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How to avoid buying a water-damaged car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by offering interactive tools and financial calculators, publishing original and objective content, by enabling users to conduct research and compare information at no cost to help you make sound financial decisions. Bankrate has partnerships with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this site are from companies that pay us. This compensation may impact how and where products appear on the site, such as, for example, the order in which they may appear in the listing categories and other categories, unless prohibited by law. Our loans, mortgages, and other home loan products. However, this compensation will have no impact on the information we provide, or the reviews you see on this site. We do not cover the universe of companies or financial deals that might be accessible to you. Luis Diaz devesa/Getty Images

5 min read Published June 22, 2022

Written by Mia Taylor Written by Contributing Writer Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to manage their finances with concise, well-researched and researched information that break down complex issues into digestible chunks. The Bankrate promise

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At Bankrate we aim to help you make better financial choices. We are committed to maintaining strict journalistic integrity ,

This post could contain the mention of products made by our partners. Here's an explanation for how we earn money . The Bankrate promise

Established in 1976, Bankrate has a long history of helping people make wise financial decisions.

We've earned this name for over four decades by simplifying the process of financial decision-making

process, and giving people confidence in which actions to follow next. Bankrate follows a strict ,

so you can trust that we're putting your interests first. Our content is created with and edited ,

They ensure that what we write is objective, accurate and reliable. We have loans reporters and editors concentrate on the points consumers care about the most -- various kinds of loans available as well as the best rates, the best lenders, the best ways to pay off debt and much more. So you can feel confident when making a decision about your investment. Integrity in editing

Bankrate follows a strict standard of conduct, which means you can be confident that we put your interests first. Our award-winning editors and reporters provide honest and trustworthy information to aid you in making the best financial decisions. Key Principles We value your trust. Our mission is to offer readers accurate and unbiased information. We have established editorial standards to ensure that happens. Our reporters and editors rigorously fact-check editorial content to ensure the information you're reading is correct. We keep a barrier between advertisers as well as our editorial staff. Our editorial team doesn't receive direct compensation from our advertisers. Editorial Independence Bankrate's team of editors writes for YOU - the reader. Our aim is to provide you the best advice that will aid you in making informed personal finance decisions. We follow strict guidelines in order to make sure that the content we publish isn't in any way influenced by advertising. Our editorial team receives no any compensation directly from advertisers and all of our content is checked for accuracy to ensure its truthfulness. So whether you're reading an article or a report, you can trust that you're getting credible and reliable information. What we do to earn money

There are money-related questions. Bankrate has the answers. Our experts have been helping you master your finances for more than four years. We strive to continuously give consumers the professional guidance and the tools necessary to succeed throughout life's financial journey. Bankrate follows a strict policy, which means you can be confident that our content is truthful and precise. Our award-winning editors and journalists provide honest and trustworthy content that will help you make the best financial decisions. The content we create by our editorial staff is objective, factual and is not influenced through our sponsors. We're honest regarding how we're in a position to provide quality information, competitive rates and helpful tools to our customers by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the placement of sponsored products and, services, or by you clicking on certain links posted on our website. Therefore, this compensation may influence the manner, place and in what order products appear within listing categories, unless it is prohibited by law for our mortgage, home equity and other products for home loans. Other elements, like our own proprietary website rules and whether a product is available in the area you reside in or is within your self-selected credit score range may also influence how and where products appear on this website. While we strive to provide the most diverse selection of products, Bankrate does not include specific information on each financial or credit item or service. Car buyers throughout the nation may be impacted by destructive floods by unknowingly purchasing water-damaged cars. Used and new vehicles that have been that have been damaged by floods of significant magnitude, like Hurricane Ida which hit 2021 in the year 2021 could find their way to the market after a storm. Carfax data shows that as many as 212,000 vehicles could have been damaged by the hurricane Ida. If flood-damaged cars are sold, unsuspecting buyers often face expensive mechanical and electrical problems that are discovered several months later. Even if you don't live in a region in which flooding is common, you can still inadvertently buy a vehicle that has water damage. Carfax research shows that vehicles that have been damaged by water are present across all states, which means people from coast to coast are at risk of purchasing a flood-damaged car. How do you tell if a car has water damage Damaged cars from water can be difficult to spot. They often look fine and may even run well for a while. However, eventually, you are likely to be faced with problems because flooded cars begin to decay from the inside. Here are a few indicators that your car could be damaged by water smell musty A car's interior that has been damaged by water cars will often smell musty. Some sellers will try to cover up the smell using powerful air fresheners, but it's very difficult to remove a car from a musty smell. One method to determine the car's smell is to be inside the vehicle and close the windows. Moist or damp carpeting water damage may accumulate in areas you cannot immediately see such as underneath carpeting. Take a look at the carpets in the car, and rub them to locate any potential moisture buildup. Examine the trunk too taking off the spare tire to look for any water underneath it. Carpeting that is stained or unmatched carpeting: Another indication that water has damaged your vehicle is to see a vehicle that has stained or loose upholstery and carpeting. Look for blotchy, brown streaks, which are indicators that water has damaged the car. In the course of inspections, compare carpeting on the floor with upholstery on the doors as well as the roof. All of them should appear to be of similar in age and color. Rust: A vehicle that has water damage might be covered in rust on the doors, inside the hood, and even under the dashboard. Screws, door hinges or trunk latches as well as door handles could be showing signs of rust. Brittle wires: Examine under the dashboard if you suspect a car may have water damage. Brittle wires could indicate that the vehicle is a victim of an event that caused water of any kind. Fog or moisture beads: If your vehicle's interior lights instruments, exterior lights, or lights appear dim or have water beads in them, consider it an indication that the vehicle may have water damage. Mud or silt buildup: In floods, specifically water may carry dirt and mud into a vehicle. After the flood has gone and the dirt is gone, it will be left behind. The most common places to look for silt and mud include the glove compartment, trunk, under the dashboard, and under the seats. 4 ways to avoid buying the car that has been flooded. If you suspect that your vehicle might have water or flood damage It is essential to conduct your homework and find out whether your instincts are correct. There are many tools to assist you in getting to the root of this vital issue, and also warning signs to look out for. 1. Check the history of your vehicle Running a vehicle history report can reveal problems with a vehicle before you make a purchase. A sure indication of a damaged car will be one identified as such. Departments of motor vehicle require permanent title marks on vehicles that were badly damaged by floods. If the vehicle was declared to be totaled, it's required to get the new title completely that is labeled "salvage" as well as "flood." Depending on the condition this information could be indicated by a numeric code. Carfax and Experian offer flood check tools which allow users to run an uncostly check of the past of a car. The platforms require only the VIN of the car that is being investigated. When looking through a car's history take a look for vehicles originating from areas hit by the floods. There is a National Insurance Crime Bureau also provides free VIN checks online that permit consumers to find out whether a car has been declared salvaged. You will want to check a car's historical report to determine if the vehicle has been sold numerous times in a short period of time. Be particularly leery of a history that involves buyers from multiple states. This could be a sign of what's referred to as car "title washing," where unscrupulous sellers retitle the car several times to conceal the car's history. 2. Look for evidence of water damage. Cars which were submerged in water will often show obvious signs, however they can be subtle, especially if the car was cleaned prior to resale. Be aware of the smell of mold or musty such as those emanating through the system for controlling temperature. Note any stains that appear on the car's interior or engine compartment, as well as on the trunk. Mud, dirt, or sand in odd places , and seat belts that sound sluggish when they are extended or pulled back are all signs of water damage. It's also important to try driving a car in particular, particularly one that may have water or flood damage. Tips to look out for when you test drive are compromised electrical systems and infotainment systems that could be triggered if they've been affected by water. It is also important to look for signs of smoke during your test drive. 3. Be cautious about cars that are priced below market value. There's a good reason behind the saying that something is too great to be true. This includes cars being priced way below worth, and this can be an indicator that something isn't right. Look up the median selling price for the vehicle you're thinking of buying through independent price sites for vehicles such as Edmunds or Autotrader. A used or new car sold at a price that is lower than the market value is an sign that the seller is looking to dispose of it. Buyers need to be careful when a car is advertised at a substantial discount. In addition to asking questions regarding the reason why the vehicle is listed for much less than it should be, it may be an excellent idea to have the car examined by a professional who will identify any problems. 4. Take a professional inspection generally a wise idea hire a certified mechanic or automotive technician to examine a vehicle prior to you buy it, but it's even more crucial to take this step to protect yourself from water damage to your car. An expert can to ease your mind, particularly when the vehicle you're considering has one or more of the signs that are listed here. Be sure that the inspection not only includes obvious indications of water damage but also a thorough test of the electronic equipment, as problems that are related to these systems may be a long time before they are discovered. Although a pre-purchase inspection usually be paid for by the buyer, it will be money well spent in the event that it stops you from ending up with an automobile that's unsatisfactory. It is possible to pay between $100 and $200 to have an inspection. What do you do if purchased a car that has been damaged by water If you've bought a car that has water damage all might remain intact. It is possible to repair the car with a skilled mechanic. But remember, these aren't DIY fixes. It will require a professional who has extensive knowledge of cars. Also, keep in mind that the repair of an affected vehicle after a flood won't be cheap, so you'll have to figure out if it's worth the expense. Particularly since damaged cars from floods generally don't have a resale value. The bottom line is that flood-damaged vehicles are utilized in every state across this nation. If you suspect a car may have been impacted by flooding or some other kind of water-related event, there are several steps to take including running a vehicle history report, examining for obvious indications of water damage, and having the car inspected by a professional. Remember, even if you aren't in a region impacted by flooding, you may accidentally end up with a damaged or damaged vehicle. Learn more

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Written by Contributing Writer Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are dedicated to helping their readers gain the confidence to take control of their finances by providing precise, well-studied information that break down complex topics into digestible chunks.

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Similar Articles: Auto Loans 5 minutes read Oct 13 2022. Auto Loans 5 min read on Oct 10 2022. Loans 3 min read Sep 27, 2022 Loans three minutes read September 27 2022. Auto Loans 3 min read May 12, 2022

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How steep interest rates have negated steadying car prices Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial choices by providing you with interactive financial calculators and tools as well as publishing independent and objective content. We also allow users to conduct studies and to compare information at no cost - so that you can make informed financial decisions. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that are advertised on this website come from companies that pay us. This compensation could affect how and where products are displayed on this website, for example such things as the order in which they appear within the listing categories and other categories, unless prohibited by law. This applies to our mortgage, home equity and other products for home loans. But this compensation does not influence the information we provide, or the reviews you read on this site. We do not include the vast array of companies or financial deals that may be open to you.

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5 min read published on March 22, 2023.

Written by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers in navigating the ways and pitfalls of borrowing money to purchase an automobile.

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain the confidence to manage their finances through providing concise, well-studied information that break down complex subjects into bite-sized pieces.

The Bankrate promise

More information

At Bankrate we are committed to helping you make better financial choices. We adhere to the highest standards of journalistic integrity ,

This post could contain the mention of products made by our partners. Here's how we earn money .

The Bankrate promise

Established in 1976, Bankrate has a proven track experience of helping customers make informed financial decisions.

We've maintained this reputation for more than 40 years by simplifying the process of financial decision-making

process, and gives people confidence about what actions to take next. process and gives people confidence in the next step.

So you can be sure you can trust us to put your needs first. All of our content was created in the hands of and edited by

They ensure that what we write ensures that everything we publish is accurate, objective and trustworthy. We have a team of loans reporters and editors concentrate on the points consumers care about the most -- various kinds of lending options and the most competitive rates, the top lenders, the best ways to repay debt, and many more, so you'll be able to feel secure when investing your money.

Integrity of the editorial process

Bankrate adheres to a strict code of conduct and rigorous policy, so you can rest assured that we put your interests first. Our award-winning editors and journalists provide honest and trustworthy content to assist you in making the right financial decisions. The key principles We value your trust. Our mission is to provide our readers with reliable and honest information. We have established editorial standards to ensure that happens. Our editors and reporters rigorously fact-check editorial content to ensure the information you're receiving is accurate. We have a strict separation with our advertising partners and the editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence Bankrate's editorial staff writes in the name of YOU the reader. Our aim is to provide you the best advice that will help you make smart financial decisions for your personal finances. We follow strict guidelines to ensure that our editorial content isn't affected by advertisements. Our editorial team receives no directly from advertisers, and our content is thoroughly fact-checked to ensure accuracy. If you're looking at an article or review, you'll be able to trust that you're getting reliable and reliable information.

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You have money questions. Bankrate can help. Our experts have been helping you manage your money for over four decades. We are constantly striving to provide our readers with the professional guidance and the tools necessary to make it through life's financial journey. Bankrate adheres to a strict code of conduct policy, which means you can be confident that our content is truthful and reliable. Our award-winning editors and journalists create honest and accurate content that will help you make the right financial decisions. The content we create by our editorial staff is accurate, truthful and is not influenced by our advertisers. We're honest about how we are capable of bringing high-quality information, competitive rates and useful tools for you by explaining how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods or services, or by you clicking on specific links on our site. So, this compensation can impact how, where and in what order products appear in listing categories, except where prohibited by law. We also offer credit, mortgage, and other home loan products. Other elements, such as our own rules for our website and whether a product is offered in your area or at your personal credit score could also affect the way and place products are listed on this site. While we strive to provide an array of offers, Bankrate does not include information about each financial or credit item or service.

The past two years of car prices have been a rollercoaster for both drivers and sellers. This summer was a record year for price transactions and an MSRP of $48,000, as per Kelley Blue Book (KBB) and followed suit. Fortunately, prices for cars have been settling down in the last few weeks, following peak prices during the summer. But , at the same time -- interest rates have been rising. This synchronous increase in rates as well as a drop in price has undermined any positive outcomes for consumers. Rates of interest for new cars in October, up from 4.2 percent just one year ago, according to Edmunds data. This has compounded into a frustrating circumstance for drivers getting some relief over the sticker cost. With the prospect of the recession is looming in the near future, it is essential to know how it could ripple down and impact the cost of owning the vehicle. Monthly payments are up 3percent. A person's monthly payments are based on several elements, such as the car, and the loan duration. However, it is also dependent on the benchmark rate set by the Federal Reserve, which auto lenders use to . As as the Fed rate has risen -which is currently set at 4.75-5 percent in the last year, the cost to borrow money has also increased. That means that lenders have increased their costs to finance. The more it costs for financing, the higher the interest rates, and the higher the monthly cost is. October set a record for the monthly average of new car payments costing $748 according to KBB. While prices have decreased by almost 5 percent the monthly payment is up 3.3 percent, as per an CoPilot study. Although this increase might seem slight, it amounts to over 1,000 dollars in the . This result was not good for drivers who were finally feeling relief from declining vehicle prices. Any savings could end up being offset by the rising interest rates. Even if vehicle transaction prices are more accessible, the will still be higher, which makes it difficult for drivers to in the first place. Lower wholesale prices have not been reflected over to retail Logic tells us that when wholesale prices are lower and the cost that consumers pay should be lower as well -- but unfortunately it's not the scenario. Since the beginning of the year wholesale prices have fallen more than 15 percent. But the average cost of transactions for cars is higher. This is primarily due to the constant demand for new vehicles. October was the month with the highest amount of new vehicle inventory since May of 2021. But just because the vehicles are readily available does not mean drivers can afford them. For many drivers buying a car right now is not worth the cost. In October, as mentioned earlier, there were records for monthly payments, which topped $750, according to KBB. Also, even though the vehicles inventory increased but it's still low by historical standards. This shortage of inventory results in continued high prices for the retail market. Increase in credit union car loans A reaction to the high interest rates has led some borrowers to finance with . The difference between financing through a credit union is based on the amount of money available. Credit unions are owned by members and are not for profit that means they typically have less fees and lower loan rate of interest. For the quarter that ended in the year 2022, Experian discovered that credit unions have trended up in market share in the last five years, but have fallen in line with the Fed raising interest rates. The ability to get financing through credit unions is one way motorists are finding relief from this . The fight of the Fed to curb inflation is not going to end anytime soon. Federal Reserve walks a thin line between regulating inflation while ensuring that prices remain affordable for consumers. The market for automobiles is an illustration of which inflation isn't yet at a level that is under control. Unfortunately, these higher rates are expected to not go away anytime in the near future. "Affordability will be in doubt for years to come in both used and new market," explains Cox Automotive Chief Economist Jonathan Smoke. "It's not the fault of the Fed, but it will impact the access of consumers to transportation." KBB found an average earner would need to put in 40 weeks of work to finance a new vehicle. Such statistics, as Smoke says, make the financing of vehicles particularly difficult for people with lower earnings. "Higher rates have already shifted access to vehicles and financing towards wealthier consumers," he says. Limited access to vehicles also makes it challenging for consumers to react as they may have in similarly challenging economic times. In the aftermath of the 2008 recession, consumers were able to benefit from incentives on vehicles as well as an influx of dealerships wanting to sell. But with less inventory available and no relief for drivers. Two major reactions to the likelihood of inflation increasing are that the overall level of debt is increasingwhich is reflected in rising delinquency rates as well as drivers experiencing faster rate of appreciation. The amount of auto loan debt continues to increase Overall loan balances have grown 8 percent in the first quarter of 2021 until 2022 according Experian. This feeds into the massive . On top of general debt growth The number of borrowers increased. In the second quarter of 2022 TransUnion found that 3.34 per cent of automobile loans were more than 30 days delinquent. This is among the highest rates of delinquency in the last couple of years. Although it's true that some of this is due to the backlog of accounts due to the pandemic, the rise is nonetheless notable especially for those who are most greatly affected. "Delinquencies remain at previous levels for the majority of credit products. However, they have increased in the past year, especially among subprime consumer segments," states Michele Raneri, vice president of U.S. research and consulting at TransUnion. The forecast also predicts that auto loan balances will surpass the remaining balance of student loans in the first half of 2023, as per the Consumer Financial Protection Bureau. This increases the effect of domino effects that decisions from the Central Bank have on vehicle affordability. As delinquencies rise to pre-pandemic levels, it's important to understand how increasing rates of interest will increase the cost of a vehicle, and thus the likelihood of delinquency. Drivers are faced by a faster than normal depreciation of their vehicles On the top of the high cost of vehicles along with interest costs, motorists are likely to lose money in the next few months because of the speedier depreciation of their vehicles as per Henry Hoenig, data journalist for Jerry. The primary reason for this is down to the timing at which drivers purchase their vehicles. "People who bought used vehicles in the past year or two were charged exorbitant price," Hoenig explains. The used car market gets cooler, these buyers are at the highest risk of rapid decline. However, it's not all bad news for car owners. "For at least the next two years or so, used vehicle prices are unlikely to fall back to the levels they were prior to the huge run-up in the last two years," Hoenig says. This is due in large part to the fact that the supply will not return to its normal levels within the next few months. This isn't the right time to purchase a car High vehicle costs aren't the only expenses that Americans are being afflicted with. "Consumers are under pressure in a variety of ways in the current situation of high inflation and secondarily by the higher rates of interest are being imposed by the Federal Reserve is implementing to slow it down," Raneri explains. The purchase of a car can be one of the biggest expenditures consumers make. And with steep interest rates being a factor, patience could be a viable option. The reality of expensive prices is not a surprise, however, waiting for a major purchase like a vehicle can mean money saved. If you don't have the luxury of waiting for a car, be prepared to pay more and look into ways to save when buying the car you want in .

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Authored by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers with the ways and pitfalls of borrowing money to purchase a car.

Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers to take control of their finances with precise, well-researched and well-documented data that breaks otherwise complicated subjects into digestible pieces.

Auto loans editor

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Are you denied an auto loan? Here's everything you need to know Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by offering interactive tools and financial calculators, publishing original and objective content. We also allow you to conduct your own research and analyze data for free - so that you can make informed financial decisions. Bankrate has agreements with issuers such as, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website are provided by companies that pay us. This compensation can affect the way and where products appear on this website, for example for instance, the sequence in which they be listed within the categories of listing and other categories, unless prohibited by law. Our mortgage, home equity and other home lending products. But this compensation does not influence the information we provide, or the reviews that you see on this site. We do not cover the vast array of companies or financial offerings that might be accessible to you. yourstockbank/Getty Images

4 min read Published 12 October 2022

Written by Kellye Guinan. Written by Personal and business finance writer Kellye Guinan is an editor and writer freelance with more than five years' experience in personal finance. She is also an employee full-time at her local library where she helps people in her community gain access to information on financial literacy, in addition to other topics. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping their readers feel confident to manage their finances through providing precise, well-researched and well-researched data that breaks down otherwise complex subjects into bite-sized pieces. The Bankrate promises

More details

At Bankrate we are committed to helping you make smarter financial decisions. While we are committed to strict journalistic integrity ,

This post could contain some references to products offered by our partners. Here's an explanation for how we earn money . The Bankrate promise

Founded in 1976, Bankrate has a long experience of helping customers make wise financial decisions.

We've maintained this reputation for over four decades by making financial decisions easy to understand

process, and giving people confidence about the actions they should take next. Bankrate has a very strict ,

so you can trust you can trust us to put your needs first. Our content is created in the hands of and edited by ,

We make sure that everything we publish is objective, accurate and reliable. The loans reporter and editor are focused on the points consumers care about most -- the various types of loans available and the most competitive rates, the best lenders, ways to pay off debt and many more, so you're able to be confident about making a decision about your investment. Integrity of the editing

Bankrate adheres to a strict code of conduct and rigorous policy, so you can rest assured that we put your interests first. Our award-winning editors and reporters provide honest and trustworthy content to help you make the right financial decisions. Key Principles We appreciate your trust. Our aim is to provide our readers with truthful and impartial information, and we have editorial standards in place to ensure that happens. Our reporters and editors thoroughly verify the truthfulness of content in order to make sure that what you read is accurate. We keep a barrier between our advertisers and our editorial team. Our editorial team doesn't receive compensation directly from our advertisers. Editorial Independence Bankrate's team of editors writes for YOU as the reader. Our aim is to offer you the best advice to aid you in making informed financial decisions for your personal finances. We adhere to strict guidelines in order in order to make sure that the content we publish is not influenced by advertisers. Our editorial staff receives no any compensation directly from advertisers and our content is thoroughly fact-checked to ensure accuracy. So when you read an article or reviewing you can be sure that you're getting credible and dependable information. What we do to earn money

There are money-related questions. Bankrate has the answers. Our experts have helped you understand your finances for more than four years. We strive to continuously give our customers the right advice and tools required to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct policy, which means you can be confident that our content is honest and accurate. Our award-winning editors, reporters and editors create honest and accurate information to assist you in making the right financial choices. The content created by our editorial team is factual, objective and is not influenced from our advertising. We're honest about how we are able to bring quality content, competitive rates, and useful tools to you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the promotion of sponsored goods or services, or when you click on certain links posted on our site. Therefore, this compensation may influence the manner, place and in what order products are displayed within the categories of listing, except where prohibited by law. This is the case for our loan products, such as mortgages and home equity, and other products for home loans. Other factors, like our own website rules and whether a product is offered in the area you reside in or is within your personal credit score may also influence how and where products appear on this site. We strive to offer a wide range offers, Bankrate does not include information about every credit or financial product or service. An auto loan application may be rejected due to your credit history or financial circumstances. If you contact your lender and reorganizing your finances and establishing a plan for making an application that won't be rejected in the future. What caused me to be not able to get an auto loan? Lenders frequently reject applicants due to their credit score or credit history, as well as overall debt. Incorrect information on the application may be refused the loan because of simple mistakes in the application. If you miss a section or write incorrect information the lender could reject your application without giving you the chance to amend inaccurate data. Make sure you review every aspect of your application to ensure you have everything correct. You may be able to reapply again, but accuracy the first time around will save you time. Low credit score Many lenders have minimum credit scores as part of their criteria for eligibility. In general, lenders need that you have fair credit- scores of 620 or higher. If you have a credit score less than this requirement then you'll be immediately denied. There are . But these will cost more over the long term and might have higher costs -- like the origination fee or prepayment penalty as opposed to standard auto loans. A poor credit history If you have weak or no credit history, lenders won't be able to determine your capacity to pay subsequent auto loan repayments. They might use it as a reason to deny your application. Unfortunately, it will take time to amend this. It is necessary to take on other smaller, less hefty debts to build credit prior to applying again or apply with a cosigner. A large amount of debt If you're in the middle of debt gathered from other loans or credit cards in the meantime, your DTI ratio -- or debt-to-income ratio -- will be higher. If you have a DTI ratio of 50 percent or higher is considered a red flag and may cause rejection. Paying down your credit card debt is the best method to lower your DTI, but if you're able, a second source of income could reduce your DTI. What to do if you were refused an auto loan A rejection isn't the end of the world. Consider a few steps prior to applying for a loan again to increase the chances of getting approved. Get in touch with your lender Lenders must provide you with the exact reasons the application was rejected. If it isn't automatically sent, request to receive it in the 60-day period following your application. In the event that it is not sent, it falls out of The Equal Credit Opportunity Act. If it was as minor as an application error you are able to make changes and apply again. If the issue was due to your credit score or any other debts, you can improve them prior to submitting another application. Improve your credit score. Your credit score is one of the main factors lenders consider when they consider granting you a loan. Take the time to by looking over your credit score and making sure you pay your debts on time and decreasing your credit utilization ratio. This can take a few months. If you're looking for a loan quickly think about other options while you work on your score. But once you've built up an excellent repayment history the lenders will consider you as less of a risk. Be mindful of your debt. Keeping it low and reducing your debt is a crucial factor in attracting prospective lenders. The focus should be on paying your current debts and also avoiding any new loans and credit card purchases. Check your budget and attempt to eliminate any unnecessary expenditures prior to applying for. This is also a good way to minimize your debt-to-income ratio (DTI) which is the ratio that lenders utilize to determine whether you can comfortably pay for a new loan to pay. Find lenders with poor credit scores. There are lenders that take . This may be a means to get you behind the wheel sooner instead of later. These lenders market specifically to people with low credit scores. However, you must be aware of the options -- auto loans for those with bad credit tend to have more expensive interest rates which can cost you thousands of dollars in the long term. Other alternatives Your options don't necessarily depend on the ability of you to swiftly improve your credit score or reduce the amount of debt you have -- although each can be helpful. "Buy here pay here" dealers BHPH dealership may not be the perfect choice, but it can be an option for those with a low credit score and are looking for an automobile. BHPH dealerships both finance and sell the cars on their lot. Approval standards for credit are generally lower while the approval process can be much quicker than traditional lending. But interest rates are very high and there are not many cars readily available. Auto loans that are joint loans The term "joint auto" loan is where you and someone else usually a partner or spouse -- share equal responsibility for a car loan. The lender will take into consideration both income and credit scores when deciding on an approval. A joint application could lead to a lower interest rate as well as the chance to accept an additional loan because of the added income. Co-signed auto loan A co-signed auto loan is when you still carry the full responsibility of the monthly installments, but with someone else supporting your loan. Similar to co-signed auto loan the credit score and the co-signer's credit score will be taken into consideration when you apply. This increases your chance of approval, which could translate into more and terms. The bottom line If you've been denied, take an extra step. Your lender must provide you with a letter stating why you were rejected. Similar to everything that involves finance, preparedness is key. When you next apply, do your research, keep an eye on your credit score and decrease your overall debt prior to time. This will ensure that your application is as perfect as it can be when you send it to the lender. Find out more

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Written by Business and personal Finance writer Kellye Guinan is a freelance editor and writer who has more than five years of experience in personal financial. She's also employed full-time at the local library, helping people in her community get information about financial literacy, in addition to other topics. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain confidence to take control of their finances with clear, well-researched facts that break down otherwise complex subjects into bite-sized pieces.

Auto loans editor

Other Articles Related to Auto Loans six minutes read March 02, 2023 Auto Loans 4 min read Nov 16, 2022 Auto Loans 4 min read October 21 2022. Loans 6 min read Sep 30, 2022

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Capital One

Capital One: 2023 auto loan review published 2023-01-01 at 00:00:00.

Written by Allison Martin Written by

Allison Martin's career began more than 10 years ago as a digital media strategist. Since then, she's been published in several leading financial publications including The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain confidence to control their finances through providing precise, well-studied facts that break down otherwise complicated topics into bite-sized pieces.

Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial decisions by offering interactive tools and financial calculators, publishing original and objective content, by enabling users to conduct research and compare information for free to help you make sound financial decisions. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this site are from companies that compensate us. This compensation could affect how and where products appear on this site, including the order in which they appear within the listing categories, except where prohibited by law for our loan products, such as mortgages and home equity and other home loan products. This compensation, however, does affect the information we publish, or the reviews that you read on this site. We do not cover the entire universe of businesses or financial offerings that could be open to you.

Reviewer's disclosures: All reviews are prepared by our staff. Opinions expressed therein are solely those of the reviewer , and have not been reviewed nor acknowledged by any advertiser. The information that is included, including rates and fees that are included in the review is accurate as of the date of the review. Check the data on the right, and the lender's website for the most recent information.

A glance 4.0 Rating 4 stars out of 5

Bankrate Score

Rating of Availability 4 stars out of 5

Cost of Affordability: 3.2 stars out of 5

Customers Experience Score: 4.6 five stars of five

Transparency Rating 4 5 stars.

Find out about rates for auto loan rates

Concerning Capital One's Loan amounts $4,000 to $75,000

Min. credit score not specified

APR not specific from

Funds available as early as possible.

Pros and cons of Capital One auto loans While there are benefits with Capital One auto loans, there are some disadvantages to be aware of.

PROS Prequalification Available

Personalized financing options

No credit score is required for perfect credit.

CONS Two applications must be submitted

Limited to cars from approved dealerships

Not available in all states

Capital One offers auto loans for used and new car purchases. The entire loan procedure is conducted online via the Auto Navigator. You can see the current rates and monthly quotes on specific cars available to purchase through participating dealers. Refinancing may also be available, but your vehicle -as well as your current loan -- will have to meet certain conditions in order to be eligible.

Do you qualify? If you're buying a used vehicle, the amount that you'd like to finance has to be at least $4,000 , and the car must not be older than 10 years or exceed 120,000 miles. To refinance, your outstanding loan amount must be in the range of $7,500 or less and you have 12 months left. Your vehicle must not be older than 10 years- though there is no maximum mileage and the current loan servicer can't be Capital One. If you own a vehicle which is no longer in production or sold, it's not eligible for refinancing. We like it and what we don't like here are some of the benefits and drawbacks associated with Capital One auto loans. What we like : Get prequalified. You can utilize an Auto Navigator to prequalify within minutes, with no need to pull to your credit. Personalized financing options. The mobile app allows you to see the monthly payment and interest rate on specific automobiles. No credit score is required. Capital One may approve you for an auto loan with a lower credit score, however, you'll have to pay more interest. We do not like the fact that two applicants are necessary. You must complete the credit application once you arrive at the dealership, even if you already have been preapproved by Capital One. The only exception is cars that are approved by Capital One dealerships. You can only finance vehicles from dealerships who work together with Capital One. Not available in all states. Auto loans are not offered for residents from Alaska and Hawaii. How to contact Capital One Support from Capital One is accessible via telephone or via chat online. Representatives are available Monday through Friday from 9 a.m. to 9 p.m. ET, and Saturday between 10 a.m. until 7 p.m. ET.

Auto loan types available Capital One offers financing for used and new cars and car refinance loans.

Used and new auto loans

Quick facts about loans: $4,000 or more Terms are 24 to 84 months APR: Not stated

Capital One offers financing for new and used cars at more than 12,000 participating dealers. You can prequalify online and find out what terms you're eligible to receive before you shop to find the perfect car. In addition you can use the Auto Navigator lets you adjust the terms to create an auto loan that works for your budget.If you are planning to purchase a used vehicle that has under 120,000 miles and be within 10 model years. There are some exceptions to this, however, you'll need to discuss your car selection in person in conjunction with Capital One. Refinance

The loan's quick facts are: $4,000 to $75,000 Terms of the loan: 24 to 84 months APR: Not stated

Auto loan refinancing through Capital One is ideal if you're looking to lower your monthly payments or the APR. Both options will help you save money, whether monthly or over time, while you work toward paying off your auto loan. You may also refinance with Capital One to shorten the loan duration and get rid of your auto loan faster. How do you apply for a loan with Capital One You can start your application by getting prequalified without having to do a hard credit pull. If you're preapproved, you can view the monthly payment and interest rate on the cars you're interested in. Additionally, you have the luxury of changing the loan term or down payment in order to come up with an arrangement that is suitable for you. The next step is to go to the dealership and complete a credit application. Capital One will pull your credit report and score to give you an approval. The last procedure is to submit any requested documents and electronically sign the contract to confirm the deal.

Documentation required for the application Copy of your driver's license Proof of residence Evidence of income

Which Bankrate Rates Capital One

Overall score

4

The availability

4

Minimum loan amounts offered by Capital One are fairly middle of the road, however Capital One offers many choices for repayment terms and has wide state availability.

Affordability

3.2

Captial One's minimum and maximal APRs don't exist as of yet, and it doesn't offer a discount for autopay.

Customer experience

4.6

Prequalification rates are valid for 30 days as well. Capital One offers an online chat option once you sign up. The company also offers an app, and customer service is available seven days a week.

Transparency

4

While it does offer prequalification, Captial One doesn't offer a full APR range before you hand over your personal information.

Methodology Bankrate considers 18 data points when rating auto loan lenders. Acceptance criteria, fees and rates are offered and the range of APR all impact lender scores. The scores are divided into 4 categories. The availability of loans as well as repayment options, dealer requirements and availability to state make up this section. Accessibility: This section includes APR ranges and acceptance criteria, as well as fees and discounts. Customer experience: How long you'll need to shop and the availability of customer service, whether there's an app and availability of autopay are all taken care for in this section. Transparency: This category accounts for the accessibility of rates and fees and the availability of prequalification.

Disclosure of author: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely the opinions of the reviewer and have not been reviewed nor accepted by any advertiser. The information that is included, including rates and fees that are included in the review is accurate up to the date of the review. Review the data at the top of this page, and the lender's website for the most up-to-date details.

Written by

Allison Martin

Allison Martin's career began more than 10 years ago as a digital content strategist, and she's since published in numerous prestigious financial media outlets such as The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.

Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping their readers gain the confidence to control their finances by providing clear, well-researched data that breaks otherwise complex subjects into digestible pieces.

Auto loans editor

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Best value cars and SUVs in 2022 Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by offering you interactive tools and financial calculators as well as publishing unique and impartial content. We also allow users to conduct research and compare information for free and help you make financial decisions with confidence. Bankrate has agreements with issuers including, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that are advertised on this website are provided by companies that compensate us. This compensation can affect the way and where products appear on the site, such as, for example, the order in which they may appear within the listing categories and other categories, unless prohibited by law for our mortgage, home equity and other home loan products. However, this compensation will not influence the information we provide, or the reviews you read on this site. We do not consider the entire universe of businesses or financial offerings that could be open to you. xijian/Getty Images

5 min read published May 4, 2022

Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ways and pitfalls of taking out loans to purchase a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are dedicated to helping readers gain the confidence to control their finances with concise, well-studied information that breaks down otherwise complex topics into manageable bites. The Bankrate promise

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who ensure everything we publish ensures that everything we publish is accurate, objective and reliable. We have loans reporters and editors are focused on the areas that consumers are concerned about the most -- the various types of loans available as well as the most favorable rates, the top lenders, ways to pay off debt and much more. So you can feel confident when making a decision about your investment. Integrity of the editing

Bankrate has a strict policy and rigorous policy, so you can rest assured that we're putting your interests first. Our award-winning editors and journalists create honest and accurate content that will help you make the right financial decisions. Our main principles are that we value your trust. Our mission is to provide our readers with reliable and honest information. We have standards for editorial content in place to ensure this happens. Our reporters and editors thoroughly fact-check editorial content to ensure the information you're reading is accurate. We keep a barrier between our advertisers and our editorial team. The editorial team of Editorial Independence Bankrate does not receive compensation directly from our advertisers. Editorial Independence Bankrate's editorial staff writes in the name of YOU - the reader. Our aim is to provide you the best advice to help you make smart financial choices for your own personal finances. We adhere to strict guidelines to ensure that our editorial content is not affected by advertisements. Our editorial team is not paid direct compensation from advertisers, and our content is verified to guarantee its accuracy. So whether you're reading an article or a report it is safe to know that you're receiving reliable and dependable information. How we earn money

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We are constantly striving to provide our readers with the professional guidance and the tools necessary to succeed throughout life's financial journey. Bankrate follows a strict policy, therefore you can be confident that our content is truthful and accurate. Our award-winning editors and journalists provide honest and trustworthy content that will help you make the best financial decisions. The content we create by our editorial team is factual, objective and is not influenced from our advertising. We're honest about the ways we're in a position to provide quality content, competitive rates, and useful tools to you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products andservices or by you clicking on certain hyperlinks on our site. Therefore, this compensation may influence the manner, place and in what order items appear within listing categories and categories, unless it is prohibited by law. We also offer mortgage or home equity products, as well as other products for home loans. Other factors, like our own website rules and whether the product is available in your region or within your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide the most diverse selection of products, Bankrate does not include details about each credit or financial products or services. A new vehicle purchase is one of the largest purchases many Americans make. With the current market , it can feel like a good idea to look at price in order to cut costs. But a low-cost car is not necessarily a good bargain. A car that is cheap could be a burden to you with expenses that pile up during your years of ownership, including increased fuel costs, expensive repairs, and expensive insurance. While you shouldn't purchase the most expensive vehicle to save money, it isn't fiscally wise for most people to pay extra cash to purchase a high-end car that has the most recent options. Instead, research which vehicles that are on the market offer the most worth for the features they provide. This will mean money saved in the long run and a better overall ownership experience. Best sedans While classic cars don't have any of the room that an SUV or midsize car can provide, they are a dependable and traditional choice for drivers of all ages. The top three contenders in the category are ranked by their prices and excellent ratings from experts. The Chevrolet Impala takes the gold award for the cheapest sedans and big cars. It is the top-ranked car according to the 2022 J.D. Power Dependability study. It also holds an almost perfect score in the Kelley Blue Book (KBB). It is renowned for its comfortable ride and huge trunk. The Avalon and Chrysler 300 both receive high scores from Consumer Reports and receive particular recognition for their large interiors. Thanks to Chevrolet Best value sedans

Price

Chevrolet Impala

$31,620

Toyota Avalon

$36,375

Chrysler 300

$32,545

$32,500

Buick LaCrosse

$29,570

The best midsize cars A little increase in size and room from a sedan -- an midsize car has greater trunk space and legroom for both passenger and driver. The best midsize cars have an ideal balance between spaciousness and driving comfort by providing a large interior and an overall size that's nevertheless easily manageable. The Sonata is a winner in this category. the Sonata ranks first with J.D. Power and is well-known for its impressive fuel efficiency. In the middle of the market the Camry comes with driver assistance and excellent technological options. It's also the cheapest on the list The Legacy is a top safety pick and has a high resale price. Thanks to Hyundai Midsize cars with the best value

Price

Hyundai Sonata

$24,150

Toyota Camry

$23,395

Subaru Legacy

$22,995

Honda Accord

$26,120

Kia Optima

$23,400

Best midsize SUVs A midsize SUV offers the best of both in terms of rugged endurance, yet not too large to manage. The scoring of these vehicles proved to be more difficult even though all received excellent marks according to Kelley Blue Book, the Santa Fe beat out the other models due to its fuel efficiency and high-tech features. The Outback was next thanks to its roof, cargo options as well as its an incredibly comfortable riding. In the end, the Murano is rated for its safety rating and robust engine. Thanks to Hyundai The best value midsize SUVs

Price

Hyundai Santa Fe

$27,200

Subaru Outback

$27,145

Nissan Murano

$33,210

Chevrolet Blazer

$33,400

Toyota 4Runner

$37,605

Best minivans The minivan is not only a great vehicle for parents. Modern minivans boast the latest technologies and more space. The best minivan to spend your money takes some consideration in terms of space, reliability and safety. The Sienna dominates the road in the field of top minivans. J.D. Power puts it in the top tier of most efficient minivans, and it is a great efficiency in terms of fuel consumption. The Carnival Odyssey and Odyssey closely follow, with respect to their powertrain handling and practicality, respectively. Courtesy of Toyota Best value minivans

Price

Toyota Sienna

$34,710

Kia Carnival

$33,595

Honda Odyssey

$33,040

Chrysler Pacifica

$38,690

Dodge Grand Caravan

$29,025

The best hybrids and EVs green vehicle market has exploded in the last few years, both in terms of the accessibility and price. Take a look at the top choices and consider a green car loan to finance your purchase with additional discounts. Although hybrids are more expensive, their cost per mile can save cash in the end. Our top-ranked winner Insight, which is our first-place winner Insight is a smooth drive and high miles per gallon. The RAV4 boasts a top Consumer Reports score along with greater space than others in the category. Also, the cheapest option, the Kona is a powerful turbo engine and fun design. Thanks to Toyota Best value hybrids and EVs

Price

Honda Insight

$25,760

Toyota RAV4 Prime

$38,800

Hyundai Kona

$21,300

Kia Niro

$39,090

Nissan Leaf

$27,400

Best small cars Compact cars are renowned for easy commuting and top-notch parking facilities. But the best small cars available have a high fuel efficiency as well as some additional legroom. The winners in this category were chosen based on their dependability scores and comfort of driving. J.D. Power recommends with the Corolla as the most dependable compact choice, alongside KBB and Consumer Reports giving almost perfect scores. Similar to its price, the Elantra has a turbocharged motor addition and a comfortable driving experience. The most affordable model Impreza, which is also the cheapest Impreza, boasts an advanced information system as well as a swift steering. Thanks to Toyota Best value compact cars

Price

Toyota Corolla

$20,175

Hyundai Elantra

$20,200

Subaru Impreza

$18,795

Nissan Sentra

$19,610

Chevrolet Cruze

$18,870

The top SUVs and suburbans larger SUVs have more expensive prices and you pay for what you spend for. The largest vehicles can accommodate up to eight passengers and feature the latest technology. This means that, even though this is generally more costly, you could still garner good value from a pricier alternative. Although it's the most expensive, the Expedition ranks highly in Kelley Blue Book and boasts a 6,000-pound towing capacity. Next, recognized for its spacious interior and a powerful towing capacity The Tahoe is an excellent option for those looking to spend less money. Finally, the Yukon is highly rated by J.D. Power, and offers different trim options. Thanks to Ford Best value SUVs and suburbans

Price

Ford Expedition

$69,150

Chevrolet Tahoe

$50,500

GMC Yukon

$52,500

Chevrolet Suburban

$53,200

Nissan Armada

$49,150

Best brands according to information collected by J.D. Power during its 2022 U.S. Dependability Study, Genesis brand vehicles ranked highest among the top brands, and Kia was ranked first in the mass-market category. While most drivers feel an attraction to one brand over the other, apart from reliability, this rank is scored based on problems per 100 vehicles. Land Rover and Ram rounded off the list by having more than 250 problems per vehicle -two of the most reliable brands available according to J.D. Power. The best brands

Price range

Kia

Between $17,490 and $52,590

Buick

Between $25,595 and $43,995.

Hyundai

$20,200 to $48,740

Toyota

Between $19,925 and $53,050

Methodology Vehicle ranking was based on a combination of industry report findings and the price of the vehicle. This gives a solid idea of the value that each vehicle holds according to industry standards and the price-to-purchase ratio. Particularly, the automobiles are evaluated on a three-point scale that is derived from J.D. Power's 2022 U.S. Vehicle Dependability Study. This study aimed to determine what vehicles in the previous year were the most reliable for drivers. Although not every vehicle that fell in the top five positions was a winner from the study, it was used as a large determining factor. Alongside J.D. Power, Kelley Blue Book's expertise rating based on the scale of five points was used in conjunction with J.D. Power's expert rating. In addition, the five-point scale used by Consumer Reports noting vehicle reliability was added. The resulting factors were evaluated using the cost of each vehicleand selected the top five cars for each type. The final value of a vehicle is based on a range of elements. Are there constant visits to the mechanic, or a poor fuel efficiency? While questions like these are vital when determining which vehicle is right to you -- color, make and model included The best method to choose your car is to look at the cost you're paying and what the cost per drive equals. Make use of these scores when it comes time to buy your next car.

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Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the ins and outs of securely borrowing money to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping their readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down complicated topics into digestible pieces.

Auto loans editor

Other Articles Related to Auto Loans 6 minutes read Sep 23 2022. Auto Loans 3 min read Sep 21 2022 Car Insurance 6 min read Sep 09, 2021 Auto 3 min read March 02 2019,

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Average auto loan payments: What to expect in 2023 Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by offering you interactive tools and financial calculators that provide objective and original content. We also allow you to conduct research and compare information for free to help you make financial decisions with confidence. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that are advertised on this site come from companies that pay us. This compensation may impact how and where products appear on the site, such as such things as the order in which they may appear in the listing categories and other categories, unless prohibited by law. This applies to our loans, mortgages,, and other products for home loans. However, this compensation will not influence the information we publish, or the reviews you see on this site. We do not cover the entire universe of businesses or financial offers that may be open to you. Image Source: Getty Images/Getty Images

4 min read Published on March 7, 2023.

Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers to navigate the details of borrowing money to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping their readers feel confident to manage their finances by providing clear, well-researched facts that break down complicated topics into bite-sized pieces. The Bankrate promise

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At Bankrate we strive to help you make better financial decisions. We adhere to the highest standards of editorial integrity ,

This post could contain the mention of products made by our partners. Here's a brief explanation of how we earn our money . The Bankrate promise

Established in 1976, Bankrate has a long track history of helping people make informed financial decisions.

We've maintained this reputation for over four decades by simplifying the process of financial decision-making

process, and giving people confidence in which actions to take next. process and gives people confidence in the next step.

So you can be sure you can trust us to put your needs first. All of our content was created by and edited by ,

We make sure that everything we publish will ensure that our content is reliable, honest and trustworthy. The loans reporter and editor are focused on the areas that consumers are concerned about the most -- the different types of lending options and the most competitive rates, the best lenders, how to repay debt, and many more. So you can feel confident when investing your money. Editorial integrity

Bankrate adheres to a strict code of conduct , so you can trust that we'll put your needs first. Our award-winning editors and journalists create honest and accurate information to assist you in making the right financial choices. Our main principles are that we respect your confidence. Our goal is to provide readers with accurate and unbiased information. We have editorial standards in place to ensure this happens. Our reporters and editors thoroughly check the accuracy of editorial content to ensure that the information you're reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation by our advertising partners. Editorial Independence Bankrate's team of editors writes for YOU - the reader. Our aim is to provide you the best advice to help you make smart personal finance decisions. We adhere to strict guidelines for ensuring that editorial content isn't in any way influenced by advertising. Our editorial team receives no directly from advertisers, and our content is thoroughly fact-checked to ensure accuracy. Therefore when you read an article or a review, you can trust that you're getting credible and dependable information. How we make money

If you have questions about money. Bankrate has the answers. Our experts have been helping you manage your money for over four years. We continually strive to provide consumers with the expert guidance and the tools necessary to make it through life's financial journey. Bankrate adheres to a strict code of conduct standard of conduct, which means that you can be sure that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial choices. The content we create by our editorial team is objective, truthful and uninfluenced from our advertising. We're open about the ways we're in a position to provide quality information, competitive rates and helpful tools to our customers by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods and services or by you clicking on specific links on our site. This compensation could impact how, where and in what order items appear in listing categories, except where prohibited by law. This is the case for our mortgage, home equity and other products for home loans. Other factors, like our own website rules and whether a product is available in the area you reside in or is within your self-selected credit score range can also impact how and when products are featured on this website. Although we try to offer an array of offers, Bankrate does not include details about each credit or financial item or product. For many Americans, the cost to is one of the biggest hits on their pockets each month outside of housing costs. On average, motorists are spending more than $700 or $500 per month on used and new vehicles in the respective quarters, according to Experian's fourth-quarter . Insurance costs on average $2,014 per year as per . This steep monthly charge comes on top of increases everywhere from the grocery store to the shopping mall. Also, the amount you spend to keep your vehicle on the road is contingent on a number of factors that include your score on credit, to the type of vehicle you pick and your loan duration -- it is not a guarantee that will supply troubles and will increase the cost. Therefore, whether you've got or are considering taking out a current loan it is essential to be aware of typical monthly payments and rates to be confident that you're receiving the best price. Statistics on car payments The average monthly car payment for new automobiles is $716. The average monthly car payment for used cars is $526. 39.5 percent of the vehicles purchased in the 4th quarter of 2022 had brand new vehicles. 60.5 of percent of vehicles that were financed in the quarter that ended in 2022's fourth quarter were brand new vehicles. For those who bought new vehicles by 2022 80.9 were able to fund their vehicle, as opposed to 85.3 per cent for 2021. Credit union financing made up more than 30 percent of auto loans during the same period. The average cost for insurance for cars is approximately 168 dollars per month. The latest loan amounts are up 4.04 per cent in the quarter ending in. SUVs and wagons increased financing share, hitting 60.7 percent during the 4th quarter in 2022. All-in loan balances increased by 8.56 percent over the same time frame.

What is the price of a down payment for a car? One option to cut down on the higher-than-usual vehicle costs creating high monthly costs is to make the amount of . Down payment refers to money you have and any value that is derived from your vehicle trade-in or money from rebates. It will save you money before your financing even begins and improve your standing with lenders. At least 20 percent of an all-new vehicle and 10 if buying used. In the quarter that ended in the fourth quarter of, the average price for a new car was $6,780 new vehicles and $3,921 for second-hand ones, according to . New car buyers received 30 percent more in the beginning of 2021. How much will my car payment be? The average monthly car payment is dependent on more than the cost of the car. It is determined by how much you're financing the car in order to pay off the loan's principal, along with your rates of interest and loan duration. Average

New cars

Cars that are used

Monthly payment

$716

$526

The amount of the loan

$41,445

$27,786

Interest rate

6.07%

10.26%

The term "loan"

69.44 months

68.01 months

The average monthly payment for car loans, until the alternative data movement catches up, they serve as your financial DNA and provides lenders an idea of how risky you are to risk. If you've got strong credit history, you are likely to get offered higher rates that are competitive. And for most, better rates translate to lower monthly installments. Credit score

New cars

Used cars

Source: Experian State of Automotive Finance Market fourth quarter 2022

781-850 (super prime)

$683

$505

661-780 (prime)

$723

$519

601 to 660 (nonprime)

$753

$541

Between 501 and 600 (subprime)

$746

$542

300 to 500 (deep subprime)

$700

$524

Average car loan amount over the last year vehicle prices have increased each month. In January 2023, used vehicles were priced at an average of $27,633 compared to new cars, $49,388 -up from one year ago. The higher prices indicate that motorists were taking out more money to finance their cars. Credit score

New cars

Cars that are used

Source Experian State of Automotive Finance Market fourth quarter 2022

781 to 850 (super prime)

$37,783

$28,183

661-780 (prime)

$43,001

$29,405

601 to 660 (nonprime)

$44,140

$27,719

Between 501 and 600 (subprime)

$40,737

$23,636

300-500 (deep subprime)

$35,234

$20,325

Auto loan rates The key to finding the best rate available is to compare various lenders. Explore lenders online and other traditional options in banking prior to making a decision. Credit score

New cars

Cars that are used

Source Experian State of Automotive Finance Market third quarter 2022

781 to 850 (super prime)

4.75%

5.99%

661-780 (prime)

5.82%

7.83%

601-660 (nonprime)

8.12%

12.08%

From 501 to 600 (subprime)

10.79%

17.46%

300 to 500 (deep subprime)

13.42%

20.62%

Average auto loan terms Most auto loans are offered in increments of 12 months. The most commonly used terms are 24 to 60 months, however 72months and terms of 84 months are becoming more frequent. There isn't a perfect term, and each one is tailored to your needs and budget. A means lower monthly payments however, it will cost more overall. Credit score

New automobiles

Cars that are used

Source: Experian State of Automotive Finance Market fourth quarter 2022

781-850 (super prime)

63.81

65.34

661-780 (prime)

70.99

69.04

601-660 (nonprime)

74.48

69.03

Between 501 and 600 (subprime)

74.02

66.58

300-500 (deep subprime)

73.01

62.95

How do you determine how much your car will cost you In addition to the monthly payment be sure to factor in additional expenses. They include typical expenses like gas, insurance and maintenance. However, you must also set aside funds for unforeseeable accidents -- at least enough to pay your deductible. To figure out this amount prior to of signing a contract for a new vehicle it is necessary to make some estimates. Starting with car maintenance using Edmunds's method to calculate the an average cost for the vehicle you own. Next, add that number to the expected insurance cost. Although not all states require it, the average motorist is expected to shell out about $168 per month. From there, add the estimated cost of fuel. Take your car's average miles per gallon, and the estimated monthly mileage along with the average cost of fuel in your area to get this figure. Also, consider the cost of registration, fees and taxes you'll need to pay, along with the . The bottom line is that even though the available rates for car financing are influenced by a variety of factors outside of your control, there still are options you can choose that put you in the driver's seat when it comes to the purchase of a car. Make sure you compare various rates and increase your credit score to qualify for better rates. This is especially important as consumers will be faced with higher costs all over the board during the next year. The current interest rates are likely to make monthly payments more expensive, so be patient and consider how to cut costs in the .

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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ins and outs of securely taking out loans to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain the confidence to take control of their finances through providing precise, well-researched and well-written facts that break down complex subjects into bite-sized pieces.

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Similar Articles: Auto Loans Read 6 minutes March 02, 2023 Auto Loans 5 minutes read Dec 23. 2022. Auto Loans 3 min read Dec 02 2022 Automobile Loans 3 min read October 20, 2022

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How much car can I manage to afford? How can I determine the affordability of my car? The Part of Buying a Car In this series purchasing a Car

Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by offering interactive financial calculators and tools that provide objective and original content. This allows you to conduct your own research and compare information for free - so that you can make sound financial decisions. Bankrate has agreements with issuers, including but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make money The products that appear on this website are provided by companies that compensate us. This compensation may impact how and where products appear on this site, including for instance, the order in which they may be listed within the categories of listing and other categories, unless prohibited by law for our mortgage or home equity products, as well as other products for home loans. However, this compensation will have no impact on the content we publish or the reviews you read on this site. We do not include the vast array of companies or financial deals that may be open to you.

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4 minutes read. Published November 14, 2022

Written by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the details of using loans to buy a car.

Edited by Helen Wilbers Edited by

Helen Wilbers has been editing for Bankrate since the end of 2022. He believes in transparent reporting that allows readers to confidently get deals and make best decisions for their financials. He specializes in small business and auto loans.

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At Bankrate we strive to help you make better financial choices. We are committed to maintaining strict editorial integrity ,

This article may include references to products from our partners. Here's how we make money .

The Bankrate promise

Founded in 1976, Bankrate has a long track record of helping people make wise financial choices.

We've maintained this reputation for more than 40 years by making financial decisions easy to understand

process and giving customers confidence about the actions they should do next. Bankrate follows a strict ,

So you can be sure you can trust us to put your needs first. All of our content is written with and edited

who ensure everything we publish is objective, accurate and reliable. Our loans reporters and editors focus on the things that consumers care about most -- the various kinds of loans available and the most competitive rates, the most reliable lenders, ways to repay debt, and more -- so you're able to be confident about making your investment.

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Bankrate follows a strict standard of conduct, which means you can be confident that we'll put your needs first. Our award-winning editors and reporters provide honest and trustworthy content that will assist you in making the right financial decisions. The key principles We appreciate your trust. Our goal is to offer readers reliable and honest information, and we have standards for editorial content in place to ensure this happens. Our editors and reporters thoroughly fact-check editorial content to ensure that what you read is accurate. We maintain a firewall between advertisers as well as our editorial staff. Our editorial team doesn't receive any direct payment by our advertising partners. Editorial Independence Bankrate's team of editors writes for YOU - the reader. Our aim is to provide you the best advice to help you make smart personal finance decisions. We adhere to strict guidelines in order to make sure that the content we publish is not affected by advertisements. Our editorial staff receives no any compensation directly from advertisers and all of our content is checked for accuracy to ensure its truthfulness. Therefore, whether you're looking at an article or review, you can be sure that you're getting reliable and reliable information.

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There are money-related questions. Bankrate has answers. Our experts have helped you understand your finances for over four years. We continually strive to provide our readers with the professional advice and tools needed to make it through life's financial journey. Bankrate adheres to strict standards standard of conduct, which means that you can trust that our information is trustworthy and accurate. Our award-winning editors and journalists provide honest and trustworthy content that will help you make the best financial decisions. The content created by our editorial staff is objective, factual, and not influenced from our advertising. We're open about how we are able to bring quality information, competitive rates and practical tools for you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the promotion of sponsored goods and, services, or by you clicking on certain hyperlinks on our website. Therefore, this compensation may impact how, where and in what order products are displayed within the listing categories, with the exception of those the law prohibits it for our mortgage home equity, mortgage and other home loan products. Other elements, such as our own website rules and whether the product is available in your area or at your personal credit score can also impact how and where products appear on this site. We strive to offer the most diverse selection of products, Bankrate does not include information about every financial or credit product or service.

The amount of car you can purchase is contingent upon factors like your income per month, your credit score, and the specifications you'd like your car to include. Experts typically recommend spending no greater than 20 percent take-home earnings on a vehicle. That should include the cost of fuel as well as insurance. In order to determine your affordability, you need to balance the needs of your vehicle with your budget. How to determine how much car you are able to afford? to set a budget for your vehicle begin by determining what you can comfortably pay each month. Remember to include expenses like maintenance, fuel and insurance along with loan or lease payments. 1. Make a decision between leasing and purchasing If you're able to make an impact on the amount you're able to manage to afford. Leasing is a great alternative for those who need a lower monthly payment and the chance to drive the most recent model cars. The payments will cover the car's depreciation instead of the total value. But, you'll still have to put money down -and you'll have to pay for the maintenance of a car that you ultimately will not own. The purchase puts you in the driver's seat , with no limit on mileage and no additional fees for wear and tear. It is more expensive to purchase an automobile than lease it, and it is important to be sure that the depreciation will not leave you . But you'll own the car and have the ability to sell it if needed. Calculate your savings potential. What's affordable is related to how you plan to utilize your vehicle and so you should research the advantages and disadvantages of each one before you decide to purchase. 2. Consider your salary Your salary is the primary factor in deciding which car loan is best for you. It is recommended that the cost of a new car not exceed 15 % of take-home pay. A used car's payment should be no more than 10 percent, though the exact amount varies according to experts. If fuel, insurance and other monthly expenses are included, the cost is not more than 20% of the monthly pay. The amount you earn is important when you're trying to get approved for an loan. The lenders will be looking at your debt-to-income ratio, or . This measure compares your monthly bills to your monthly gross income. Most car dealers like to see an DTI not exceeding 45 or 50 percent before they approve the loan, according to . If you do have the money to buy your vehicle outright however, you must still think about your purchase within the picture of your annual income and other expenses. Particularly, consider the possibility of buying in cash -- and the possibility of eating up or destroying your savings- versus making affordable payments over time. A car loan may not always be the best choice, especially when you are expected to pay more than the suggested amount of your monthly earnings to pay for a loan. For some buyers, financing a car may when balanced as an element of their overall financial plan. 3. Factor in additional vehicle costs Two of the most expensive extra costs associated from owning a car are the cost of the cost of fuel and insurance. It is possible to find mileage estimates for your car of choice. Selecting a vehicle with high gas mileage can reduce your monthly expenses and will help you make the most of the amount of mileage reimbursement from your employer. The cost of insurance varies depending on the type of vehicle and. Two vehicles that appear like yours could be completely different from the insurance company you have. A is a great way to begin understanding the potential insurance cost and the factors the insurance company will take into consideration when determining a price. Typically, companies will evaluate your driving history. How much you use your car. Your location. Your age. Your gender. Your credit. The kind and amount of coverage you selected. The discounts you qualify for. Based on the state that you live in, you may have restrictions on what when you are pricing your insurance. Are you able to afford the car you want? Now that you have an idea about your spending budget you'll be able to determine if the car you've been looking at is within reach -- and whether you'll need financing. The following steps will help determine the financial viability of a particular car or loan. 1. Know how much you'll really be paying for your car loan will include more than the cost of the car on its own. Be aware that you are paying the " " (OTD) cost, which will factor in not only the cost of your vehicle but also taxes, fees and any other add-ons you buy. Through research, you will find out what to expect from the form of state sales taxes, title and vehicle registration fees. Certain fees have to be imposed by laws or company policy, or removal. Being aware of what's available for discussion could save time and frustration when negotiating. With a reasonable OTD cost in your head, you can shoot at a specific sticker price when you are shopping for a vehicle. Know that the OTD cost could add up to 10-15 percent to the price of your vehicle according to the location you live in. 2. You can get an estimate of the cost by using a car loan calculator. The rate of interest you pay for a loan plays a big part in calculating your monthly payment amount. A higher credit score will score you a lower interest rate and, in turn, reduce your monthly payments and the total loan cost. You can use a to figure out how various rates of interest will impact your monthly payment. Here is how: Pull the copy of your credit file, and find out your . Get prequalified with a few lenders to figure out the typical interest rate you might receive. Plug in your rate of interest, desired duration of repayment and vehicle cost into the calculation. This is the second aspect you should consider. A shorter loan term means bigger installments, but less interest overall. Therefore, even though a longer loan term can be tempting but it is best to go with an affordable vehicle so that payments are low. Bankrate insight

Use a car loan calculator to get an idea of what your monthly payments will be prior to completing an automobile loan application.

3. Use a cost-to-own tool Beyond the monthly payment it is important to consider whether you are able to afford maintaining the car. Find a few and then use a cost-to-own tool to estimate the amount you could have to pay. Edmunds and Kelley Blue Book have cost-to-own tools that take into account the expected cost of fuel as well as maintenance repairs, state fees and average depreciation. It is important to be sensible with your budget will ensure that you don't spend your money once you have brought your new vehicle home. Before choosing a vehicle take into consideration all costs that could be incurred and not just the monthly installment. Try to find a vehicle that is priced at least 20 percent of your take-home pay. The objective is to find a car that is able to meet your needs and leaves you with money to cover unexpected costs or changes in income.

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Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the details of borrowing money to purchase an automobile.

Edited by Helen Wilbers Edited by

Helen Wilbers has been editing for Bankrate since the end of 2022. He values clear reporting that helps readers successfully find deals and make the most appropriate choices regarding their finances. He specializes in auto and small business loans.

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(image: http://www.imageafter.com/image.php?image=b21dario048.jpg&dl=1)Car loan additions are they worth the cost? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by offering you interactive financial calculators and tools as well as publishing objective and original content, by enabling users to conduct research and compare information at no cost - so that you can make sound financial decisions. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this site come from companies who pay us. This compensation can affect the way and when products are featured on this site, including, for example, the sequence in which they be listed within the categories of listing in the event that they are not permitted by law for our mortgage home equity, mortgage and other home loan products. This compensation, however, does not influence the information we publish, or the reviews you see on this site. We do not cover the universe of companies or financial offerings that could be open to you. Share: Maskot/Getty Images

5 min read published September 27, 2022

Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the details of borrowing money to buy a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain confidence to control their finances by providing concise, well-researched and precise facts that break down complicated topics into bite-sized pieces. The Bankrate promises

More information

At Bankrate we aim to help you make smarter financial decisions. While we are committed to strict editorial integrity ,

This article may include the mention of products made by our partners. Here's an explanation for how we earn our money . The Bankrate promise

Established in 1976, Bankrate has a long track history of helping people make smart financial choices.

We've earned this name for more than four decades through making financial decisions easy to understand

process and giving people confidence about the actions they should follow next. process and gives people confidence in the next step.

so you can trust you can trust us to put your needs first. All of our content is created with and edited ,

who ensure everything we publish ensures that everything we publish is accurate, objective and reliable. Our loans journalists and editors focus on the areas that consumers are concerned about the most -- the various types of loans available, the best rates, the top lenders, how to repay debt, and many more. So you can feel confident when making a decision about your investment. Integrity of the editing

Bankrate follows a strict and rigorous policy, so you can rest assured that we're putting your interests first. Our award-winning editors and reporters provide honest and trustworthy content to aid you in making the best financial choices. The key principles We appreciate your trust. Our aim is to provide our readers with accurate and unbiased information, and we have standards for editorial content in place to ensure that this happens. Our reporters and editors thoroughly check the accuracy of editorial content to ensure that the information you're reading is true. We have a strict separation between advertisers as well as our editorial staff. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence Bankrate's editorial staff writes in the name of YOU the reader. Our aim is to provide you the best advice to help you make smart financial choices for your own personal finances. We adhere to strict guidelines in order to ensure that our editorial content isn't influenced by advertisers. Our editorial staff receives no directly from advertisers, and our content is checked for accuracy to ensure its truthfulness. Therefore, whether you're reading an article or a review it is safe to know that you're getting credible and dependable information. How we earn money

You have money questions. Bankrate has the answers. Our experts have been helping you manage your money for more than four decades. We continually strive to give our customers the right guidance and the tools necessary to make it through life's financial journey. Bankrate follows a strict policy, which means you can be confident that our information is trustworthy and reliable. Our award-winning editors, reporters and editors create honest and accurate content to help you make the right financial decisions. The content we create by our editorial team is objective, factual and uninfluenced by our advertisers. We're honest about the ways we're able to bring quality content, competitive rates and helpful tools to our customers by revealing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products and, services, or by you clicking on specific links that are posted on our website. This compensation could affect the way, location and when products are listed, except where prohibited by law. We also offer mortgage or home equity products, as well as other products for home loans. Other factors, like our own website rules and whether the product is available in your area or at your personal credit score could also affect how and where products appear on this site. While we strive to provide an array of offers, Bankrate does not include information about every credit or financial item or product. Dealer add-ons can be a way to convince customers to spend more than intended. You'll be charged interest on any add-ons that are included within your loan. Remember that even though you'll be presented with many choices of packages, you can decline any of them. Also, you can choose to use these car services individually if you want just one. And later, you can end any service if you decide to not need them. 1. Gap insurance Insurance that covers what you owe and what the value of your car is. If your car is destroyed or stolen, gap insurance will aid in breaking even on expenses. It's a wise investment if you are -- in the event that it's not included as part of the lease contract. It could also be worth the cost when you're getting a car loan that is greater than what the vehicle is worth. This is the case when the balance of your previous car loan is added to the payment on your new car. It is advisable to study the costs of gap insurance using other sources to can determine if the dealer offers the most competitive cost. Is gap insurance worth it? It is worthwhile to purchase gap insurance it if at a fast rate. The insurance will safeguard you from having to pay the difference between the value of your car and what you owe if your vehicle is declared a total loss. But you should examine gap insurance prior to making a decision to purchase it. Banks, credit unions , and third-party sellers all provide gap insurance. You never need to purchase gap insurance from a broker, and if you find an alternative that is cheaper, you'll have the protection without the dealer markup. 2. VIN engraving VIN etching involves engraving your vehicle identification number on your car's windshield and windows. It makes your car easily identified and therefore more difficult for thieves to steal, and possibly easier to locate if stolen. While they may offer discounts to drivers who have this add-on, you can do it yourself and save a few dollars. What is the best option? VIN Etching worth the cost? This add-on is not worth it. You can get this completed at the detail shop in the future or make it yourself using an online kit for as cheaply as $20. 3. Extended warranties are added when the manufacturer's warranty has expired, but generally will cover less. They are often more expensive than the most common repairs, especially when combined with your auto loan. are usually lumped in with extended warranties, and can involve purchasing scheduled maintenance checks. The cost of a maintenance plan is generally included in the monthly payment for your car. Are extended warranties worth the expense? Extended warranties can only be beneficial in the event that you plan to keep the vehicle for a long time beyond the manufacturer's warranty -- and even then , it's not always the best choice. Go through Kelley Blue Book and Edmunds for expected repair costs and compare them to the extended warranty provided by the dealer. If you could reasonably save money for repairs when you own the car, an extended warranty could be an unnecessary expense. The service plan is useful if you plan to use the dealership for maintenance and you can accept maintenance being performed in a lesser frequency than the manufacturer recommends. If you choose to buy one of these options, make sure you research them from different sources. It is possible to search around to find the best price. Also, there is no requirement to sign up for a dealer's extended warranty to buy a car. 4. Wheel and tire protection They can be expensive. Dealers provide tire and wheel protection to pay for replacing the tires and rims if potholes, nails or curbs damage them. However, the majority of tires have their own warranty. If there are any issues, you will likely still be okay without tire and wheel protection. Is tire and wheel protection worth the cost? This add-on depends on your driving style. If you live in an area that is known for its rough roads, looking into the additional security could be advantageous. There are likely to be lower-cost options with the same amount of coverage outside the dealership. 5. Protection for fabric and paint This is exactly what it sounds like A coating added by dealers can put on your vehicle's interior and exterior to shield it from harm. Some manufacturers incorporate this feature in new cars, so check before double-dipping on this add-on. What is the value of fabric and paint protection? worth it? Paint and fabric protection are generally not worthwhile add-ons. While keeping your brand new vehicle in good condition is important however, you can get the same results from a trip to your neighborhood hardware shop. You could save money by doing it yourself. 6. Key protection depends on your car's key and fob models, changing one or the other can be pricey. However, the added cost of key protection provided by a particular manufacturer could be more expensive than replacing the key yourself. If you choose to use key protection, you can evaluate the dealer's offer against alternatives offered through your insurer. It is also possible to invest in technology like Tile to help you locate your keys if they are lost. Is key protection worth it? The add-on does not merit the extra cost. You are able to easily change your key if you lose it. Do not be swayed by dealers who focus on the cutting-edge technology keys are now equipped with. 7. Insurance for credit This feature is designed to assist you in attempting to pay off your auto loan even if you're unable to. It only activates in certain scenarios -- like unemployment, disability, or death. In contrast to a compensation for you, it's solely for lender. You aren't required to buy credit insurance to finance or purchase an automobile and so, don't let salespersons insist on selling you to buy. Is credit insurance worth the price? Credit insurance can seem useful in an emergencysituation, however it can be more costly than establishing the rainy day fund. Additionally, you might be able to find credits insurance from a third party at a cheaper rate. In some cases, the insurance you already have might be sufficient to cover your expenses with no additional cost. Keep in mind that you can say no dealer will often provide add-ons as part of a package, rather than stand-alone items. This method -- which is designed to make more sales -is usually advertised as the "protection bundle." It's typically offered in levels like bronze, silver and gold. Also known in the industry as "menu selling" the method makes it simpler for dealers to ensure the salesperson presents all the . The strategy may create a feeling for the customer as if these packages are not optional even though they are. Keep in mind that any extras you choose to add to your loan will result in interest. Be aware of the additional cost in your mind can help you remain solid when . How do you cancel dealer add-ons Since each additional service described above is optional, you should be capable of cancelling them in most situations. Examine the contract you signed. Examine the time limit and cancellation procedures. You might have to send or fax the documentation in order to receive a refund or rebate. Skip the dealership if you are able to. Instead, visit the service company and cancel with them directly. This is the most efficient method for if it's more than a few days since you bought the car. Keep notes and documents on the process. Cancelling add-ons can be a bit complex and stressful, so write everything down after you have completed each step. Stay on top of the cash. It may take weeks for your refund rebate check to be received. If it doesn't, follow up and ask when you can expect your contract to be canceled and then refunded. If you financed any add-ons via your loan however, you may not receive any refunds on the interest that you've already paid. But, you'll be able to request that the added-on removed from your loan and receive a refund on the amount you haven't yet paid. The bottom line: Vehicle purchases can add up to a higher number than that stated on the car's window. However, a smart buyer can save money by avoiding costly, unnecessary accessories. Only buy add-ons that you believe are actually worth the cost and don't spend more than you plan to. Related Articles

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Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the ins and outs of securely taking out loans to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain confidence to manage their finances through providing precise, well-studied information that breaks down otherwise complex subjects into bite-sized pieces.

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