 annually with proof that you were employed at your last two jobs for at least 6 months.  Always remember these facts, no matter how much you can save with a private party auto loan that the loan is still a loan and the auto will be used as collateral.

Always check your credit score when deciding to purchase a product like a motor vehicle.  Once you know your credit, try a private party auto loan.  You will save money and purchase the car you want thanks to a person-to-person auto loan.

Does Vehicle Refinance Require an Appraisal?

So how much are we really talking about here? For example, let’s say you bought a new car in the summer of 2008.  Just for this example, let’s say there were a few blips on your credit report that lowered your score and so the dealer told you that your auto loan would be 11 percent on a 60 month loan for a $24,000 car. Your monthly payments are $500.

Now let’s say that you look for a car loan refinance and you find an actual finance company that will do the application and approval process all online.  There are big differences in licensed finance companies and websites that promise to refinance and just sell off your information.  But that’s another story, for now, you have determined that the website is legitimate and actually works for you to get you refinanced.  That’s great because, as we identified earlier, rates are now at the lowest point in years.  If you want to lower your payments, do another 60 month loan.
 
If you want to lower the overall cost of the loan, refinance the balance that you owe on the car and do so in the fewest amount of months that you can, as long as you can handle the monthly payments. You could refinance the balance of your car loan and lower your payments to about $350 a month. 

How?  Because ideally, you have not only improved your credit, but you have been offered a very competitive interest rate and that could translate into a savings of nearly $6,000 over the life of the loan.

We could run a number of scenarios but one quick way to check out rates and payments is to use an auto refinance calculator to estimate payments and loan costs.  Other examples could well be more dramatic. In some cases, a new-car buyer could wind up with an auto loan based on an 18-percent interest rate. By refinancing at a competitive rate, the monthly payments would be slashed, and all it takes is about 10 minutes to fill out the application.

Regardless, you could save some cash by investigating the possibility of an auto refinance loan and get the New Year off to a great start.  Good luck and good financing.

The question is – what is auto finance going to cost you and how can you guarantee that it will not have adverse affects on your personal budget?

In the past, getting an auto loan has traditionally been getting the dealership to provide financing options for you.  It is never cheaper than getting a direct loan from an online finance company or even a direct loan from a participating bank loan. The interest rates on online quotes or bank loans are always lower than those obtained from an auto special financing dealer.  You still have to shop because they all have different rates but do your homework and you will be OK. There are many car dealers who will readily assist you in getting the right kind of financing for your car, all you have to know is that they will charge you more for the interest.

The rates are sometimes competitive, as each dealer wants to get as many cars sold as possible. Nowadays even if you have immense amount of debt or have filed for bankruptcy you can still be eligible to obtain auto financing for your car. Auto finance works the same way bank loans do. It is, after-all, a loan that you are taking from the car dealer.  We still recommend that you go direct first to see what competitive rates are and then, if you choose to, check out the dealer pricing.

As you can clearly see, purchasing a car cannot get any easier than this.

Technology, however, has also made it possible for individuals to get loans for an auto loan using non-conventional methods, such as the Internet.  Here you do not need to go to a dealer to sit in the penalty box, waiting for a finance manager to bring you a special deal he was only able to get for you today, and only if you sign within the next 30 minutes will it be administered. You can normally apply over the Internet and get approved within as little as 15 minutes.  Yes, if you are working with a legitimate licensed lender, such as myAutoloan.com, you won’t have any problem being treated right.

All in all it depends on whether or not you want to pay the installments every month. Remember to read the fine print; it can save you from making a $10,000 mistake by taking an interest rate that is 2% higher than what you can get from a direct lender.  Buying a car is a big decision, which will have an impact on your personal finances, so you need to be wise. Check out companies until you find one that will best suit your needs.

You have probably heard of auto refinance before. Or simply refinance. The term “refinance” actually refers to a financial situation wherein a borrower finds financing to pay off a current loan.  It’s really pretty simple and not difficult at all to accomplish.  Auto refinance is done less often than it is in the real estate market, specifically with home ownership.  In fact, refinancing is one of the most popular methods of getting financing for a home loan.

With auto refinance, the same thing applies. Auto refinance is basically paying off one loan with a new loan. The goal of auto refinance is to allow you, the borrower, to save some money from your monthly loan obligations.  That can be in reduced monthly payments and/or in reduced interest APR that also helps lower the monthly payment.  And as such, it is one of the best kept secrets in the financing industry.  For years now, people have refinancing their homes and saving thousands of dollars when rates go lower. However, the practice of refinancing car loans has not quite been at the level of home refinance, but it has clearly gain popularity with interest rates having been lowered to 25 year lows.
 
One thing that is so often overlooked is that if you have improved your credit over say, six months, you can actually get a lower interest rate than when you purchased your car.  This is almost always true if you’ve had a few late payments in years past but have been on time and have taken control of your credit lately.  Why don’t more people know this?  Perhaps the reason is most people don’t know that since an auto loan has so much less paperwork associated with it, compared to home loans, they are naturally skeptical about how simple they are.  Regardless, auto refinance is still a good choice for many people, provided that the situation is right, you’ve done your home work and you are serious about keeping your credit in good shape.

When to get an Auto Refinance Loan
The way for an auto refinance loan to benefit you is if you can get it when the interest rates are lower than when you originally made the purchase.  This is true for auto and for Mortgage rates.  Rates tend to move up and during economic challenged times, they move lower. Therefore, since interest rates are low, then it’s likely that auto loan rates are low also.  Low auto loan rates typically mean lower monthly repayments can be obtained and that you can save money in the long run by reducing the APR on the loan.
 
Only few people really understand the time value of money.  In other words, you need to keep in mind that the longer you pay for a loan, the bigger amount of money you actually spend for it.  It simply costs your more of your cash to pay for the loan.  Thus, in some poor credit situations, by the time you get the loan paid off, you could have paid more money on interest than on the principal.  Just make sure you take control of the situation and don’t allow that to happen.  This is why auto refinance is important for it is one of the few methods that could help you minimize loan costs and maximize your savings.

Who can benefit from Auto Refinance?
Almost anyone with an auto loan to his name can benefit from auto refinance. Even car buyers with bad credit can obtain auto refinance as a way for them to lower down their APRs.  Let’s say, for instance, you make an auto refinance loan for $16,500 on a new Honda Accord.  At the end of six months, you agree to pay off the amount at 21% APR. So for a few months, while you might be working on getting your credit back in shape with on time payment and reducing your overall debt,  your monthly loan payment will be $446.

After say 4 months, you decide to apply for an auto refinance loan.  However, this time, your loan rate is at 6% APR.   Your current monthly payment is $446 which gives you total interest charges of $10,283 at the end of your loan period.  Your auto refinance loan offers you a monthly payment of $319 with total interest charges of $2,639. Thus, by refinancing, you can save up to $7,600.  Yes, it really is possible.  Apply now to find out if you can benefit from an auto refinance loan.

You’ve decided to acquire another vehicle–great! Before rushing off to the dealership, you’ll need to consider how much you can afford in monthly payments. Deciding this point will determine whether you look for used or new auto financing.

Once you know about how much you can afford in monthly payments, it’s time to think about what type of loan you want from auto loan finance companies. Options for financing a car include loans for autos, new vehicles, used vehicles purchased through a dealer, private party vehicles, auto refinance, and auto lease buyouts.

Keep these points in mind when choosing an auto finance company specializing in vehicle loans:

1. Do I want to buy from a car dealer or from a private seller?

2. Do I want to purchase outright or lease the vehicle? Auto Lease buyout loans are commonly required at the end of the lease period if you choose to keep the car.

3. Will I be paying off my loan on-time or early? Some loans carry stiff prepayment penalties. Not all but just be aware.  Most reputable auto finance companies tell you up front if there are fees involved.  For most, the process is free and with no obligation.

Action Steps
The best contacts and resources to help you get it done

Learn about Auto Financing
Study the different types of auto financing solutions.  Each one will have pros and cons, depending on your situation. Get familiar with how a lease works, read the fine print and precautions about financing an auto directly through a dealer, and get tips on how to fix less-than-perfect credit.  There are a lot of places that this information is available but here is our recommendation after years and years of auto lending experience looking out for the customer.

We recommend:  Read and understand the sections of our Auto Buying Guide that provide you a quick guide to the steps involved in buying and financing a car.  It’s down to earth and easy to understand.

Get automotive financing even if your credit isn’t so great
If you have had credit problems in the past, does that mean you’re reduced to driving whatever you can afford to pay for with cash? Not necessarily.  Some companies making car loans specialize in customers with bad credit.  We work with many of those companies so that we have done the legwork and that will save you tons of time.   Many vehicle financing companies have partnerships with car dealers prepared to offer bad credit car loan programs on car and truck loans.  You may be able to pre-qualify for a bad credit auto loan regardless of past credit challenges.   We never know until you apply and there is no cost or obligation to find out, even if you decide to purchase.

Have one company do the legwork of finding car credit
The Internet has revolutionized how we do a lot of things, including how we look for auto loans. Look for websites that are secure, first of all.  Next, verify that you are under no obligation if you enter your information on a website. Bottom line, use the ease of the Internet to make auto financing fast, easy, secure, and hassle-free.  You know you are at the right place, right?  That’s exactly what we do and 7 years and millions of customers stand behind us.

We recommend:  (I wonder who that might be, LOL) myAutoloan.com  – They can put an end to applying at several sites on the Internet and driving all over town trying to get the best deal on your auto loan.

Tips & Tactics
Helpful advice for making the most of our Auto Buying Guide

Be extremely careful with your personal & business information while doing research on financing a car.  Make sure you are dealing with a reputable company with a good track record to prevent possible theft of your identifiable information.  BBB information can be a real time saver too.

Research, research, research.  Get quotes on automobile financing from several providers by using a finance company that will show you up to 4 loan offers and not run you around testing you with a one at a time approach.   myAutoloan.com does!
Be wary of automotive financing car dealers claiming to specialize in financing bad credit loans.  Make sure the vehicle is actually worth the stated price. Some less than honest dealers artificially inflate a vehicle’s price, generously reduce that inflated price, and finance the balance at high interest rates.

How it works – The auto refinancing process is similar to the mortgage refinance process, but it does not have the costs and fees normally associated with the mortgage process. Basically, you obtain a new car loan at a lower rate to replace your first loan.  Ten years ago, auto refinancing was pretty rare.  They were available but just not much was known about them.  Now that interest rates have dropped dramatically and we continue to sit in this recession, auto refinancing has become increasingly popular. If you decide that you want an auto refinance loan, consider letting myAutoloan.com assist you in the process.  It’s fast, easy and there are no fees or costs to see if you can lower your payments or reduce the APR% on your auto loan. Apply for a no obligation, no fee auto refinance quote online to see how current rates might save you some money.

How much can you save – Refinancing can save you a lot of money, if you play your cards right. For example, if you currently have an auto loan for $23,000 at 11% APR for 5 years, you’ll pay $500 a month. If you can refinance this loan payment to $400 a month, you can save $6,000 over the life of the loan! The higher your current loan rates are, the more you can save by refinancing. Many of our lenders offer auto refinancing rates around  4.75% -6% APR.  Of course, it always depends on your current credit rating at the bureaus.

Who should refinance – Any individual who have an expensive auto loan or who wants to reduce their monthly payments, or lower their rates should consider auto refinancing.  Consumers with expensive loans from a car dealer can save big by refinancing with a lower rate from myAutoloan.  If your credit scores have improved significantly since your original car purchase, you should be able to reduce your rates which will save you money in the long run.

What are the requirements – Not all auto loans will qualify for refinancing. Since most lenders require you to have at least $7,500 due on your current loan in order to refinance, you might want to recheck and take a look at your balance.  There are also common restrictions on the age of the car and the car’s mileage.  Generally that means that if you have less than 70,000 miles and the car is less than 6 years old, you should have no problem getting an offer.  Plus, you may need to have a credit score say 525+ or so to qualify for a competitive refinance rate.

What are the dangers – While auto refinancing can help you save a lot of money in some situations, it may not always be a good decision. If you are thinking about refinancing, be sure to evaluate if it is really going to help you out because of payment reductions or APR % decreases.  Just don’t kid yourself before you really take a good look and make sure that it’s a smart thing to do.  By that I mean just be aware that a refinance loan may extend the term of your car loan in order to reduce your monthly payments. This could result in increased costs over the life of your loan.  So again, I’m just trying to make sure you are thinking this through so that it’s to your advantage, based upon your circumstances.  For most people, it’s a no brainer – if you can save some cash, just do it!

Refinancing allows borrowers more flexibility and freedom with their auto loans and with the cash that they save. People with expensive auto loans are no longer stuck with them for the life of the loan. Use them wisely and it’s clearly to your advantage! Find out today if an auto refinancing loan can help you save money and let us help you see just how easy it can be.  We would love to show you what we can do.

Refinancing your car loan is an ideal way to lower your overall interest cost or reduce your monthly payments.  If you get lucky, you can do both.  By using an online multi-lender auto loan finance company, you can be assured that you are finding the lowest rate.  To be sure you are getting the best offer; follow these three tips before you refinance your vehicle.

1. Know Your Goal

Before you refinance your auto loan, decide what your goal is. Do you want a reduced interest payment or have a smaller monthly payment? With your goal in mind, you can choose terms that will best meet your needs. To find reduced interest payments, it is best to have improved your credit rating. One easy way to do this it to pay your credit cards down to 50% of their limit. You can also find lower interest rates by choosing a loan shorter than the typical five year period. Regardless of what you are looking for, it does not hurt your credit score to look and apply for an auto refinance loan.

Remember, smart people shop and the credit bureaus score it as only 1 inquiry, within a two week period.  To reduce your monthly payments, look for a loan for a longer period.  You don’t even have to find lower interest rates to lower your monthly payment. However, you will be paying more in interest payments over the course of your loan.  Just review your options and make a good choice for you, and know what you want to accomplish on the short term.

2. Go Online But be Prepared

To speed through the refinance process, gather all your financial information, for the auto you want to refinance, such as lender, monthly payments amounts, estimated payoff amount and current rate.  It’s not critical that you have the VIN number or exact APR’s or amounts, but if that info is handy, have it ready and with you as you apply.

If you don’t know the current balance on your loan, you can call your current lender to get the exact amount.  Having a copy of your last tax forms will also make filling out the forms for quotes or a loan application easy.

3. Compare Quotes – Get your Refinance Auto Loan

When you are ready to find an auto loan, compare quotes before you pick a lender. You can get quotes from online lenders from our site – all you need to do is apply.  What we do is match your application up with our lender base and electronically post lender approval information on our site.  It is secure and completely private so that you are the only one that can see the information.  Getting multiple offers is important to you so that you can have a choice and pick the offer that is best for you. Your Loan – Your Way.

Not a bad approach, right?  You don’t want to get locked into a deal that you can’t pay early.  While rates and terms are important to compare, you also be aware that there are no fees for applying or using us for your auto loan. Select the rate that works for you and take it from there.

After a small amount of paperwork, you can have your new lender pay off the old one and you are on your way to saving some money.  Good luck and let us know if you have questions.

If it’s high, Now is a Good Time to Borrow

In this crazy lending market, interest rates have remained at historic lows but all the banks have gotten so picky that most requests for loans go unanswered.  There is an old saying that goes, “If you don’t need the money, you can borrow all you want”.

Well, a year after the global freeze in the credit markets that caused massive government intervention (aka interference) interest rates continue to remain at historic lows.

That’s great for people with good credit.  If not, it seems like you could be wasting your time.  Credit has gotten to be so tight that if you are willing to be interrogated for several days, and can document your entire life story, (video and pictures help) along with signed letters from every institution that you have done business with, you might be considered for a loan.  And from all we can see, it’s going to be around for a while.

Bank and financial institutions are on the defensive posturing stage.  After many completely blew lending on the mortgage side, it has had a ripple effect in all other areas of lending from home purchase, to auto, to personal loans, and any other mode of credit issuance that was common in the past.  Not now.  No segment of borrowers has been spared. During the housing boom five years ago, 7 of 10 applications were approved.  Today is 5 in 10.  With credit card companies getting tighter with credit, consumer credit carddebt declined by $6.1 billion in July.

For perspective, big banks are not risk averse.  That’s common sense, right?  Rather, their reluctance to lend has to reflect the fact that they must conserve cash to absorb billions in losses that are still expected to occur from bad loans that were made before our financial meltdown last September of 08. FDIC-insured banks lost a total of $3.7 billion in the second quarter, dragged down by growing number of bad loans.  They set aside nearly $67 billion in the second quarter in anticipation of future losses from all those wonderful decisions that they made for years leading up to the crash.

Oh, there are a lot of other reasons, such as the lack of ability to pool loans into securities, (ABS = auto back securities) for sale to investors, or securitization. Lehman brothers collapse pretty much dried up this market outlet but there are signs of opportunity that crop up from time to time.  With consumers ratcheting back their borrowing and banks getting tougher with their lending criteria, rates will remain low for those who have good credit.  If you can stand the pain, you will benefit from the gain.

What has been your experience?  We would love to hear what you are seeing from your point of view.

Here’s to getting this economy back on track.

I’m really not trying to be judgmental but as they say, you do the math.  Let me summarize.

Point 1
A vehicle getting 15 mpg and averages 12,000 miles per year uses 800 gallons a year of gasoline.  A vehicle getting 25 mpg and averages 12,000 miles per year uses 480 gallons a year.  So, the average Clunker transaction will reduce US gasoline consumption by 320 gallons per year

Point 2
Cash for Clunkers DOT officials reported 690,000 vehicles sold during the program – so that’s 220.8 million gallons per year.

That equates to saving close to 5 million barrels of oil per year. I repeat—per YEAR.  5 million barrels of oil is about ¼ (25%) of one day’s US consumption.  And, 5 million barrels of oil costs about $350 million dollars at $70/bbl.

Point 3
Our Government “gave” each Clunker Trader approximately $4,500 per car for 690,000 transactions which cost US Taxpayers $2,877,000,000–not including Washington’s astounding Administrative costs.

President Obama said in his speech to auto workers in Ohio recently, “One of the other efforts we undertook was the Cash for Clunkers program. Folks said that wouldn’t work either. That program was good for automakers, it was good for consumers, and, by the way, it was good for our environment.”   What I did not read in that speech was that it was good for taxpayers, and here’s why.

We all invested and paid (through our taxes) more than $3 billion+ $150,000,000 to administer, to save $350 million.

And the return on investment is….Priceless

Getting a new car loan? Now is the time to also check on insurance rates for your new car. Get a very competitive quote for car insurance available, as you do your research for auto financing, at BestCarInsurance.com.

myAutoloan.com’s used car loan rate for cars purchased at a franchise dealer is currently being advertised at 6.74 percent for car loans up to 36 months and the auto loan rate is 6.94 percent for loans between 37 months and 60 months.

Used car loans for purchasing an auto from a private party loan is a lot higher than purchasing from a franchised dealer. The current rate of loans up to 36 months is 7.19 percent and 7.79 percent for auto loans between 37 months and 60 months.

Rates for doing an auto refinance are at 4.75 percent for auto loans up to 36 months and 5.64 percent for car loans between 37 months and 60 months.  Leased buyout loans, buying your leased auto and financing the purchase, are at 8.08 percent for car loans up to 36 months and 8.45 percent for car loans between 37 months and 60 months.

See all the rates available by going to myAutoloan.com’s home page – rate chart is there.

In the second quarter, 0.80 percent of car loans were 60 to 89 days past due, up from 0.66 percent during the same period in 2008.  Thirty-day delinquencies rose 14.6 percent in the second quarter to 3.06 percent, up from 2.67 percent the previous year.   Combined, 30- and 60-day delinquencies amount to $25.5 billion in loans at risk. 

Why is this significant?  That’s because it prompts lenders to tighten their lending criteria.  The result is that it pushes many consumers out of the market altogether.  Sure some buy used but many just drop the purchase to wait out the strict requirements being applied.
 
Michigan was among only three states to show a reduction in 30-day delinquencies, according to the study’s findings. The other two were Alaska and Nebraska.
 
At some point the lending markets has to turn so that pent-up demand eases.  However, for right now, it’s a tough market and consumers are not getting much of a break on the cost of financing, that is unless you’ve got a high credit score.  In the meantime, we all wait. 

For the balance of the year SAAR (Seasonally Adjusted Annual Rate) figures will probably close the year out at just under 10 million per month annualized.  Next year by February, we should see things starting to break free.  Let’s hope that prediction holds!

So what are some of the discrepancies? Edmunds pointed out what it sees as inconsistencies with the government’s Clunkers statistics. One of the reasons the company delved into these figures is because it says there was an unprecedented wide range in analysts’ sales forecasts, with analysts’ forecasts for the month annualized sales rate at an unprecedented 4 million range. Stands to reason that someone would want to true up the numbers, right?

One of the “mysteries,” as the company calls it, is that the government release said the program took 690,114 clunkers off the road. However, apparently Edmund’s experts tracking the program found that clunker trade-ins never accounted for more than 33.4% of weekly sales. “It is mathematically impossible for there to have been nearly 700,000 new-car sales during the course of the program, given the actual sales numbers announced by automakers who should have no motive to under-report,” said Zhenwei Zhou, Edmunds.com senior statistician.

But now that the numbers are in some of the numbers do not add up.  Apparently, one of the difficulties in forecasting the sales number was due to the midstream change in the Clunkes program, or the fact that the program’s administrators changed the rules allowing dealers to take clunker trades on vehicles that were in transit or on order. “As a result, we’re still seeing clunker deals trickle in and are yet to be counted as sales,” noted David Tompkins, Edmunds.com senior analyst. “We expect that to continue for a few weeks. We expect about 50,000 vehicles will be delivered and counted as clunker sales in September’s sales reports.”

Michelle Krebs, Edmond’s senior analyst noted that the Department of Transportation reported on Aug. 26 that it had received 690,114 Cash for Clunker voucher applications for either $3,500 or $4,500.  As of Sept. 2, she said DOT had not changed that figure.  However, the governments own data doesn’t add up. In its Aug. 26 press release giving the supposed final tally for the program, the DOT gives the total application voucher as well as a breakout of the number of vehicles purchased by category and the number of vehicles traded in by category.

None of these numbers are the same. The overall application number of 690,114 is different from the number of clunkers the government said were turned in under the program — 685,201 — which, in turn, is different form the number of vehicles purchased — 684,941. While the differences are not huge or enough to impact forecasting, they should match. Presumably, the number of clunkers turned in and the number of vehicles purchased should be identical, which should add up to the number of applications.

So why does the clunkers number matter? From an economic standpoint, how many of the clunker trades resulted in sales that wouldn’t have occurred otherwise? Or did it merely pull from behind and pull from future naturally occurring sales. If it did produce incrementally higher sales, what was the cost per vehicle to shareholders? Even more important, sorting Cash for Clunkers data is important for forecasting going forward. Analysts, including those at Edmunds.com, auto companies and other forecasting firms, are trying to determine, what is the true underlying demand for vehicles by retail customers, excluding the clunkers program, and what is the trajectory of vehicles going forward.

What do you think are the government’s data  Credible or not?  How can you believe in anything we are being told?  Too many questions and not any answers.  Tell us what you think.

“American consumers and workers were the clear winners thanks to Cash for Clunkers program,” said Ray LaHood, U.S. transportation secretary. “Manufacturing plants have added shifts and recalled workers. Moribund (or bare) showrooms were brought back to life and consumers bought fuel-efficient cars that will save them money and improve the environment.”

Overall, rebate applications worth $2.877 billion were submitted by the Tuesday deadline. This covered 690,114 applications.
 
Top 10 Most Purchased Autos
Of the top 10 most purchased vehicles under the Cash for Clunkers program, only five automakers made the cut. This includes Toyota, Honda, Ford, Hyundai and Nissan. Toyota and Honda each had three models make the most purchased list, while Ford was close behind with two. Nissan and Hyundai meanwhile each had one model making the most popular Cash for Clunkers purchases.

Top Most Traded In Autos
The Ford Explorer 4WD and the Ford F-150 Pickup 2WD were the significant leaders in what was traded in.  Of the vehicles traded-in, 84 percent were trucks with 59 percent of customers purchasing passenger cars. The average trade-in mileage was 15.8 mpg, which leads to an overall increase of 9.2 mpg, or 58 percent climb, as the average new vehicle purchased receives 24.9 mpg.
 
Offering preliminary insight into the impact of the Clunkers program will have on the economy, the White House Council of Economic Advisers predicted the program will ramp up economic growth in the third quarter by about 0.3 to 0.4 percent at an annual rate due to the sales. The gross domestic product will be sustained thanks to increased vehicle production and to fulfill inventory requirements, the group indicated. Furthermore, an excepted 42,000 jobs will be created or saved.

New-Vehicle Manufacturer Percentages:
Toyota: 19.4 percent
General Motors: 17.6 percent
Ford: 14.4 percent
Honda: 13 percent
Nissan: 8.7 percent
Hyundai: 7.2 percent
Chrysler: 6.6 percent

There is, as we’ve mentioned many times, a large gap in opinions of just how successful the program was.  However, what it did do is create an artificial spike in consumer spending.  If you think about it, the conclusion that was most promoted by the non-objective major newscasters who thought of this as a good idea, was to proclaim its success. 

With the direct lending markets still in mourning from the failed practices of many banks mortgage fiasco, a huge market still exists for auto loans and refinancing for everyone who does not have a 720+ FICO score.  In the meantime, and still a “nightmare” is the fact that dealerships are still waiting for their money, and most have stopped junking the trade-ins in fear of Uncle Sam failing to reimburse them under the program.  Time will tell.  What do you think?  Good or bad, let us know.

It sill looks like consumers benefited, and the Government benefited by the “look what we’ve done to spark the economy” sound bits spewed all over the media, and finally, the dealerships got rid of a lot of autos sitting on their lots.

The problem is that they seem to be the ones floating the Federal Government, while they try to figure out how to make the payment processing work. That’s funny! From what I’m seeing, most dealerships are going on a wish and a prayer about getting paid.

I’m talking some major cash per dealership that is hung up in government regulations of 150 pages and some 14 different forms that need to be completed. Does that sound like efficiency to you? I think it’s totally blind faith at this point that the dealerships are going to get the money that is owed to them. Citi call centers have been awarded outsourced work, and the National Transportation and Highway and FAA employees have been brought in to process paperwork, in addition to part-time employees having been hired.

It kinda sounds like a cluster — I mean ‘Clunker’ to me. They are all working on trying to input stuff and they can’t get in because there is soooo much of it and the documentation to process just one sale with a qualified rebate takes hours to complete. The computers are overwhelmed. It’s a great program for the manufacturers, a great program for the consumers. For dealers, it’s been an administrative nightmare.

Think about this for a minute – The Obama administration and its allies in Congress propose to overhaul (and potentially run) health care for more than 300 million Americans?

I think we can say cash-for-clunkers doesn’t inspire much confidence in Washington’s bureaucratic acumen. Or its speed! Or its feel for a functioning market, the demands and expectations – - OK I’ll stop.

Will the dealers get paid? Yes, because failure to do so would be a PR disaster of epic proportions for the democrats and the administration. Will the program prove to be the jumpstart languishing auto sales need? Debatable, but probably not, though depleted inventories already are forcing increased production schedules across the industry. Those announcements were made about a week ago.

The more important question, it seems to me, is what the obvious administrative failures of cash for clunkers say about the federal government’s capability to manage programs more typically run by the private sector. And, secondly, why is there a clamor for more of the same? What is it about this poorly run program that the American people or even congress wants more of? Tell me, what am I missing? Why did the public not see or hear about the issues in the media? Clearly journalism has seen better days and major networks appear to be agencies for the Obama administration.

Sad day for the USA.

Auto dealers are in business to make money selling cars and trucks, not to serve as conduits for federal transfer payments. If nothing else, cash for clunkers proved Americans still love good deals — and that their government cannot process them.

It is interesting that no media analysis has ever told the tale of the “unintended consequences” of the destruction of more than a quarter million used cars, especially older models that would have gone to charity or been sold on the private party market.   It’s an obvious benefit to the new dealers, that’s for sure.  This creates the supply shortage, especially for lower prices cars resulting in the remaining cars left on dealer lots to increase the sales price.  Since demand has remained strong, at least for the first few days and possibly weeks, it would have forced the average prices to increase because the least expensive cars and trucks were being removed from the overall inventory available.

Owners of vehicles that didn’t qualify for the clunker program reverted to their original intent and sold the cars and trucks private party, according to Art Spinella, president of CNW Research.   Specifically, private used-vehicle sales are expected to total 1.214 million in August, a 1.5-percent improvement from a year ago. Meanwhile, franchised dealers are expected to move 1.417 million used units, a 0.5-percent decline, and independents are likely to sell 1.246 million used cars, a 0.4-percent upswing.

Cash for Clunkers affected the new side of the market. According to his analysis, at the mid-point of July, new-vehicle sales were on pace to have a 22.2-percent year-over-year decline.  However, the heavy promotion and coverage of CARS helped to lift new-vehicle sales to 997,572 units for the month, which was down less than 13 percent from July 2008.   The “bounce” in floor traffic at the end of July continued through the first two weeks of August, and this helped multiple areas of the industry, according to Spinella.  First, it drew more ‘lookers’ who weren’t even planning to buy a car or truck. It’s been more than two years since analysts have seen any appreciable increase share of floor traffic consisting of long-term shoppers (those who don’t expect to buy a vehicle for at least a year,) and second, it exposed Cash for Clunker buyers and general consumers to other models, which had a positive overall effect in sales.  There were many benefits for dealerships’ F&I, parts and service operations, as well as for salespeople in general.  I suppose all those who got a subsidy are pleased.

So now what?  Frankly, as it has been observed by others, that dealers have been taking early sales from 2010 expected revenues.  This has driven up prices, while the big 3 have increased production.  What should we expect next?  In my opinion, expect a spiraling drop in sales through the balance of the year, picking up some first quarter 2010.  Shoppers will clearly delay purchases until more signs of a stable economy are seen and their jobs are not threatened.  At some point the auto loan marketplace is going to rebound.  I am looking forward to lenders getting back into the game and providing some service again.

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Why are TV and media so blind and non-objective anymore?  That’s probably because so many reporters fail to heed the journalistic rules that have been a foundation of our press, and that is to note the unseen as well as the seen—to consider all the effects of a policy on society as a whole, not just the immediately obvious benefits for a select group. I’ve not really seen anything published or on TV that has put any type of high level of questioning of the program before us and tried to explain what the unseen consequences of the ‘Clunkers’ program might be.  That’s why I ask if anyone is paying attention.

The first benefit of this revised clunkers program, which was approved last night by the senate and is off to the President today, is to increase the sales price of the car.  What this $3 billion subsidy is doing is boosting sales prices and lowering trade-in payments.  It’s not as if dealers simply charge $4,500 less than they would have and pass the entire subsidy onto the buyer — dealers still charge as much as they can for a new car and pay as little for a trade-in as their customers will allow. The subsidy is split between dealers and customers.  No one has ever come out and said that.

And who are the customers? Not poor people, or the needy — they don’t shell out five figures for new cars. No, this is a middle-class to upper-middle-class subsidy, which is probably why politicians love it so much.  I continue to hear that the average FICO score of the buyers within the ‘Clunkers’ program has a 720 score.  That’s clearly not the poor but I doubt if that kind of information ever comes available to the public or gets reported.

The real benefit to business — and harm to the economy — comes after the car sale is concluded. The law requires the dealers destroy the “clunker” engine (which, to be eligible, was drivable upon trade-in), scrap the car and shred almost all its parts. This government-required waste reduces the supply of used cars on the road.  All those poor and needy, who would have benefited from having access to these autos, will be completely denied.  Reduce the supply of drivable used cars, and you drive up the price of all cars.

This supply reduction is the real stimulus for automakers and new-car dealers, and it comes at the expense of every consumer who didn’t take advantage of Cash for Clunkers — especially those who can’t afford a new car. This $3B program taxes used-car buyers to subsidize new-car buyers.  Have we all just gone nuts in the country?  So tell me, how’s that “cash for clunkers” program working out for you?

 I’d love to hear your comments.

The study examined five key factors to contribute to satisfaction within the prime retail credit, subprime retail credit and retail leasing segments: provider offerings, credit personnel, application/approval process, termination policy/service and sales representative relationship. Three factors were measured in the floor-planning segment: provider offering; floor-plan support personnel and process/service.

The study was based on responses from more than 2,000 dealer principals who were surveyed between April and May of this year.  

On a 1,000-point scale J.D. Power found:

Prime Retail Credit (down 46 points)
2008: 835
2009: 789

Subprime Retail Credit (down 76 points)
2008: 793
2009: 717

Retail Leasing  (down 79 points)

Floor Planning  (down 90 points)

The retail financing experience account for more than two-thirds of dealer satisfaction. Meanwhile, offerings such as rates account for less than one-third of overall satisfaction.  While recognizing that the past year has been tough for dealers, J.D. Power executives advised, “This indicates an opportunity for lenders to differentiate themselves through service, even though external market forces are driving a more conservative lending approach.”   I just love the “more conservative lending approach,” don’t you?

David Lo, director of financial services as J.D. Power, explained it this way, “Current economic conditions have created something of a ‘perfect storm’ as declines in new-vehicle sales, tightened lending and reduced inventory funds have combined to put extreme stress on dealer business.”

“However, the fundamental principles of service are unchanged. Lenders that focus on prompt application and funding turnaround times, have credit buyers that demonstrate willingness to worth with their clients and have sales representatives who are skilled in relationship management may position themselves to be a lender of choice,” he continued.   This is actually pretty significant.  One of these days lenders will clamor around the dealerships, if not the buying consumers, and be happy to lend money again.  LOL, that sure sounds so funny to me.

This is interesting as well; Basically, the study discovered that higher levels of satisfaction may positively impact the amount of a business a lender receives from a dealer.  For instance, for the lenders in the prime retail segment whose satisfaction scores averaged 712 on a 1,000-point scale, 22 percent of dealers say they “definitely will” increase their business with this organization.

However, of the lenders whose satisfaction scores averaged 886, 46 percent of dealers said they “definitely will” increase business with that lender.  Lo noted, “High-performing lenders tend to close a higher proportion of deals. This is critical right now, and almost more importantly, may serve as a foundation for growth one the market stabilizes.”

Prime Retail Credit

Taking the top spot in the prime retail credit segment was Mercedes-Benz Financial with an index score of 918. Officials said this company performed particularly well in two areas, provider offerings and credit personnel.  The prime retail credit company averages of a few sample lenders are as follows:

Mercedes-Benz Financial: 918
BMW Financial Services: 898
Toyota Financial Services: 873
Audi Financial Services: 838
Honda Financial Services: 831
Wachovia Dealer Services: 814
Ford Credit: 802
Bank of America: 787
Chase Auto Finance: 772
US Bank: 744
Capital One Auto Finance: 732
GMAC: 711
Chrysler Financial: 665

Subprime Retail Credit

Interestingly enough, J.D. Power said that no awards were presented in the subprime retail credit segment due to insufficient market representation.  

The rest of the detail is not that interesting so I won’t go into it.  I don’t know about you but let’s hope that this ‘Perfect Storm’ ends soon.  I’d like to see the supply of financing start to meet the demand of the applicants.  No doubt it will take time but I speak for myself when I say I’m getting a little impatient!

The Transportation Department is preparing to suspend its $1 billion “Cash for Clunkers” program by the end of Friday, after it had all but run out of money, but said it would still honor the vouchers until midnight.  What’s going to happen now is that Congress will be approving another $1 billion dollars for the program so that they can leave for vacation and talk about how successful the ‘Clunkers’ program is. 

My math may not be the best but at a 10,000,000 sales rate for the year, with 6 sales days per week, that is about 32,000+ cars/day sold in the US. The CARS program will support a maximum of 285,000+ cars if everyone only gets $3500, and 222,000+ if everyone gets $4500 (The actual number lies somewhere in between). At around 32,000+ cars/day, that translates into 7-9 days of sales if every car purchased qualified for CARS. If only half qualified, then that would be 14-18 days.

It sure looks to me like someone didn’t bother to check their math to see how much of a difference this would make, or how long it would likely take to burn through the money.

The surprise revelation came FOUR DAYS after the program started and prompted an urgent series of meetings on Capitol Hill and at the Transportation Department to figure out if and how it would replenish the funding.

Transportation Secretary Ray LaHood made a round of calls to members of Congress notifying them that the program was out of money, talking to Sen. Carl Levin, D-Detroit, among others. He was making a push to try to find funding to keep the program alive.

It’s not clear what will happen if dealers submit more requests for vouchers beyond the $950 million in the program but I’m hearing that all the vouchers will be honored if submitted by midnight today. The remaining $50 million is set aside to cover administrative costs.  You know, for another $50 million plus $950 million more, we can do it all over again.

The White House said late Thursday it was considering its options.  I just can’t imagine what those would be, can you?

“This is simply the most stimulative $1 billion the federal government has spent during the entire economic downturn,” said U.S. Rep. Candice Miller, R-Harrison Township. “The federal government must come up with more money, immediately, to keep this program going.But action must be taken fast, as the House was set to adjourn today for its August recess and not return until after Labor Day.  I’m still betting that they will approve more money before they leave for vacation to listen to their constituency.

In an article posted by Michelle Krebs of Edmonds, she noted that dealers think the CARS.gov gauge is in reality on empty. Dealers and dealer organizations have expressed their concern to government officials as the program began, 4 days ago, that they had far more transactions in the works for consumers to trade their clunkers for more fuel-efficient vehicles than the program had in funds. Dealers have always feared they would be left holding the bag for the vouchers of up to $4,500 if the government funds ran out.

On Wednesday night, sources said the National Automobile Dealers Association surveyed its dealers to gauge how many Cash for Clunker transactions they had in the works. The average number of working deals for the 1,900 dealers who responded amounted to nearly 14 transactions, with more deals qualifying for the top $4,500 voucher than the $3,500 voucher.

The program offered consumers up to a $4,500 voucher for turning in vehicles that in the case of passenger cars got no more than a combined city/highway 18 miles per gallon. To qualify for the full $4,500 the new vehicle purchased must have a 10 mpg improvement. To get a $3,500 voucher, it needed a 4-mpg to 9-mpg boost. The program is limited to vehicles no more than 25 years old, which the owner must have owned and insured for the previous year.

Well Time will tell – what will congress do?  What pressure will the White House put on Congress?  Will the American People support it or blow it off? I’m still saying they will approve another Billion or two dollars of your tax money to keep it alive.  Stay tuned ………

The government of the United States is offering $3,500 and $4,500 vouchers for vehicles traded in toward the purchase of a new car.
Here is a quick overview of the Cash for Clunkers program.
1) Visit the www.CARS.gov for current information about the program.
2) Determine if you qualify for the program and locate a dealer.
3) When you purchase or lease a new vehicle the dealer handles the submission to the NHTSA.
4) NHTSA ensures that your purchase meets all of the requirements.
5) About 10 days later the NHTSA credits the dealer if all requirements were met.

There are several restrictions to the program and it doesn’t last forever.
• New car purchases only (no used vehicles allowed)
• Car must be purchased between July 1, 2009 and November 1, 2009
• No cars older than 25 years
• You must be able to drive your car to the dealership for trade in
For a complete list of restrictions visit www.cashforclunkerfacts.com

Don’t wait. This is a first come first serve program. The funds to the program are limited and it will end before November 1, 2009 once the funds are gone.

Apply at myAutoloan.com to finance your new car purchase.

“The lower receivables primarily reflected lower North America and Europe receivables, mainly due to lower industry volumes, lower dealer stocks and the transition of Jaguar, Land Rover and Mazda financing to other finance providers,” officials indicated. On June 30, the company had a managed leverage of 8.4 to 1. Also, executives said that during the second quarter, Ford Credit completed a cash tender offer, purchasing $3.4 billion principal amount of its unsecured, nonconvertible debt securities for an aggregate cost of $1.1 billion, including transaction costs.

Second, Ford Motor Co.’s unexpected $2.3 billion second-quarter profit could signal the end of the worst downturn in recent automotive history for at least one of Detroit’s automakers, but Ford’s recovery still depends on the broader economy.  Though Ford’s profit was due largely to one-time gains, consistent improvements in its underlying financials are sparking optimism among investors, analysts and union leaders that has not been seen for some time.  It was nice to see that Ford shares gained 60 cents Thursday on the results, closing up 9.4 percent at $6.98. 

According to the Detroit News, the company also said it has reached a new agreement with the United Auto Workers that will allow Ford to cover billions in retiree health care obligations with company stock priced at current market values — previously, the UAW said the shares had to be valued no lower than about $2.  That’s a vote of confidence in Ford’s future, said Sean McAlinden, chief economist at the Center for Automotive Research.  “This is a stock that, when this economy recovers, is going to $20,” he said. “I’d say we’ve got a hot auto company here in Michigan again.”

The numbers offered a sharp contrast to the staggering $8.7 billion loss Ford posted in the same quarter a year ago. Excluding one-time items, Ford still surprised analysts with a loss from continuing operations of $424 million, about half what Wall Street expected and a $609 million improvement over 2008.
Talk about good news for the automaker. Ford cut its cash burn rate by more than two-thirds, from $3.7 billion in the first quarter to $1 billion. It also saw the amount it makes on each product increase in key markets such the United States, and gained 2 percentage points in U.S. market share over the same period last year despite lower incentives.  It’s just great to see that the only auto company that did NOT take the government bailout and the only auto company that is not being run by the government, is showing signs that capitalism is not dead.

“Those are real proof points that the plan is working,” CEO Alan Mulally told The Detroit News. “We’re moving into a different phase now. We’re starting to grow.”  He attributed the gains to aggressive cost-cutting, new products and better use of the company’s global assets.  “Mulally has recognized what was right at Ford and leveraged it, putting Ford in a strong position relative to its competition,” said analyst John Murphy of Merrill Lynch. “A good second quarter, and liquidity appears solid.”

If Ford’s stock remains high, some analysts expect the company to pursue another debt-for-equity swap. In May, Ford issued 345 million new shares of common stock, raising $1.6 billion, and helping it trim $10.1 billion in debt from its balance sheet since the beginning of the year.  Ford ended the second quarter with $21 billion in available cash, but still needs to improve its balance sheet to address lingering concerns that GM’s bankruptcy put the Detroit automaker on a stronger financial footing.

Again, it’s good to see Ford prosper and we can all hope that the success continues for the Non-Government owned automaker.  The free market is alive and well!

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The new Government owned GM emerged from the remains of bankrupt General Motors Corp. last Friday, aiming for 18.5 percent of U.S. auto sales with four car lines, down from eight.  According to Autodata Corp, the four surviving brands, Chevrolet, Cadillac, Buick and GMC, accounted for 16.5 percent of the market in June, and Ford’s share was 17.2 percent, excluding Volvo, which it is selling.
 
An industry analyst with IHS Global Insight of Lexington, Massachusetts, John Wolkonowicz said that surpassing GM would validate Ford’s strategy to go it alone and spurn government aid. While GM and Chrysler LLC seek to change themselves through bankruptcy, Ford benefits from its status as the only independent major U.S. automaker as it builds momentum.

Well, it sure looks like Ford is on a hot streak right now but will it last so that Ford overtakes GM?  It’s going to mean that our Government owned GM must keep some customer loyalty with Pontiac customers, which it is discontinuing to create the “NEW” GM.  That is clearly going to be a major challenge.  A lot of Pontiac buyers, young, blue-collar women, really do not like the rest of the GM lineup and they are certainly not going to buy a Buick anytime soon.

As the story goes, GM first overtook Ford in 1927 as Henry Ford halted production to switch from building the Model T to the Model A. Ford recaptured the lead in 1929-30. GM pulled ahead in 1931 and never looked back, until now.  Why did they over take Ford? No ‘Natural Reason’.  As for DM, defending its 78-year-old U.S. sales supremacy will be challenging, even after Volvo is sold.  They will have four brand and Ford will have three and thus, there will be a parsing out of who the winner will be between the two. 

It’s interesting that Ford has already overtaken Toyota Motor Corp. in U.S. sales by selling 773,242 cars and trucks while the Japanese automaker sold 770,449 vehicles in the six months through June, according to Woodcliff Lake, New Jersey-based Autodata, a research firm that compiles automotive sales data. Toyota has outsold Ford in the U.S. the past two years. Ford continues to trail Toyota this year by 26,953 vehicles when Volvo is excluded.  GM’s four surviving brands sold 804,371 cars and trucks in the first half of this year, according to Autodata, down 38 percent from the same period in 2008. Ford’s U.S. sales, excluding Volvo, are off 33 percent.

What, if anything, did GM learn from discontinuing Oldsmobile?  GM failed with customer loyalty when they dropped Oldsmobile and did not hold on to many Oldsmobile buyers after it killed that brand in 2004. So now it’s all going to be about sophisticated electronic marketing techniques to target Pontiac owners and GM is expanding its other model lineups to offer alternatives.

Ford gained U.S. market share among individual car buyers in seven of the past eight months, according to George Pipas, the automaker’s sales analyst. The Michigan-based automaker’s 17.2 percent U.S. market share in June excluding Volvo was up from 14 percent in the same month last year.  Basically, the key benefit of Ford Not Taking Aid, (that is avoiding bankruptcy and staying off federal aid,) is helping Ford win new customers. 

GM, which had filed for Chapter 11 on June 1, is receiving about $65 billion in federal aid. Chrysler, which filed for bankruptcy April 30, has taken $12 billion in U.S. assistance.  Ford won almost three times as much support as  the Government owned GM and more than six times as much as Chrysler among U.S. consumers asked about their preferences for a new auto, according to researcher AutoPacific Inc. of Tustin, California.

In an online survey of 900 people in June, 43 percent said they were likely to buy or lease a Ford, compared with 15 percent for GM and 7 percent for Chrysler. Ford matched Toyota’s score and beat Honda Motor Co.’s.  Ford will gain more market share on its domestic rivals when it launches two small cars next year. The automaker is estimating that it will sell 310,000 Fiesta subcompacts and redesigned Focus compacts annually by 2012, Global Insight estimates.
 
It’s certainly going to be an interesting battle and with free enterprise going against Government and Union owned GM, Ford should be a clear winner when it’s all said and done.  One thing that continues to confuse me is with the billions of dollars going into this restructure and government ownership, how will it succeed if the financial markets do not loosen up credit and let car buyers purchase transportation with auto loans?  Hey Mr. President, how about kicking some of these “cautious” banks into helping out the American people!  What do you think?

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Dealers have been pushing bills in Congress that would undo any changes made by Chrysler or GM in their dealer agreements during their bankruptcies.  One version now has 221 sponsors in the House, more than the 218 it needs to pass, and dealers who back the proposal plan to push the issue with House and Senate members during a lobbying blitz Tuesday, with a House vote possible Wednesday.

“By a unanimous vote, a U.S. House committee has approved a measure that would restore 2,100 dealers either cut or scheduled to be closed by General Motors Corp. and Chrysler Group LLC.  The vote comes amid growing support in the House for the proposal, with more than 200 cosponsors signed on to a similar bill.  Dealers will hold a lobbying event next Tuesday to press for the plan in the House and Senate.  The bill would turn back the clock to before the companies filed for bankruptcy, restoring the 789 dealers cut by Chrysler and 1,300 dealers GM chose to wind down.”

Mark LaNeve, GM’s sales chief, and GM North America head Troy Clarke spent the day criss-crossing Capitol Hill, as did Chrysler Deputy CEO Jim Press.  “In terms of creating a viable, competitive GM on taxpayer dollars, you can’t look in the mirror and say we didn’t have to restructure the dealer body,” LaNeve said. “Everybody acknowledges, even dealers acknowledge, we had too many dealers.”

In addition to reversing the dealer cuts, the bills would throw out the changes GM negotiated with the 4,100 dealers it chose to keep. LaNeve said about half of those dealers had sent letters to lawmakers opposing the dealer bill.  Chrysler said in a statement that the House version of the dealer bill “would jeopardize the viability of the new company.”  The proposal by Michigan Rep. Gary Peters, which was still being circulated among lawmakers, suggested using money returned by banks under the $700-billion financial industry bailout.

I know it’s horrible that people are losing jobs at these dealers but I don’t understand this vote. First, GM/Chrysler are told to “become competitive” but then Congress tries to stop them from taking the steps they feel are necessary to be competitive.

It makes no sense to me, but how about you?  What needs to happen is that our government, who now controls the banking system and the major banks, had better start getting these Taxpayer Owned entities to loan money again.  Is this crazy or what?

Answers to frequently asked questions about refinancing an auto loan.
Q: What is an auto refinance loan?
An auto refinance is a loan that pays off your existing auto loan, similar to a mortgage refinance, but with a much simpler and faster process.  You don’t have all the paperwork, detail, downtime with specialists and appraisers so you can complete the process within days of submitting an application.

Q: How does it work?
It’s very simple. Your new lender pays off your old loan and the title to your vehicle is transferred to your new lender.  You now have a new loan and lender that you begin making payments to.

Q: Why should I refinance my existing auto loan?
Typically, consumers refinance to get a lower interest rate in order to reduce their interest costs, or to lower their monthly payments.  Auto refinance loan rates are at very low historical levels, so our customers are increasingly taking advantage of this by refinancing.  Chances are that your interest rate, even with great credit is higher than what is available today.  Make sure you know that higher interest rates are more expensive and will cost you more over the same time period.   You will be surprised at how simple and easy an auto refinance loan can be.

Q: When should I refinance my existing auto loan?
As with any personal finance decision, it really depends on your individual goals and what you want to accomplish.  It’s different for everyone but the objectives are pretty much the same.  If your goal is to reduce the amount you are paying in interest, you may want to consider an auto refinance loan with the same or reduced term as your existing loan. If your goal is a smaller payment, you may want to consider extending the term remaining on your existing loan, although this may increase the total interest paid over the life of your loans it will give you a cushion in which to work on the short term.

Q: Are there any fees associated with an auto refinance loan?
Typically, the only fees associated with an auto refinance loan are fairly standard transfer of lien holder fees which are usually $4 to $9 and, in some cases, a state re-registration fee of $10 to $70. These estimated fees may vary by lender, state of residence, etc. Be sure to check if your existing lender has any pre-payment fees.  Most do not but it does not hurt to check before hand. This could factor in to your decision to refinance.

Q: How much will I save by refinancing my existing auto loan?
How much you save depends on things such as the remaining balance of your existing loan, the difference between your old interest rate and the new interest rate, the term of your new loan, etc.

Q: Are auto refinance loans growing in popularity?
Yes.  We’ve seen a substantial increase in applications here at myAutoloan.com and the trend continues into this quarter.  Since auto loan interest rates have been at historically low levels, an increasing number of consumers are choosing to refinance their existing auto loans.

Q: What do I need to do to apply for an auto refinance loan through myAutoloan.com?
Simply complete an auto refinance loan request. You’ll typically receive a response within hours, and if approved, you may receive up to four offers from competing lenders. If you’re approved and you accept one of the offers, the lender will take care of the auto refinance process for you.

There you have it – short, sweet and to the point. Hope this helps in your planning and best of luck to all as we push the economy forward.

Like sad, lost souls, they trawl the Internet and the trade magazines, desperately hoping for a glimpse of the very latest models.   They do genuinely want to buy a car, but they can never quite stick to the process involved in buying one.
  
So instead of wandering down to the dealership and picking out a car, they would much rather wait until the next cycle of vehicles comes out, with all of the extras that the newest models have, the new lights, those little things that tell the driver whatever, all of the advancements from the basic model.
  
However, when the newest model comes out, they fold.   They just can’t resist waiting a little longer for the next model, then the next update.   And the end result of all of this?  They never update their car.  They are never satisfied.

We at myAutoloan.com suggest that these people seek serious help.  Cars are wonderful things, whatever their model number and waiting for the supercharged version is pointless and soul-destroying.
  
This is a serious problem and we sure hope they get over it.   The best way to deal with it is buy a car if you need one. Update your old car, get it financed by a direct lender and enjoy life.   Even better, just buy a car that you like, drive it and trade it if you have to but it’s time to update and improve your mode of transportation.   There will always be something better out there, so there is absolutely no point in waiting, and waiting, and waiting… let’s get this ecomony moving again!

“As we have discussed before, there are a lot of auto buyers that pay more than they have to pay because they need a car,” says Heather Dietel, Director of Business Development at myAutoloan.com, a licensed auto loan refinancing lender. “If they just had to have transportation and purchased a car with higher rates at the time, they will absolutely be surprised at how much they can save.”  There are a lot of good reasons to consider doing an auto refinance loan so let’s highlight a few of them.

Benefits of Auto Loan Refinancing
The most obvious benefit of refinancing your car loan is to save money on the interest you’re paying. You can also shorten the terms of your loan or reduce your monthly payments. One great benefit of refinancing is to improve your credit.  “When you refinance, it will show up as a car loan that was paid-off in full and on time on your credit report,” Dietel explains. “The new lender pays off your current loan and even though you’re taking out a new loan with the new lender, it will help your credit score.”  Remember to keep your auto refinance loan applications to a one to two-week time period so it won’t negatively affect your credit score.

Whether refinancing will lower your current car loan rate by 10% or 1%, you will still save money, Heather says. On average, consumers can save $60 a month on their car payments and get a 3.8% rate reduction, she says.  “Even if you only get your interest rate dropped 1%, you’ll still lower your monthly auto payment and save hundreds of dollars over the course of your auto loan,” she says. “With that, you can either pay off your loan faster, or invest that money in getting rid of other debt. Remember, the way to get the lowest interest rate and save the most money is to make the auto refinance loan term equal to or shorter than the old loan.”
 
Examples of how much you can save by refinancing:
 
Loan amount:           $30,000
                                 Original loan                      New loan
term:                        60 months                        60 months
interest rate:             12.5%                              7.5%
payment:                  $675                                 $601

monthly savings:  $      74
total savings:         $4,429
 
Loan amount:           $20,000
                                 Original loan                      New loan
term:                        60 months                        54 months
interest rate:             12.5%                              7.5%
payment:                  $450                                $436

monthly savings:       $14
total savings:        $3,434
6 month shorter loan
 
Overall, at whatever level your credit score is at and whatever interest rate you are currently paying on your car loan, refinancing can save you anywhere from several hundred to several thousand dollars over the life of the loan. Check online and your local credit union or bank to see what they offer and to see if you qualify to refinance.

Financial experts tell consumers to check all areas of their monthly budget to see where they can cut, like insurance, groceries, cable bills and phone bills. Your car loan payment is an expense that you can easily reduce by refinancing.

We’ve been discussing this topic with Heather Dietel, Director of Business Development at myAutoloan.com, a licensed auto loan refinancing lender.  She has indicated that if you are paying more than what you think you should, it a pretty easy task to inquire and find out if you can save money.  So where do we begin?

When and How to Refinance
Consumers can refinance their car loan after three on-time payments, Dietel explains. Three to six on-time monthly payments is usually the minimum and there’s no point at which it’s too late to refinance. The more on-time payments you have, the more chance you have to increase your credit score. But you don’t want to wait too long since you want to start paying a lower interest rate as soon as possible.

So how do consumers start the process of refinancing? Usually, the easiest way is to go online and fill out an application with a lender that does auto loan refinancing Dietel says.  “It’s so easy to do it online, it’s not worth the time to try and get your current lender to match any lower rates you’re offered,” she says. “Plus, you’ll get responses within minutes. This can help you make a good decision. It’s almost always a different lender that will refinance you. Not everyone who applies is approved though. You can get rejected by making a late car payment and not taking care of your credit.”

If you still don’t have a prime credit score, you may look like too much risk to the lender who is considering refinancing your car loan. Dietel says to try your local credit union if you were denied online.  “Generally, the new lender refinances your current auto loan for the amount left in the current term,” Dietel says. “For example, if you have 42 months left in your current term, they will refinance you at 42 months at a lower interest rate so you will pay less for the same vehicle in the same amount of time. However, your term is flexible and may be shortened or lengthened to accommodate your particular refinance needs.”

Once you apply online and get approved, a loan agreement will be mailed overnight or will be available online, Heather explains. Then you sign and return the paperwork to the lender. A check for the remaining balance of your old auto loan is sent to your current lender and the loan is paid in full to your former lien holder. Then your vehicle’s title is transferred to the new lien holder and you start making payments to your new lender.  “As with anything related to the Internet and money, you need to be careful about which sites you approach to apply for a refinancing loan,” Dietel says.

Information to have ready when applying for a refinance car loan:
• VIN number
• current mileage
• current lien holder
• current loan information – requested amount to be refinanced, monthly payment, date of first payment
• vehicle make, model and style

Our last entry is going to cover additional areas of an auto refinance loan and detail some of the benefits associated with taking the time to investigate.  See you then.