Car Loan Tips
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Are You Buying a Car? Consider This Tip
   
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Comprehending A Credit Report
Obtaining a credit report is an excellent way to begin taking control of your financial future. It's recommended that you review your credit report once a year, not .....
Obtaining a credit report is an excellent way to begin taking control of your financial future. It's recommended that you review your credit report once a year, not .....
Nothing upsets me more than when I see someone being taken
advantage of because they didnt understand finances and the
salesman who takes advantage of them knows this. I have seen
Debt Solution Service UK
Jane was a fun loving girl from Birmingham, you could say she lived for today. She wanted all the latest fashions and gadgets and certianly .....
this with loan officers for financing of homes and carJane was a fun loving girl from Birmingham, you could say she lived for today. She wanted all the latest fashions and gadgets and certianly .....
dealerships too many times. Unfortunately I find out about the
deal after the client had already signed the papers or before
they decide to contact their accountant for help. So I offer
this information to you in hopes that you wont make this same
mistake. Heres the story..
Bob goes to Big3 Car Dealership and wants to buy a car. He picks
out the car and then goes to the finance department to finalize
the numbers. The finance department offers to save him 4
payments if he sets up a biweekly auto deduction from his
checking account. This sounds like a pretty good idea to him
since he does nothing and gets to reduce the total price paid
for the car by 4 payments. But you will see in the finer details
why this wasnt such a good idea.
Heres how it works. The biweekly payment comes out of your bank
account biweekly and goes into an interest-free escrow account
by a third-party payer. The third-party payer then writes a
check once a month to the loan company. The fee that was paid to
the third-party payer for this service out of these biweekly
payments was $428.00. And if Bob realized what a bad deal this
was and tried to cancel, he still had to pay the third-party
payer the $428.00. The sad thing is that Bobs bank couldnt
even tell him where the biweekly payments were going and the car
loan company couldnt tell him what the check number, bank
account or name of the company paying his car loan was.
Now if the finance department wanted to truly help Bob they
could have suggested to him that he could have biweekly payments
made directly to the loan company from his bank and had the
payments applied immediately to the car loan balance rather than
have the third-party payer make the payments once per month.
This would have allowed him to reduce his interest on the loan
since the payments are applied when deducted from his checking
account biweekly and received immediately thereby prepaying the
loan. This would have eliminated the third-party payer and saved
him the $428.00 he paid to them for their fee. If he had done
this, he would have reduced his payments on the loan by much
more than the 4 payments that he was saving going through the
third-party payer.
Another way you can save if your loan company wont apply the
payment until its due is to set up a savings account with your
bank. You can have the biweekly payments automatically withdrawn
from your checking account and put into your savings account and
then have the monthly payment automatically paid from your
savings to the loan company. You reduce your payments by more
than 4, you keep the $428.00 fee you would have paid to the
third-party payer and you make the interest on the money when it
is in your savings account.
The next time you finance your car and are asked if you want to
do the biweekly payments to prepay your loan through a
third-party payer, ask the finance department to help you set up
the payments directly to the loan company or ask your bank to
help you set up a savings account and have the payments made
directly to the loan company from the savings account once per
month. The fees for this should be minimal and very possibly
free.
This is just one tip you should consider when buying a car. Go
to http://www.dgoodmancpa.com/individuals.htm#FINANCEVEHICLE for
more important tips when purchasing a vehicle. If you have a
specific question about your particular situation, you can
e-mail me at dianne@dgoodmancpa.com.
This article was intended to provide general information about
buying a vehicle. It does not contain all the information needed
to purchase a vehicle. If you have further questions, I can be
reached at www.dgoodmancpa.com.
You have permission to reprint what you just read. Use it in
your ezine, at your website or in your newsletter. The only
requirement is to include the following footer... Buying a Car?
Consider This Tip by Dianne Goodman, visit
http://www.dgoodmancpa.com for more content like this.
About the author:
About the Author
Dianne Goodman, CPA Specializes in servicing Small Businesses
and Individuals. Visit www.dgoodmancpa.com for relevant and
current information on a variety of financial and tax issues
focusing on small businesses and individuals or call at
1-888-851-1975.
CONTACT INFORMATION:
Dianne Goodman, CPA Comprehensive Small Business Solutions, PC
505 323-2307 1 888-851-1975 toll free http://www.dgoodmancpa.com