Category Archives: Auto Loans & Financing News

Ford reports rise in resale value, fewer repairs

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Posted in Auto Loans & Financing News, Ford

Ford vehicles with one to five years on the road are fetching higher resale values during the first quarter of 2010 compared to the same period last year, according to the latest North American Dealers Association auction data.

In a news release, the Dearborn, Michigan-based carmaker reported that its car fleet gained 23 percent year-over-year improvement in resale value, outpacing the industry average by 4 percentage points.

“Ford products have outperformed the overall market, especially in the increasingly important segments of compact cars, midsize cars and crossover vehicles,” said Tom Webb, chief economist at Manheim Consulting. Webb cited the 2010 Ford Taurus, which he said sells 50 percent higher at auction than the 2009 Taurus after one year in service.

Meanwhile, Ford also reported that warranty repair rates have declined by 40 percent globally in the past three years, claiming that Ford, Lincoln and Mercury vehicles now have the “fewest number of defects of any full-line manufacturer.”

Ford reported Tuesday its best quarterly performance in six years with a profit of $2.1 billion. According to the New York Times, the last time Ford earned a quarterly operating profit of $2 billion was in 2004, when it sold nearly 17 million cars in the U.S. Ford expects to sell less than 12 million this year.

Car loan interest rate drops to record low

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Posted in Auto Loans & Financing News

Consumers may be better off buying cars now as a new study found that the average automobile finance rate dipped to 4.4 percent in March, the lowest rate in the last eight years.

Edmunds.com said Toyota has the lowest average finance rate at 1.9 percent, followed by Mazda (2.5 percent) and Mercury (3.3 percent). Kia claimed the spot with the highest interest rate in March at 7.1 percent.

“Low interest financing is compelling for consumers because those who qualify often enjoy greater savings than they would get from a cash-back offer,” said Jessica Caldwell, a senior analyst at Edmunds.com.

In other trends, Edmunds.com reported that of all luxury brands BMW had the highest average down payment, $13,614, and the shortest average loan term, 52.4 months. Subaru took this spot in the non-luxury category with an average loan term of 60.9 months and highest down payment of $3,911.

Dodge had the industry’s longest average loan term, 67 months, followed by Chevrolet at 66.6 months and Hyundai and Kia at 66.1 months. Scion buyers financed the lowest average dollar amount, $18,978, and the lowest average monthly payment, $348.

Good time to refinance an auto loan

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Posted in Auto Industry News, Auto Loans & Financing News

An online aggregator of financial rate information has reported that many of this year’s auto loan refinance rates are 1 percent to 2 percent lower than they were in April of last year, depending on the length of the refinance loan.

“Refinancing an auto loan may be a good option if you need to reduce your monthly expenses in order to get your finances back on track,” said Tara Baukus Mello, an analyst at Bankrate.com.

While it is ideal not to extend the length of any loan, job loss or other similar situations could urge people to consider refinancing their loans to ease some financial burden, according to the news provider.

For example, a car purchased in April 2008 for $28,000 and financed for five years at 6.53 percent (the national average at the time) requires a monthly payment of about $550. This means the owner currently owes the bank a little less than $18,000.

Refinancing the remaining amount for four years, at the national average rate of 5.38 percent, would drop monthly dues by $133 and the owner would spend just $176 more in interest over the life of the loan, Mello said.

According to a Businessweek report, refinancing an auto loan might be a very good idea in the near future because interest rates remain at historically low levels. “Whether you have a used car loan or a bad credit personal loan, you could probably get the interest rate lowered if you go through a refinance process in the near future,” the report said.

Maine tops list of least expensive state to buy for car insurance

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Posted in Auto Loans & Financing News

Car buyers always want to get the best deal. Those who want to get more but pay less for auto insurance may want to go to Maine, which boasts the lowest average rates in the country.

According to Insure.com, the average car insurance rate in Maine is $902.85, almost two times lower than Louisiana’s $2,510.87, which claimed the title as the most expensive state in which to get car insurance. New Jersey ranked No. 22 with $1,473.73, slightly higher than the national average of $1,429.26.

Maine’s low car insurance rates stem from the fact that its average annual mileage is low relative to other states. The largely rural state has the small population of 1.3 million people, which means fewer people on the roads and fewer claims.

Meanwhile, Louisiana’s No. 1 ranking can be explained by its court system. Only cases with claims in excess of $50,000 receive a jury trial, driving up out-of-court settlements to $49,000 that insurance companies must pay.

Rounding up the five most expensive states in which to buy car insurance are Michigan, Oklahoma, Montana and California, while other states with the least expensive rates include Vermont. Ohio, Wisconsin and New Hampshire.

New Jersey economy on the mend

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Posted in Auto Loans & Financing News

Even as a multitude of snowstorms hammered the east coast in February, the state of New Jersey had its most economically successful month in more than two years.

Over the last six months, experts have said that the recession has ended and the economy is back on track. However, significant improvements in the job market had not been felt by the majority of residents.

Fortunately, the New Jersey Department of Labor and Workforce Development reported on Wednesday that the state added 3,700 jobs in February, all of which came in the private sector, APP.com reports. The unemployment rate is now at a five-month low of 9.8 percent.

“I’m starting to get interviews, maybe once every two weeks, whereas before it wasn’t that much,” said Justine Nardone, 54, of Ocean Grove, who is currently unemployed.

The state of New Jersey saw the jobless rate increase for 23 consecutive months from December of 2007 to the end of last year, more than doubling the unemployment rate in that time. However, as the state and the nation have put together a string of economically vibrant months, consumers and job seekers are beginning to see light at the end of the tunnel.

“It’s certainly a positive sign,” said James Hughes, an economist and dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, quoted by the news source. “I think we’re going to see an erratic pattern going forward, which happens at the end of recessions.”

Overall employment in the state grew to 3,853,400 in February, with the largest gains seen in the financial activities industry, the professional and business services field as well as the health and education sectors, according to Business Week.

Meanwhile, Michael Drewniak, press secretary for Governor Chris Christie, reiterated on Wednesday the administration’s pledge to reform the business climate in the state of New Jersey and make job creation the number one priority.

While calling the Department of Labor report “reassuring,” Drewniak also noted that the governor and his staff have plenty of work still to do.

“The governor and his entire administration are committed to restoring fiscal stability, growing our economy and reforming our business climate to secure New Jersey’s place as a place for strong, ongoing business growth and job creation,” he said in a statement.

Report: Economy improving, unemployment numbers falling

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Posted in Auto Industry News, Auto Loans & Financing News, General Auto News

The economy took another step in the right direction on Thursday, with the U.S. Labor Department reporting that the number of people applying for unemployment benefits fell by 5,000, to a seasonally adjusted 457,000 in the week ending March 13, according to Market Watch. The news coming out of Washington marks the third consecutive week that unemployment claims have dropped.

Additionally, the report said that labor market and consumer pricing indicate that the U.S. economy is experiencing moderate growth, and that inflation has been successfully contained. In fact, core inflation has only risen 1.3 percent – the lowest figure since 2004, Reuters reports.

Meanwhile, after months of anticipation, President Obama signed into law a $17.6 billion dollar jobs bill earlier this week, giving hope to those who have yet to find employment after last year’s recession.

“A consensus is forming that, partly because of the necessary – and often unpopular – measures we took over the past year, our economy is growing again and we may soon be adding jobs instead of losing them,” said Obama.

“The jobs bill I’m signing today is intended to help accelerate this process,” he added.

U.S. economy shows signs of rebounding

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Posted in Auto Industry News, Auto Loans & Financing News

After a rather trying 2009, it seems the U.S. economy has begun to pick up steam. Two separate reports by offices of the Federal Reserve have indicated that the economy has experienced moderate improvement over the last few months.

On Wednesday, the Federal Reserve released the latest Beige Book, which is a nationwide survey of economic conditions based on information collected from the Fed’s 12 regional bank districts.

Officials with the New York region – which includes New York, New Jersey and parts of Connecticut – said the local economy flashed further signs of improved strength and that many manufacturers are planning to increase capital spending and employment in the coming months, according to the Associated Press.

The report also indicated that the majority of retailers reported sales ahead of expectations, although the recent snow storms did hinder business in some areas.

Meanwhile, Richard Fisher, president of the Federal Reserve Bank of Dallas, said on Tuesday during an interview with PBS that the entire U.S. economy was “not robust but improving,” according to the Wall Street Journal.

Auto financing now available to consumers with poor credit

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Posted in Auto Industry News, Auto Loans & Financing News

As the dust continues to settle from the economic crisis, the automotive financing climate has begun to make its recovery. Toward the end of last year, lenders began offering more loans to car buyers, even those with average of below-average credit histories, Auto News reports.

Many industry experts believe that the lenders are approving more loan applications because credit markets have opened up substantially, which has improved lenders’ liquidity.

Late last year, GMAC, the principal lender for General Motors and Chrysler, received nearly $1 billion after selling auto loan securities, money that they have used to write new loans.

Tony Boutelle, CEO of Credit Union Direct Lending, told Auto Week that lenders are now willing to consider prospective car buyers who have had a foreclosure but still have steady income.

“In the past, if you have a foreclosure on your credit report, forget about buying a car for seven years,” he said. But now, lenders “are loosening up to at least make offers to those individuals.”

If you have good credit or bad credit, New Jersey State Auto Auction has the financing resources to get you approved.

How to improve your credit score

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Posted in Auto Loans & Financing News, How To

For consumers in the market for a used car in New York or New Jersey, having bad credit does not mean that you can’t afford your vehicle of choice. However, improving your credit score can make it easier to obtain a car loan and can lower your monthly payments.

If you have bad credit or even no credit, don’t feel that you are alone. Currently, there are over 30 million people in the U.S. that have significant blemishes on their credit report. Taking the steps to improve your credit score will take some time, but it is not an overly complicated process.

The easiest way to improve your credit is to pay your bills on time. Delinquent payments can have a negative impact on your score– being punctual with your bills can help eradicate past mistakes.

“The mantra for getting a great score is pay your bills on time [and] keep account balances low,” says Craig Watts, consumer affairs manager for Fair Isaac Corp, quoted by BankRate.com.

“People who do that faithfully have very high scores. It usually means you’re being conservative and cautious about credit. It’s not a toy and it shouldn’t be a hobby,” he added.

Moreover, be certain to pay off any past-due notices before they are forwarded to a collections agency. Any bill sent to a collector will stay on your report for the next seven years. If you feel that your bill is inaccurate or unjustified, make sure to contest it before it becomes past-due. Even if you are absolved of a particular charge, interest payments and late fees may show up on your credit report.

Another good tip for raising your credit score is to keep your credit card balances as low as possible. Holding on to debt from month to month will not only increase your interest payments, but will also harm your credit score. Also, do not simply move your debt to other credit cards – it will not help lower your score, reports MyFico.com, a consumer credit advice website.

Furthermore, check your credit card limits before making a purchase that will involve your credit score. “Your scores might be artificially depressed if your lender is showing a lower limit than you’ve actually got,” says Liz Weston of MSN Money.

The good news is that car loans can be much easier to obtain than personal loans. If you have good credit or bad credit, New Jersey State Auto Auction has the financing resources to get you approved.

Economist: Used car sales likely to increase

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Posted in Auto Loans & Financing News, General Auto News

In the January edition of the Manheim Consulting Auto Industry Brief, chief economist Tom Webb said that he expects used car sales to climb in 2010.

“Used-vehicle retail sales are inherently stable and are supported by the 250 million vehicles in operation and the 118 million households that own them,” said Webb, quoted by Auto Remarketing Magazine.

“That means, on any given day, there are literally tens of thousands of households that would like to trade up to something a little better, if they can do so for an affordable payment,” he added.

Over the past two years, the number of consumers looking to trade-up to a higher quality used vehicle has decreased due to a slow job market and tighter credit restrictions. However, Webb noted that he expects the availability of retail financing to improve in the coming year, making it easier for consumers to obtain used car loans.

Meanwhile, Manheim’s chief economist also mentioned that independent dealers of new cars may continue to experience financial issues due to the national struggle to obtain floor plan and capital loans.