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Automobile Loan Refinancing Guide The decision to refinance your auto loan involves study and preparation. The first step is determining whether your objective is to walk away with more favorable rates and terms, or reduce your monthly payments. In any case, refinancing is simply replacing your existing loan with a new one.

This guide outlines the ins and outs of refinancing your automobile loan beginning with the details of the steps to follow, the benefits and drawbacks and the fundamental prerequisites.

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 with the details of borrowing money to buy a car. Written 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 gain the confidence to manage their finances through providing concise, well-studied information that break down complex subjects into bite-sized pieces.

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Refinance your loan The first step when refinancing your auto loan will be to determine if this is the right choice for you financially. The main two scenarios that refinancing could be a good idea are when you are able to take home a lower rate or are having difficulty making your payments. To decide if it is the right option, you should examine the current loan. It's best to and compare potential savings against what you pay for your existing finance. Also, consider your credit score, to ensure that you can ultimately get a better loan. Be aware that if your credit score is at the same spot as when you signed the loan -or even worse, less refinancing may not be beneficial to you. RECOMMENDED ARTICLES

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The refinance process likely to be like the process you went through when you were applying for your initial loan. After at three or more lenders you can choose the one that best fits your needs. The majority of lenders permit online applications, however you'll likely need to submit an examination of your credit before acceptance. This could reduce your score a bit. Pay attention to the data factors that the lender carries when it comes to mileage, vehicle type, time you've had the loan and your remaining loan balance. Additionally it's a good idea to get your documents in order prior to of applying. This includes information about your car -- as well as information regarding your previous loan that you wouldn't need for your initial loan application. Suggested ARTICLES

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Finally, you will get your new auto loan. Now, you can pay off your old loan and begin making payments on your new one. The process will differ based on the lender, but you will either receive payment or it will be sent directly to the previous lender. In either case, it's important to verify that this procedure was completed prior to halting payments on your old loan so that you don't end in the middle of penalties for late payments or other fees. Recommended ARTICLES

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PROS Monthly payments less expensive

Possibility of paying off the loan sooner

Lower interest rates, CONS charges

More documentation

It is possible to extend your loan Is auto refinancing right for you? Refinancing your auto is the best option if you're looking to save money, specifically on incurred interest -- or if you require relief but aren't able to get . However, due to the high inflation, determining whether it's the right choice for you will require additional consideration. There are many reasons to think about refinancing your vehicle loan Your credit rating has improved Credit score serves as the primary goal post for the rates lenders will give you. If your credit score has improved since you first approved your loan, it could be worth your while to refinance to get better rates. Reduce your monthly payments If you're currently paying for a loan is burdening your finances and you're at risk of not being able to pay your bill then refinancing might be a viable alternative. Be aware of the amount you can extend your loan timeframe, as the longer it is the higher your interest over the life of your loan. The interest rates have slowed down, however this isn't the case at present due to the Federal Reserve's moves to reduce inflation, refinancing is a good idea in the event that interest rates have decreased. Check the current interest rates to decide whether refinancing is an appropriate move. You're a dealer if you initially signed up to terms for financing by dealer, it is likely that you did not receive the most favorable conditions. Check around to lock in more competitive rates. Requirements to refinance an automobile loan Each lender has its own eligibility criteria in relation to auto refinance loans. There are some requirements you will likely run into.

Resting loan balance Every lender holds different regulations for loan amounts but in the event that you have a small amount left, or even more, lenders may stray away. Typical minimums to refinance fall around $3,000 while maximums are usually under $50,000. The remaining time on a loan Depends on your position in the term of your loan refinancing may not be feasible. Most lenders expect you to be minimum six months into your loan and have at least six months remaining. On the other hand, if you're far into the loan it could be better to pay it off rather before attempting to refinance it. Credit score The better your credit score higher, the better rates you will receive. Therefore, while the perfect credit score isn't an absolute requirement, anything that is below 600 likely will not give you a better rate -- and may cost you more. The model year and the mileage of your vehicle. The majority of lenders don't allow refinancing vehicles more than 10 years old. On top of vehicle age and model year, if your vehicle has been driving a lot of miles lenders may stray away. The range of 100,000 to 150,000 miles are common. Debt-to-income ratio . The ideal number varies by lender, but you usually prefer less than 50 percent. Your debt-to income (DTI) proportion is the ratio between your income and the amount of debt. It is recommended to use a in order to find your DTI prior to applying. It is best to utilize a that will do all the work for you. Once you have a handle of how much you can potentially save you begin your refinance process.

How do you determine the savings from auto refinance to estimate the savings you could get from refinancing your auto loan you'll need to look at the comparison of your current loan with the new one. It's not as easy by looking at two monthly payments Instead, you need to factor in how total interest is accounted for. How to refinance your auto loan 1. Shop to find a prequalification and shop around for 3 loans After review of your current loan, compare a few different types of lenders. Be aware of the available interest rates and requirements as they vary by lender. 2. Gather the relevant documents following the preapproval, it is recommended to get your documents in order prior to beginning to apply. Make sure you have details regarding your vehicle as well as your financial situation and the first loan. 3. Make an application for the best offer The lender you choose will have a step by step process you can follow to complete your application. Based on the lender, you could receive a response as fast as a few minutes. The basics of auto refinance

Should you refinance your auto loan in the event of bad credit? While it is feasible to refinance you loan even if you're in bad credit poor credit, it is not the most beneficial financial choice. One way you can receive improved terms through refi is to have improved credit as well. Instead, you should think about a loan change or .

What is the difference between loan refinance and modification? Modification of loan, as the name implies, modifies the current loan to better rates or to delay payments while refinancing ends with completely new loan. Should you extend the loan term? Although it's not necessarily negative or harmful to take a , a longer-term loan can be riskier. The main risk is that you could end up " " as well as "underwater" in your loan for a longer period. This happens if you are owed more than your vehicle is worth. Does refinancing hurt your credit? This process could result in a dip in your credit score due to the fact that applying for a loan will result in a credit pull. On top of that the score could drop due to the added account. However, this is only going to cause minor drops , and will likely help your credit in the long run -- especially if you are struggling to pay your current loan. Does refinance start your loan over? While yes, it can, it's not a great way to begin a new chapter. The ideal scenario is that your new terms will be more reasonable, making it easier to begin fresh. After your previous loan is cleared, the previous installments will not carry over.

Do you require cash to pay off a car loan? Some lenders do require you to put money down, usually for people with poor credit. Therefore, cash is not necessary but can help lower the amount you pay. What should you think about after refinancing your vehicle? Even though you're able to breathe easy with a new and improved loan in your pocket but there are still some important . These considerations will ensure you stay on top of your new loan. Finish up payments on your prior loan. Until you get approval from your prior lender it is crucial to keep making the payments on your loan. If an issue arises and you are overpaid, the lender will likely refund the excess amount to you. When you get the fresh loan either you or your lender will be responsible for the final loan payment. Be sure to consult in with the lender in order to stay clear of any additional fees. Pay off the new loan. The payment schedules differ for each lender but generally, you'll need to begin making payments 30 days after accepting the loan. It is wise to make automatic payments if it is accessible to avoid missing payments. Along with this don't put off the payment in order to avoid accruing interest. If you feel yourself in a difficult spot, contact your lender and discuss the issue before it's too late.

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How to lease a car with no credit history Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by providing you with interactive financial calculators and financial tools, publishing original and objective content. We also allow you to conduct your own research and to compare information at no cost to help you make financial decisions with confidence. 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 products that are advertised on this site come from companies that compensate 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 for our mortgage, home equity and other products for home loans. But this compensation does affect the information we provide, or the reviews you read on this site. We do not include the entire universe of businesses or financial offerings that could be open to you.

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3 minutes read Read published March 03, 2023.

Written by Cheryl Knight Written by Cheryl Knight

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The edit was done 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 take control of their finances with concise, well-studied information that dissects complex subjects into digestible pieces.

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If you have bad credit or no credit even exists as a major obstacle when it comes to leasing a car. However, there are many other alternatives to getting into a new car -- even if you have less than perfect credit history. You could return to the road by agreeing to a larger down payment, finding a co-signer or the transfer of a lease. The impact that credit has on leases While no credit score, or a low one, isn't necessarily a reason to stop the possibility of leasing, it may necessitate a greater down payment, or greater monthly payments overall. This is mostly due to the higher rates of interest that leasees with lower credit score qualify for. The average credit score for those leasing new vehicles reached 734 during the quarter-fourth of 2022, a two-point increase from the three-quarter period of the year 2021 according to . This score is in the primary category, ranging from 661 to 780. Three options to get a lease with no credit beginning your journey and do not have a credit history, there are some alternatives to help you obtain a lease on a car. In addition, once you do get your lease in place, payments help you establish credit. When you next lease you could get a better interest rate and pay less. 1. A larger down payment in addition, it can reduce the total cost of the lease over its term, and thus your monthly payments, the willingness to pay extra on a down payment could aid in obtaining a better credit score for the lease. "Without having any history of credit, you should be prepared to pay more down payment and a higher interest rate than average as your lease will be considered to be more risky," says Steve Sexton, financial consultant and CEO at Sexton Advisory Group. 2. Get a co-signer Another alternative for obtaining an unpaid lease involves obtaining the co-signer. A co-signer with a valid qualification, who needs to be able to demonstrate good or excellent credit will assume the obligation of paying the lease in case you can't. Co-signing provides a guarantee to the lender that the loan will be paid regardless of your credit historyor absence of it. "Having a co-signer with good to excellent credit helps to minimize the overall risk as the cosigner is responsible for paying the lease's monthly payments in case you aren't able to," says Sexton. To improve the odds that this method will be successful co-signers should be able to show a minimum credit score of 670 or higher Sexton says. Sexton. Keep in mind that skipping payments could cause problems for both your co-signer and yourself. 3. Take over another lease Taking the lease of an old one is one last method to obtain a lease with no credit. Instead of approaching the leasing company directly, you approach a leaseholder to inquire about . Although the car company conducts a credit check however, lenders are more likely to work with you since taking over a lease usually occurs when the other person is at risk of default. "Taking over a car lease increases the chance of leasing a vehicle with no credit , as it helps reduce risk for lenders," says Sexton. lender," says Sexton. "There's also the possibility that you could save cash on a car lease in the end by using this method because when you take over the lease of another leasee, you can gain from what they've put down on the vehicle." There could also be incentives offered that can make the process of taking over a lease more appealing such as having transfer costs included. In the end, even with no credit history it's possible to lease the car. Be sure to boost your odds of approval before going into the dealers. You can improve your odds of getting granted a lease through saving the money for a bigger down payment, finding someone who has a well-established credit score who will be willing to co-signer or take over the lease of a friend or relative. If neither of the above options are working, you can start working on building your credit profile and then reapplying at a future date. Learn more

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If you have questions about money. Bankrate has the answers. Our experts have been helping you manage your money for over four years. We strive to continuously give our customers the right advice and tools needed to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct , therefore you can be confident that our content is truthful and precise. Our award-winning editors and journalists create honest and accurate content to help you make the right financial decisions. The content we create by our editorial staff is objective, factual, and not influenced by our advertisers. We're transparent regarding how we're able to bring quality content, competitive rates, and useful tools to you , 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 or services, or by you clicking on certain hyperlinks on our site. So, this compensation can impact how, where and when products appear within listing categories, except where prohibited by law for our mortgage, home equity and other products for home loans. Other factors, such as our own website rules and whether the product is offered in your area or at your personal credit score could also affect the manner in which products are featured on this site. We strive to offer the most diverse selection of products, Bankrate does not include the details of every credit or financial product or service. One-in-four new car buyers are now considering buying a hybrid or electric vehicle similar to gasoline-powered vehicles According to (KBB). Making the switch to electric vehicles -- or any alternative fuel vehicle -- can prove to be worthwhile for both your wallet as well as the environment. But before setting out to the dealership it is wise to electric vehicle options and know the difference in cost of ownership. What exactly is an electric vehicle? The EV market has been growing in popularity over recent years particularly as awareness of climate issues continues to grow. This, along with the high cost of gas has led to drivers looking to save money by going electric. In contrast to the gas-powered cars that are commonly that line the highways and parking areas, EVs have a motor powered by batteries. There are three types of electric vehicle. Hybrid electric vehicles (HEVs) Powered by both an electric motor and an internal combustion engine HEVs have the power of a gas-powered traditional vehicle and the benefits of improved efficiency in fuel consumption. It is not possible to charge an HEV like some of its EV counterparts but rather batteries are charged via the engine. There are many varieties of brands and models of HEVs that are available for sale. A few of the top choices according to KBB include those like the Honda Accord Hybrid, the Toyota RAV4 Hybrid and the Hyundai Elantra Hybrid. Plug-in hybrid electric vehicles (PHEVs) Plug-in hybrids is just as it sounds, a hybrid vehicle that you plug in to charge. It is powered by a battery pack inside the vehicle and charged through an external cable. PHEVs also use another fuel, usually gasoline to power an internal combustion engine (ICE). The vehicle makes use of electricity until it is spent and then taps into the ICE capabilities. The options for PHEVs are smaller, but KBBs standout options are that of Ford Escape SE Plug-in Hybrid, the Hyundai Tucson Plug-in Hybrid and the Kia Niro Plug-in Hybrid. Full electric cars (EVs) The fully electric vehicle increases the quality and is powered completely by an electric motorwithout ICE or an alternative fuel source involved. These have a battery pack that powers the vehicle and is charged in the same method to PHEVs. Electric vehicles are charged using a specialized outlet. While charging stations can be located in the local area, it is crucial to consider the additional expense for a station to charge, if you are you are considering an all-electric. KBB's top fully electric options include those like the Chevrolet Bolt EV, the Nissan Leaf and the Ford Mustang Mach-E. Cost of electric vs. gas cars Before diving in the deep end of electric and hybrid cars it is crucial to comprehend the cost differences between electric and gas. While driving an EV can come with less overall cost but the initial price can still serve as an obstacle for many. Recently, purchasing a brand new car can be expensive no matter what the power source. July 2022 saw record-breaking average transaction prices for new cars of more than $48,000, as reported by . However, the cost for an EV is still more expensive than a gas-powered option. The KBB estimate for an EV is over $60,000 -that's in line with an average luxury vehicle price tag. But it is forecasted the EV market to reach forty percent in 2031, according to . This estimate is backed by the increased number of vehicles that are entering the market. And, fortunately, this rise in EV availability acts as an opportunity to equalize. When more consumers are looking into purchasing electric cars and electric cars, the cost of them will go down. This growth is already clear in the variety of new models entering the market. In the first quarter of 2022, 4.64 percent of all new vehicle registrations were EVs, and 7.18 per cent were hybrid vehicles, according to Experian's report on the automotive market trends. This resulted in 60.4 percent growth for EVs over one quarter in 2022, and a 10.7 percent growth for hybrids. Cost of owning electric vehicles vs. gas-powered cars Although the upfront cost of the next car is crucial, it is also important to consider the costs involved in maintaining and keep the car for the course of its ownership. Look at the five-year cost-to-own comparision for two popular cars, according to Edmunds. The first, 2022 Chevrolet Bolt EV, comes in at $31,955 MSRP . It offers a wide space, a spacious cabin and a well-rated handling. The secondmodel, 2022's Mazda 3, is a well-known gas-powered model with a lower MSRP of $24,115. Both offer a premium interior as well as a smooth ride. an engine that is turbocharged. Take into consideration how the costs accrued over five years of vehicle ownership will affect the type of vehicle you would prefer. 2022 Chevrolet Bolt EV

2022 Mazda 3

Vehicle depreciation

$8,767

$6,700

Taxes and fees

$2,603

$1,814

Financing

$2,921

$2,309

Fuel

$2,283

$11,255

Insurance

$5,411

$3,941

Repairs

$731

$666

Maintenance

$2,806

$4,592

True cost to own

$25,522

$31,277 Fuel On a basic scale, driving an electric vehicle will mean that there will be no need to fill up at gasoline stations. A study conducted in 2020 discovered that EV owners will spend on average 60% less to fuel their vehicles. The price difference for gasoline between Chevy and the Mazda is even steeper than the average. However, getting power for your EV is not easy as simply choosing standard, midgrade or premium. Electric vehicle charging can be broken down into three choices that have different benefits and costs. The first option is charging at a level one. It is by far the most common method of charging and is available through the same outlet you charge your phone with. They are the slowest charging option and provide up to five and two miles charge per hour. Level two charging. These chargers, typically installed in garages, use the same power as your washing machine. You could get between 10 and 20 miles of charge in an hour. Level three charging. Also called DC charging They are available in public spaces. They're the most efficient method and motorists can receive an 80 percent charge within 20 minutes. Just as running your washing machine several times in a row will cost you more electricity, the additional cost incurred from charging at home can be significant. The ongoing expense is added to the initial cost to install an at-home charger that can vary between $300 and $50,000, dependent on the capacity of charge. But keep in mind that many communities are now equipped with chargers, so you may not be required to pay for installation immediately. Take a look at the free map of EV stations to see chargers in your region. Financing Although you can -gasoline or electric powered -- simply apply online or in person to some lenders before settling on the best option, financing a green vehicle can provide some added perks. These loans are available to those looking to finance an electric car. These kinds of loans are typically found through a credit union , and typically offer lower rates of interest than conventional auto loans. You could also be eligible for a financial incentive which is offered in certain states in the U.S. You can benefit by a credit of up to $7,500, depending on the state in which you reside. Insurance Insuring your vehicle is a vital part of ownership that protects yourself along with your passengers. carries the same approach that you'd take to protect the standard vehicle options. It will cover the bodily injury, collision, insurance coverage, and liability. As with all vehicles the price you pay will depend on various variables. However, insurance for an EV will typically cost more than conventional gas-powered alternatives. One reason could be the price of the vehicle's parts. An accident of a minor nature could cause, for instance in the requirement to replace a battery pack -- which can be priced at upwards of $15,000. Bankrate examined 12 car models provided by Quadrant Information Serves and found that, on average premiums are more expensive for electric cars. This is demonstrated by the increased insurance cost forecast for Bolt over the Mazda 3. Bolt in comparison to the Mazda 3. The pros as well as cons for electric cars electric vehicles may provide a drive which is healthier for the planet and your wallet over the long term however, they're not without disadvantages. The advantages of electric vehicles Some advantages of driving an electric vehicle include less maintenance. Electric cars need fewer trips to the mechanic, which means savings on expenses for oil change and brake system inspections. A lower cost for the life of the vehicle. Car ownership can be costly, but EVs come with a lower cost. They are better for the environment. They do not release pollutants from the tailpipe and are therefore better for local air quality and overall carbon dioxide emissions. Modern technology is available. A lot of the latest electric cars include advanced control panels and mobile applications to manage and monitor the vehicle. There are cons to electric cars. Some drawbacks that come with driving an EV include: higher cost of purchase. In the average, purchasing an EV comes with a higher initial cost, which is close to $12,000 more, based on KBB's July 20, 2022 average transactions prices. Range anxiety. Charging stations are often few and far in certain locations, leaving drivers stressed while searching for a location to charge their power. Faster vehicle depreciation. Battery deterioration and vehicle incentives create quick value loss when it comes to electric cars. Cost of installing a charging station. If you prefer the convenience of the convenience of charging in your home installation can cost up to $50,000. Are electric cars the right choice for you? If your next set wheels should be electric should be considered in the same way that you'd choose which model or style of a classic car is best for you.take into consideration your lifestyle and preferences. If your commute fits with the range that and the range of options an electric vehicle offers, or if you prefer the sleek style and environmental benefits, then an EV might be the best option. But if jumping into an all-electric EV is too big of a financial investment, you may want to consider , or opt for the hybrid or plug-in option if you're set on buying. Hybrids and PHEVs typically cost less upfront and still provide the savings advantages that an electric car does. Take note of these key aspects when you are shopping to make sure that the EV is worth investing in. The vehicle range If you're on a long commute to work and don't have access to chargers along the way and at the point you want to go, take into consideration the range of the new vehicle you're considering purchasing. The battery's range of use can differ greatly based on the type of car. Make sure that you don't purchase a car that isn't able to easily charge for your daily outings. Chargers available before heading to the dealership to browse, check for access to charging stations in your region or think about the expense of installing and maintaining an in-home charging station. This is a way of weighing the levels one, two and three options based on your requirements. Your lifestyle It is not only important to consider your way of life in terms of style but also as a terms of its function. Electric vehicles operate in a different way from what you are familiar with. Due to its reliance on regenerative braking, for example, you can expect a slower brake but a smoother overall drive. The bottom line The true price of owning an EV is less than a gasoline-powered vehicle. Even with a higher rate of depreciation as well as higher insurance costs and financing, the less maintenance costs and the five-year time frame for owning an EV is a good option. As a car buyer it is crucial to determine which costs matter the most to you and if EV will fit into your lifestyle. FAQs What is the time it takes to take to charge an electric car? Based on the size of your car's battery, charging can take as few as 30 minutes or 12 hours. It is recommended to recharge your electric car by smaller portions instead of all at once to reduce the charge time. How much does it cost for charging an electric vehicle? The exact cost to charge will vary by location due to varying electric costs, the charge is determined by the range of available options and the price per Kilowatt (kWh). In California for instance electric power is typically 18 cents for every kWh, which means that an electric car with a range of 150 miles would fall somewhere around $7 for a full charge. How long will battery packs for electric vehicles last? Batteries found in an EV will last between 10 to 20 years, until they are in need of a replacement.

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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the details of borrowing money to buy a car. 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 readers gain confidence to control their finances with concise, well-researched and well-organized information that breaks down otherwise complex topics into manageable bites.

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Is an extended car warranty worth the cost? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial choices by providing you with interactive tools and financial calculators as well as publishing objective and original content. We also allow you to conduct research and compare data for free to help you 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 website are provided by companies that pay us. This compensation can affect the way and where products appear on this website, for example, for example, the order in which they be listed within the categories of listing, except where prohibited by law for our mortgage, home equity and other home loan products. However, this compensation will affect the information we publish, or the reviews you see on this site. We do not cover the universe of companies or financial deals that might be available to you. Aaron Greene/Getty Images

3 min read Published November 28th, 2022.

Jackie Lam Written Jackie Lam Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans. 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 committed to helping readers to control their finances by providing precise, well-studied and well-researched data that breaks down otherwise complex subjects into bite-sized pieces. The Bankrate guarantee

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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 best rates, the top lenders, the best ways to repay debt, and more . This means you'll be able to feel secure when investing your money. Integrity of the editing

Bankrate has a strict policy and rigorous policy, so you can rest assured that we'll put your needs first. Our award-winning editors and journalists provide honest and trustworthy content to aid you in making the best financial decisions. The key principles We value your trust. Our mission is to provide our readers with reliable and honest information. We have editorial standards in place to ensure that happens. Our reporters and editors thoroughly fact-check editorial content to ensure that the information you're reading is accurate. We have a strict separation with our advertising partners and the editorial team. Our editorial team does not receive compensation directly from our advertisers. Editorial Independence Bankrate's team of editors writes for YOU - the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We adhere to rigorous guidelines that ensure our content is not in any way influenced by advertising. Our editorial staff receives no any compensation directly from advertisers and our content is fact-checked to ensure accuracy. Therefore, whether you're reading an article or a report you can be sure that you're receiving reliable and reliable information. How we make money

You have money questions. Bankrate can help. Our experts have been helping you manage your money for over four decades. We strive to continuously give our customers the right guidance and tools required to succeed throughout life's financial journey. Bankrate adheres to strict standards policy, which means you can be confident that our information is trustworthy and reliable. Our award-winning editors, reporters and editors provide honest and trustworthy content that will help you make the best financial choices. Our content produced by our editorial team is objective, factual and uninfluenced through our sponsors. We're honest about how we are capable of bringing high-quality content, competitive rates and useful tools to our customers by describing 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 through you clicking certain hyperlinks on our site. Therefore, this compensation may influence the manner, place and in what order items appear within listing categories, except where prohibited by law. This is the case for our mortgage or home equity products, as well as other home loan products. Other elements, such as our own proprietary website rules and whether or not a product is available within your region or within your own personal credit score could also affect the way and place products are listed on this site. Although we try to offer the most diverse selection of products, Bankrate does not include information about each credit or financial service or product. A longer-term car warranty could safeguard you from financial pressure in the event that your vehicle needs emergency repairs. What is the best way to determine if an extended warranty worth the cost? This largely depends on the details of the warranty and your needs. What is the price of an extended car warranty cost? When considering extended car warranties price is the primary element. Extended warranties range in price, averaging between every year. The cost is contingent on several factors like: The supplier. What is covered in the warranty you have. The make, model and year of your vehicle. The miles your car travels. Where you live and how often you drive. The cost of replacing parts and labor. Discounts you are eligible for. Other aspects that affect the price of an extended warranty include the length of coverage, the amount of coverage, and the deductible. The higher your deductible, the less the coverage's cost. However, more deductible you have, the greater the cost. Keep in mind that if you purchase your extended warranty with an auto loan then you'll be paying more than just for the warranty but also for interest on the amount. What will an extended warranty provide? An extended warranty on your vehicle usually covers unexpected costly repairs that affect the major systems of the vehicle, including heating and air conditioning, the engine and brakes. The exact coverage you receive will depend on the warranty you buy, and may include either labor or parts. Certain extended warranties provide protection for roadside assistance tires , and any other costs related to the vehicle that you might face. Extended car warranty disadvantages an extended warranty for your vehicle could possibly help you save the cost of costly repairs but let's look at some of the drawbacks that might come with getting one. Some repairs are not covered. because an extended warranty usually matches the warranty of the new vehicle, but it also reflects the limitations such as mileage and the repairs that are covered. Read the fine print and exclusions list to determine if the coverage offered is worth the cost. There's a limit on time. warranties on vehicles are only valid for the time period that the warranty is extended. For instance, it might extend your original warranty by two years and 24,000 miles. If you began with a warranty that was three years and 36,000 miles, it would mean the full warranty will last five years and 60,000 miles. You may not want to use it. If you did decide to take onto an extended warranty, only 45 percent of them tapped into their extended warranty, as per a . The remaining 55 percent didn't. Those who purchased one and used it suffered an overall cost of over $375. There's a chance that you won't require it in the first place Check the track record of the vehicle you want to purchase by doing your researchand reading reviews of cars and recommendations from Renee Valdes, senior advice editor at Kelley Blue Book. "If the car is marketed as having a look at it carefully before signing on for an extended guarantee," says Valdes. This money could be used for. Savings for emergencies can be used to be used to pay for any repair on a car and not only repairs which are covered under the extended warranty -- and there's no expiration date. It is a good idea to buy an extended vehicle warranty An extended car warranty can only be used under very specific conditions. Extended warranties may be beneficial for those who intend to use their vehicles for a long time beyond the bumper-to-bumper and powertrain warranty, Valdes adds. "There's nothing worse than getting stuck with a big bill for a broken item on your car that there's no warranty that covers the product," says Valdes. If you're and the manufacturer's warranty is over, it might be a good idea to hop on an extended car warranty. Manufacturer warranting information can be found on the tag that is on the car's windows. If you are able to purchase a warrantee it will help you pay for covered repairs. It's beneficial to find out what the costs will be during the first year of owning the vehicle. And to reduce instances of expensive repairs, be on top of your car's upkeep. "It's always important to stay on top of car maintenance so your overall repair costs are low for the duration of your ownership of your vehicle," says Valdes. The bottom line An extended warranty for your vehicle isn't suitable for all. To determine whether an extended warranty worth it make sure you do your research and get some quotes. Learn about the repairs your vehicle may require in the coming years and check to see if they're covered under a specific warranty.

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Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are enthusiastic about helping readers gain confidence to take control of their finances through providing precise, well-researched and informative details that cut otherwise complex topics into manageable bites.

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How to get the cheapest car loan possible 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 as well as publishing original and objective content, by enabling you to conduct your own research and compare data for free - so that you can make informed 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 Earn Money The offers that appear on this website are provided by companies that compensate us. This compensation may impact how and where products are displayed on the site, such as such things as the order in which they may be displayed within the listing categories, except where prohibited by law. Our mortgage home equity, mortgage and other products for home loans. This compensation, however, does affect the information we provide, or the reviews you read on this site. We do not contain the vast array of companies or financial deals that may be available to you.

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4 minutes read. Published September 20, 2022

Writen by Rebecca Betterton Written by Auto Loans Reporter

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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 control their finances by providing concise, well-researched, and clear information that breaks down otherwise complicated topics into bite-sized pieces.

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They ensure that what we write is objective, accurate and trustworthy. Our loans reporters and editors concentrate on the areas that consumers are concerned about the most -- various kinds of loans available as well as the best rates, the most reliable lenders, how to repay debt, and more -- so you'll be able to feel secure when making your investment.

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Bankrate has a strict policy standard of conduct, which means you can be confident that we're putting your interests first. Our award-winning editors and journalists provide honest and trustworthy content to help you make the right financial decisions. The key principles We appreciate your trust. Our mission is to provide our readers with truthful and impartial information. We have standards for editorial content in place to ensure that happens. Our reporters and editors thoroughly check the accuracy of editorial content to ensure that what you read is true. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive any direct payment by our advertising partners. Editorial Independence Bankrate's editorial team writes on behalf of YOU as the reader. Our aim is to provide you the best advice to aid you in making informed personal finance decisions. We follow strict guidelines to ensure that our editorial content isn't in any way influenced by advertising. Our editorial team receives no direct compensation from advertisers, and all of our content is fact-checked to ensure accuracy. Therefore, whether you're reading an article or a review, you'll be able to trust that you're receiving reliable and reliable information.

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You have money questions. Bankrate has answers. Our experts have helped you understand your money for over four years. We strive to continuously give our customers the right advice and tools needed to succeed throughout life's financial journey. Bankrate follows a strict policy, therefore you can be confident that our information is trustworthy and reliable. Our award-winning editors, reporters and editors create honest and accurate content that will help you make the best financial decisions. The content created by our editorial staff is factual, accurate and uninfluenced from our advertising. We're open about how we are capable of bringing high-quality content, competitive rates and useful tools to our customers by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the placement of sponsored products and, services, or through you clicking certain hyperlinks on our site. This compensation could influence the manner, place and in what order items appear in listing categories in the event that they are not permitted by law. This is the case for our mortgage home equity, mortgage and other home loan products. Other elements, such as our own website rules and whether a product is available in your region or within your personal credit score could also affect how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.

The credit rating of your, vehicle you purchase, and your lender all play a role in the price of your auto loan. Finding the best place to borrow from requires several applications and additional investigation prior to shopping. But getting preapproved gives you more leverage when it comes to negotiations when you visit the dealer -- and could allow you to obtain a lower-cost car loan which can save you thousands in dollars during the loan term. Five steps to get a cheap car loan Make sure you are prepared to look around for a loan by knowing your budget as well as your credit score and loan time. These steps will help to find a low-cost -- and perhaps even affordable -in the long run. lender. 1. Know your budget Experts recommend that you do not spend more than 20% of your total per-month income for auto loan expenses, which include the monthly loan payment, fuel and other associated costs. (The recommended maximum for new and used car payment are 15 percent or 10 percent respectively.) Ideally, you'll walk into a showroom with an exact idea of , including the extra . Stay within your budget while searching for a car that will meet your requirements. Utilize websites like Edmunds as well as Kelley Blue Book for car cost and reliability estimates. Rates of interest on new vehicles are generally lower than on -- however, used vehicles generally cost less overall. 2. Examine your credit score Lenders take your credit score heavily when evaluating your capacity to pay back a loan. The better your credit score will lower the interest rate. If you're trying to secure the most favorable rate that the lender gives, a great score is typically necessary. You can pull the credit scores and past history from Equifax, Experian and TransUnion or for free at . Try and get your score to the most favorable condition possible before applying for an auto loan. Some ways to include dispute resolution with credit bureaus. If you notice any inaccuracies to your credit reports, you should file disputes with the appropriate credit reporting agency immediately. Negative information in your credit report inaccurately reported can drag your credit score. Getting current on any past due debt balances. Payment history accounts for the 35 per cent of your score on credit therefore it is essential to bring debts that are past due and to make timely payments on all your outstanding debt moving forward. Reducing your unpaid debt balances. Try to reduce your credit utilization rate to 30-percent or less to increase your credit score. It is also possible to reduce the rate of credit utilization. Refrain from applying for new credit. Avoid applying for other types of loans and credit cards. A string of hard inquiries within a short period could ding your score on credit. 3. You can apply to multiple lenders, but even though most lenders use the same elements to determine the interest rate they will use but they do apply these variables differently. The best way to find the cheapest deal depending on your credit score is to make an application to multiple lenders. Get information from several banks, credit unions and online lenders, and then evaluate their rates of interest. A quick search will give you an understanding of the options out there. Once you've got an idea of what you qualify for, you'll have an understanding of your monthly installment will be. Plus, if you do wish to, you could negotiate with an existing backup plan in place. 4. Apply for loans within a 14-day timeframe. Each credit application that you make results in an investigation into your credit which lowers your score on credit by few points. The inquiry stays on your credit report for up to two years. Hard inquiries also impact your credit score for up to 12 months. This makes numerous applications within a short period of time detrimental to your credit score. Fortunately, an exception to the rule applies to auto loans. The loan applications submitted within a 14-day window are considered a single inquiry, which reduces the effect on your score. Be aware that any applications made after this timeframe could cause an even more drastic drop in your credit score and make you ineligible for the best rates. 5. Take the time to calculate Although an annual percentage rate that is low (APR) is attractive but it's not the only number you should worry about. The value of the trade-in on your previous car, your and the amount of it that is incorporated into the total cost of your new car. In the end, the more you pay upfront (and the lesser interest you pay overall -- the cheaper you automobile loan can be. Use an to help determine the amount of interest you will be charged and also your monthly payments. It is a useful instrument, especially when you have prequalified with several lenders and understand the rates you can anticipate. The majority of auto loans are available with terms of 24 to . Although a longer duration results in lower monthly payments but it will cost more overall due to the cost of interest. Pick a loan with the shortest term you are able to afford to reduce the cost. Where can you find the most affordable car loan Dealerships work with banks, credit unions as well as online lending institutions to offer you financing. To get the cheapest car loan, you should to avoid paying extra fees for the same loan. Banks: If your have an account open at a bank, check to get Auto loan. It is possible to get a discount for a relationship in addition to a competitive interest rate. Because the majority of dealers use banks for financing, you'll get the same services . Online lenders: Since online lenders must compete with banks and credit unions, they tend to have similar rates. Best of all, many have a relationship with borrowers who are not creditworthy some credit history, which makes them a good place for low-cost loan if you lack an extensive credit history. Credit unions: Since they are not-for-profit, they usually provide lower rates and comparable loan terms to a bank. This means they're one of the cheapest ways to get the auto loan. But because you have to be a member, it may take a few months -with an active account -- before you're able to apply. Next steps Car loans are one of the largest expenses that people will have and so you must put in effort to find the lowest cost car loan possible. Find out the monthly payments and total loan cost you can afford prior to signing a contract for a new set of wheels. Find out about and prequalify with several lenders to ensure that you're getting the best price. Learn more

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

Rhys has been writing and editing for Bankrate from late 2021. They are enthusiastic about helping readers gain the confidence to take control of their finances by providing precise, well-researched and accurate facts that break down otherwise complicated topics into bite-sized pieces.

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(image: https://farm3.static.flickr.com/2413/32132424463_ee380d849c.jpg)Top advantages to buying a used car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content. We also allow users to conduct research and compare data for free to help you make informed 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 Earn Money The offers that appear on this website are provided by companies that compensate us. This compensation can affect the way and where products are displayed on this site, including for instance, the order in which they may appear in the listing categories in the event that they are not permitted by law. Our mortgage or home equity products, as well as other products for home loans. This compensation, however, does have no impact on the content we publish or the reviews that you see on this site. We do not include the vast array of companies or financial deals that could be open to you. SHARE Barry Austin Photography/Getty Images

4 min read published March 02, 2023.

Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is an expert in navigating 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 writing and editing for Bankrate from late 2021. They are committed to helping readers gain the confidence to manage their finances by providing precise, well-studied information that breaks down complicated subjects into digestible pieces. The Bankrate guarantee

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They ensure that what we write is objective, accurate and trustworthy. The loans reporters and editors concentrate on the things that consumers care about most -- various types of loans available and the most competitive rates, the best lenders, how to repay debt, and much more. So you'll be able to feel secure when investing your money. Editorial integrity

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 reporters create honest and accurate content that will aid you in making the best financial decisions. Our main principles are that we respect your confidence. Our aim is to provide our readers with reliable and honest information. We have standards for editorial content in place to ensure that happens. Our editors and reporters thoroughly verify the truthfulness of content in order to make sure that what you read 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 most accurate advice to assist you in making smart personal finance decisions. We adhere to strict guidelines in order in order to make sure that the content we publish isn't affected by advertisements. Our editorial team is not paid any compensation directly from advertisers and all of our content is fact-checked to ensure accuracy. Therefore, whether you're reading an article or a report, you can trust that you're getting credible and reliable information. How we earn money

If you have questions about money. Bankrate has the answers. Our experts have been helping you master your finances for more than four years. We continually strive to give consumers the professional advice and tools required to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct , so you can trust that our content is truthful and accurate. Our award-winning editors and reporters provide honest and trustworthy content that will help you make the best financial choices. The content we create by our editorial staff is objective, factual and uninfluenced by our advertisers. We're open about how we are in a position to provide quality content, competitive rates and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on specific links on our website. So, this compensation can influence the manner, place and in what order products appear within listing categories, except where prohibited by law. This is the case for our mortgage or home equity, and other home loan products. Other elements, like our own proprietary website rules and whether or not a product is available within the area you reside in or is within your personal credit score may also influence the way and place products are listed on this website. Although we try to offer an array of offers, Bankrate does not include information about every financial or credit products or services. Purchasing a used car over a new vehicle is an excellent alternative for many drivers. While rates of inflation in the U.S. soar to record high numbers, Americans are seeing its consequences at the supermarket checkout and at the . And with the new vehicle costs hovering around $47,000 by the time 2022 begins, according to Kelley Blue Book, it is the ideal time to save some money and invest in a used . Buy used and save money. Buying a second-hand car instead of buying a brand new one can make a huge difference in many ways. A used car will cost less based on price on the sticker alone, but that's not where the savings end. Additionally, you'll be reaching for your wallet much smaller than you would if you owned an entirely new vehicle in terms of costs, insurance and vehicle depreciation. The fourth quarter of 2022 for a used vehicle is $526. Drivers who finance a brand new car paid $716 according to . The savings of more than $180 per month adds up quickly, and you could save thousands of dollars by choosing an used vehicle over an entirely new one. While paying a lower cost of purchase for the same car model that is from an earlier year is the most obvious reason to purchase a used car, there are others also. 5 advantages to buying used There are many reasons to buy used. Not all used cars are identical. It is important to determine whether a vehicle you're considering buying is in good or poor condition. With that in mind , here five top reasons to buy a used vehicle. 1. A lower depreciation rate for vehicles is an unavoidable reality of the road, but an older vehicle has less depreciation than a new vehicle. New vehicles typically appreciate around 20 percent when they are taken off the lot. The majority of cars also lose 10 percent of their value during the first year. This is a loss of 30 percent within the initial year of ownership. A used vehicle depreciates at a much slower rate than a new vehicle. This is due to the fact that once you're driving of the vehicle, it will already have experienced the major depreciation. Brand new vehicles depreciate at the moment they leave the dealership however a used car has a slower rate of depreciation and this means that you'll have a a more stable loan-to-value ratio. 2. Lower insurance costs Insurance costs differ based on experience with driving, your age as well as your the credit score of your,, and your location. In general -- as the vehicle will cost less, the insurance cost for a used car will be less expensive than the cost of a brand new vehicle. A key factor in determining the is the value of the vehicle. Because it is less expensive than a more modern version, the cost of insurance will be lower. In terms of recommended coverage, if your vehicle is old, then you may be able to think about liability if your state allows it, versus adding collision and comprehensive insurance if your vehicle is more modern. Insurance rates aren't always consistent so to save money, be certain to research your expected auto insurance cost before driving off the dealership. 3. Lower dealership fees Just as insurance rates differ by zip code, the costs associated with your used vehicle are not created equal across the 50 states. However, they are much less than the fees for a brand new car because the cost of the vehicle is much lower in the first place. This is especially true for any sales tax that you might be required to pay. In order to prepare for the extra charges that are associated with using to purchase a vehicle, visit your state's DMV site for details on the registration fee and title tax as well as documentation fees. 4. A lot more bang for your buck Making the most of your car purchase is another advantage of buying used cars. You can buy more car by purchasing used rather than new. If you're at a high-end car but you're not able to afford the latest model, however one that's 2 or 3 years old might be more appropriate for your budget. It's also important to consider the fact that carmakers have stopped re-designing their models every year, meaning that the technology and design changes may be less noticeable. Estimate the savings you could save and compare which is the best for you using an . 5. Peace of mind the past, buying used vehicles was viewed as a risk and many drivers viewed it as a threat However, the availability of vehicle histories has changed this landscape. Drivers can now access information about the vehicle's ownership history, accident history as well as title status, mileage and much more. Before signing off on an used car, take advantage of the services offered by websites such as Carfax and AutoCheck to see history reports for the vehicle. Based on the vehicle's identification number, or VIN. The reports provide an array of valuable information such as proof of mileage as well as whether the car was ever declared a complete lost by an insurance firm. Certified pre-owned option If you're worried about hidden issues that could be present on a vehicle you've used before purchasing a certified used car could be the right choice for you. It will save you money when you purchase a used car but gain additional confidence in the reliability of the car. Certified pre-owned -- or CPO -- programs differ from one manufacturer to the next. In essence, CPO cars are ones that conform to a manufacturer's standards and have some type of guarantee against defects like a brand-new car warranty. To do this, check dealership inventories for the CPO vehicle you are looking for. Every dealership uses its own terminology in relation to used options so be certain to do some research before heading to the showroom. Most of these vehicles also have additional warranties, so make sure to check the warranty to know the scope of. The next step is to purchase a used vehicle is an excellent way to take the wheel without shelling out as much as you would on a brand new car. You will be met with lower depreciation costs and less on insurance and registration while still having peace of mind that your car is in great condition. When the time comes to finance a car that is used ensure that you check for the latest rates to ensure you're getting the best deal possible. This is what financing will bring. Leanr more SHARE:

This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the details of borrowing money to buy cars. The article was 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 readers gain the confidence to manage their finances with concise, well-studied facts that break down otherwise complex topics into manageable bites.

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How to file for bankruptcy and keep your car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by offering you interactive financial calculators and tools, publishing original and objective content. This allows users to conduct research and compare information at no cost and help you make financial decisions with confidence. 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 appear on this site come from companies that compensate us. This compensation may impact how and where products appear on this website, for example the sequence in which they appear within the listing categories and other categories, unless prohibited by law. This applies to our mortgage home equity, mortgage and other home lending products. But this compensation does have no impact on the information we provide, or the reviews that you see on this site. We do not contain the entire universe of businesses or financial offers that may be open to you.

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5 minutes read. Published March 20, 2023

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 edit was done 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 gain confidence to take control of their finances with concise, well-researched and well-researched content that breaks down complicated subjects into bite-sized pieces.

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More info

At Bankrate we aim to help you make better financial choices. While we adhere to strict ethical standards ,

This post could contain references to products from our partners. Here's how we earn our money .

The Bankrate promise

In 1976, Bankrate was founded. Bankrate has a proven track experience of helping customers make smart financial choices.

We've earned this name for over four decades by making financial decisions easy to understand

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

so you can trust that we'll put your interests first. All of our content was created with and edited ,

They ensure that what we write will ensure that our content is reliable, honest and reliable. Our loans editors and reporters focus on the areas that consumers are concerned about most -- the different types of lending options, the best rates, the top lenders, how to pay off debt and more -- so you'll be able to feel secure when investing your money.

Editorial integrity

Bankrate follows a strict standard of conduct, which means you can be confident that we're putting your interests first. Our award-winning editors and journalists provide honest and trustworthy content that will help you make the right financial choices. Our main principles are that we respect your confidence. Our aim is to provide readers with reliable and honest information, and we have editorial standards in place to ensure this happens. Our reporters and editors thoroughly check the accuracy of editorial content to ensure the information you're receiving is true. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive any direct payment through our sponsors. 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 personal finance decisions. We adhere to the strictest guidelines in order to make sure that content is not influenced by advertisers. Our editorial team is not paid directly from advertisers, and our content is verified to guarantee its accuracy. If you're reading an article or a review, you can trust that you're getting reliable and dependable information.

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If you have questions about money. Bankrate has answers. Our experts have helped you understand your finances for more than four years. We continually strive to give our customers the right advice and tools needed to be successful throughout their financial journey. Bankrate adheres to a strict code of conduct , therefore you can be confident that our content is truthful and accurate. Our award-winning editors and reporters produce honest and reliable information to assist you in making the right financial choices. The content we create by our editorial team is factual, accurate, and not influenced through our sponsors. We're open about how we are in a position to provide quality information, competitive rates and useful tools for you , 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 or services, or by you clicking on certain hyperlinks on our site. This compensation could impact how, where and in what order the products are listed within categories, except where the law prohibits it for our mortgage, home equity and other products for home loans. Other factors, such as our own website rules and whether a product is available within your area or at your self-selected credit score range may also influence how and where products appear on this website. We strive to provide the most diverse selection of products, Bankrate does not include specific information on every financial or credit product or service.

If you're considering alternatives, there are some to help keep your car from being repossessed -- even if you haven't paid off your auto loan. In several states, you could be able avoid repossession of your car through bankruptcy code exemptions, though the laws differ between states. Are you able to protect your vehicle through bankruptcy?

Both Chapter 7 and Chapter 13 bankruptcy include provisions through which you could be able to keep the car you purchased with secured loan.

How to preserve your vehicle by filing Chapter 7 bankruptcy Car loans are secured by the vehicle, which means that it is pledged as collateral to pay back the loan. Because the car serves as collateral, it can be taken by the lender in the event that you fail to make payments on the debt. However under Chapter 7, the most frequent bankruptcy for individuals there are a variety of alternatives to keep your vehicle. "To keep a vehicle while you go through Chapter 7, the debtor has to be current and stay in good standing with their lender or perform a'redemption or redemption,' which is paying back the lender or executing an 'affirmation' that may require altering the loan conditions, however this requires lender permission," says Lamar Hawkins, a bankruptcy lawyer with Guidant Law. Here's how redemption and reaffirmation are done: Redemption: Obtaining redemption is a way to pay your creditors the vehicle's current fair market value. If you can afford to make this happen it could make your life simpler later on because you'll be able to eliminate car payments. However, since most bankruptcy filings are made in a time where cash is scarce and available, this might not be a viable option. Reaffirm: This option allows you to make payments on your loan prior to filing for bankruptcy. In reaffirming your debt, you agree to continue to pay according to a timetable set by the creditor and you that could include amended loan conditions. Bankrate tip

If neither option is working financially for you, you can sell your car to the lender and get the debt discharged.

"When you are granted a Chapter 7 Discharge, you will have no more personal obligation to pay for this loan," says Pennsylvania-based bankruptcy attorney Dai Rosenblum. "All the creditor has to do is take their collateral -the car. They are not able to sue you for cash." Exemptions from bankruptcy filing to file for Chapter 7, your assets are liquidated or sold to pay creditors. But a bankruptcy court allows the holder to retain a specified amount of your property up to a certain amount of money, as per Debt.org. This is known as"exemption. "exemption." It is a federal exemption limit. maximum federal exemption is $4,000. But many States have their own exempt limits that must be adhered to Certain states' exemptions are more than $4,000, while others are less. What you can expect to receive for your vehicle in bankruptcy filings is not determined by the amount you paid for it. In most states, value is based on the value of the car's cash value determined by factors like the car's year, make and mileage. Sources from the automotive industry like Kelley Blue Book or Edmunds could also be used to help determine the value of your vehicle. If the current value of your car is determined to be lower than your state's exemption limit, then you'll be permitted to keep the vehicle even though you're filing for bankruptcy. On the other hand when the vehicle is valued higher than the exemption, the bankruptcy trustee could decide to sell the vehicle in order to repay your debts. This is how it works: If your state's exemption is $4,000 and your car's value is $2,000, you'll likely be able to keep the vehicle since it's value is less that the amount of exemption. If however, your state's exemption level is $4,000, and your car is worth $10,000, a bankruptcy trustee may sell the vehicle and make use of the funds to pay off your debt. The reasons you shouldn't keep your vehicle during Chapter 7 bankruptcy Keeping your car isn't always possible when you file Chapter 7 bankruptcy. Sometimes, it does not make financial sense to hold on to the vehicle. In the process of deciding on these issues, the value of your car as well as your equity in your car will play an important role. Car equity and bankruptcy Similar to a mortgage for the property equity is calculated by subtracting the amount you owe on your car loan from the vehicle's present market value. "For instance, if you own a car that has an appraised value of $10,000 and a 1,000 loan balance, you have equity of $9,000," says Rosenblum. In the event that your equity amount is higher than the exemption the bankruptcy trustee can opt to dispose of the car and apply the proceeds toward the repayment of your debts. It's not financially sensible to keep the car. Finally, it's also worth bearing in mind that if the car's fair market value is included in the loan and you want to keep the vehicle will not necessarily be a smart financial decision. "Very often it is the case that the loan amount is higher than the value of the vehicle and, if there is no way or the desire to keep the car, the bankruptcy filer will let go of the vehicle," says Michael Sullivan who is a personal financial advisor of the non-profit financial counseling agency Take Charge America. How to keep your car through Chapter 13 bankruptcy Chapter 13 bankruptcy offers a variety of ways to keep your vehicle. "The Chapter 7 framework is the basis for Chapter 13," says Rosenblum. "But when you enter Chapter 13, you reorganize your debt." Making a payment plan As an element in Chapter 13 debt reorganization, a three- to five-year repayment plan will be developed which takes into account your earnings and assets. The purpose for the Chapter 13 process is to let you retain your possessions, which includes your vehicle, while paying off your debt. In addition, if you're late on your payments, the process will require you to make up the gap and pay on time moving forward. The conditions of the loan The court could also order that the lender amend the car loan conditions, such as lower interest rates, which is another way to aid in keeping the vehicle. If the terms are changed, the monthly installments will be less. "A rewrite of the debt owed to the lender could be done through a Chapter 13 plan, and market terms can be forced on a lender," says Hawkins. Reduce the loan amount altering auto loan conditions as part in Chapter 13 may also include what's known as the "cramdown," which reduces the amount you have to pay to the lender to the car's reasonable market value. The timing of your purchase of a car is an important factor in the process of cramdown. In particular, there is a rule of 910 that applies to Cramdowns. Newer vehicles If you purchased your car within 910 days of bankruptcy, then you have to pay the full value of the car loan, though your interest rate may be decreased. Older cars: If you purchased your car more than 910 days before filing bankruptcy then you're only required pay back the vehicle's fair market value. The reasons you shouldn't keep your car during Chapter 13 bankruptcy In certain situations, it might not be feasible to keep your vehicle when you are pursuing Chapter 13, or hanging on to it may not be the best option. Examples of when this may hold true include: The loan has been in arrears and you don't have the money to bring the loan current or to pay the monthly installments. In this scenario, you may have to give up the vehicle. The vehicle is not in good condition or not reliable. In these conditions, giving up the car may be more sensible. The car is extremely valuable, and selling it could provide money in order to repay your obligations. You own a substantial equity in the car, which is greater than the bankruptcy exemption levels in the state you reside in. The most important thing to remember is Filing bankruptcy does not mean a car purchased with secured loan will be repossessed. Under the both Chapter 7 and Chapter 13 bankruptcy laws, there are provisions to protect your vehicle. Working with a bankruptcy attorney will help you determine which bankruptcy option is the best option for your personal financial situation.

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Written by a 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.

Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to control their finances by providing precise, well-studied information that breaks down otherwise complex subjects into bite-sized pieces.

Auto loans editor

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How we make money Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products and services, or for you clicking specific links on our site. So, this compensation can affect the way, location and when products are displayed within the categories of listing in the event that they are not permitted by law. We also offer mortgage or home equity, and other products for home loans. Other factors, like our own website rules and whether the product is offered in the area you reside in or is within your self-selected credit score range could also affect the manner in which products are featured on this site. While we strive to provide an array of offers, Bankrate does not include specific information on every credit or financial product or service. Bankrate, LLC NMLS ID# 1427381 | BR Tech Services, Inc. NMLS ID #1743443 |

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What to do if you can't make your final car loan payment Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by providing you with interactive tools and financial calculators as well as publishing high-quality and impartial content. We also allow users to conduct research and compare data for free - so that you can make financial decisions with confidence. 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 deals that are displayed on this site are from companies who pay us. This compensation could affect how and when products are featured on the site, such as, for example, the sequence in which they appear in the listing categories and other categories, unless prohibited by law for our loan products, such as mortgages and 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 cover the entire universe of businesses or financial offers that may be open to you. Share: Maskot/Getty Images

3 min read published on April 29, 2022.

Authored 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 ways and pitfalls of taking out loans to purchase cars. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers gain confidence to manage their finances with concise, well-researched and researched facts that break down complicated topics into bite-sized pieces. The Bankrate guarantee

More information

At Bankrate we aim to help you make better financial decisions. While we adhere to strict editorial 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 experience of helping customers make informed financial decisions.

We've maintained this reputation for more than four decades through simplifying the process of financial decision-making

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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 produce honest and reliable information to assist you in making the right financial decisions. The key principles We respect your confidence. Our aim is to offer readers truthful and impartial information, and we have established editorial standards to ensure that happens. Our reporters and editors rigorously verify the truthfulness of content in order to make sure that what you read is true. We keep a barrier with our advertising partners and the editorial team. 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 assist you in making smart financial decisions for your personal finances. We follow strict guidelines for ensuring that editorial content is not in any way influenced by advertising. Our editorial staff receives no any compensation directly from advertisers and all content is verified to guarantee its accuracy. So whether you're reading an article or a review, you can trust that you're getting reliable and dependable information. How we make money

You have money questions. Bankrate has answers. Our experts have been helping you manage your money for over four years. We strive to continuously give our customers the right guidance and the tools necessary to make it through life's financial journey. Bankrate follows a strict , so you can trust that our content is truthful and reliable. Our award-winning editors, reporters and editors provide honest and trustworthy content to help you make the best financial decisions. The content created by our editorial staff is objective, factual and is not influenced by our advertisers. We're open about the ways we're able to bring quality information, competitive rates and helpful tools to you by explaining how we earn our 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 on our site. So, this compensation can affect the way, location and in what order products are displayed within the categories of listing in the event that they are not permitted by law for our mortgage, home equity and other home loan products. Other factors, like our own rules for our website and whether a product is available in your region or within your personal credit score could also affect the way and place products are listed on this website. Although we try to offer a wide range offers, Bankrate does not include details about every credit or financial product or service. Paying your car loan late or not paying it at all has the same consequences, regardless of whether that payment is your first or the last. Inability to pay your vehicle payments can mean repossession. However, there are ways to secure your car and avoid repossession even if it's your final payment. Options if you can't afford your final car payment If you're struggling to make your final car loan payment you have a few options to avoid future credit-related consequences and the costs associated with it. 1. Request a loan modification loan modification. This will result in exactly what it sounds like, a modified loan. This differs from refinancing your loan. Modification of your loan is carried out directly with your current lender to alter the terms of your loan. A typical modification could yield lower interest or deferred payments. Although this could be more difficult long into the duration of your loan contact your lender as soon as you can. 2. Trade in your car To your vehicle , you'll have to contact various dealerships to see which ones have a more affordable car available. This may be simpler when you finance your car through a dealer and worked with the dealership, however it is still possible if not. Do not settle for the first deal you are offered look around and determine the value of your vehicle whenever you are seeking quotations. 3. Sell privately, although it requires more consideration It can ease the strain of your current car and allow you to get a more affordable option. It is particularly popular right this moment, so you are likely to be able to get a decent price. But selling your car could require an entirely new vehicle and, with a hot market it can be difficult to find a vehicle for your particular needs and budget. 4. Ask family and friends for assistance. The last option is to contact relatives and friends to ask for help. Although this assistance doesn't have to be financial, it might be uncomfortable. Use this as a final effort to pay for vehicle repossession instead of your primary protection. Ask around if they know anyone interested in purchasing or selling the vehicle at a lower cost, and work from there. Refinancing your loan isn't an option

However, if you're at the final payment stage of your loan you're not able to refinance. The lenders have specific restrictions regarding refinancing aspects such as vehicle age or mileage, as well as the loan amount. [/su_editorial-insight How to avoid car loan payment issues in the future Not making your final car payment can be discouraging, but one financial misstep does not need to result in a lifetime of headaches. Instead, you should take the time to plan that coming loan to ensure on-time payments. Set aside money for your next car purchase. The best way to avoid the possibility of financial problems in the future comes down to financing only a car you can afford. Before you sign off on the next auto loan consider how your monthly payments are incorporated into your budget while also factoring in any drastic changes in you bank account. Set up automatic payments Not all lenders offer the option of automatic payments however, the majority offer it. If you are able to maintain a consistent pay, it is a great way to ensure you make your loan payments punctually and in full. You may even benefit from the rate discount that some lenders offer when you sign up for autopay. Be sure to look for loan additional fees if you're financing through a dealership and you're not sure of the terms, take a look at the fine print on the loan agreement and be sure that you aren't spending extra cash each month for . Look out for typical additional services like extended warranties as well as tire and wheel protection including rustproofing and GAP insurance. The bottom line Trying to pay your final car payment could mean you're without your vehicle if you don't act fast. But there are options. Consider loan modification, selling your car, selling privately, or reaching out to your family and friends before committing to vehicle repossession. Be aware of the latest news the latest information to make sure you don't end up in this dangerous situation when you purchase the next car you purchase. Learn more

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This article is written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ins and outs of securely taking out loans to buy 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 gain the confidence to take control of their finances by providing clear, well-researched information that breaks down complex subjects into bite-sized pieces.

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Recession watch: Holiday car shopping statistics and predictions Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial decisions by offering you interactive financial calculators and tools as well as publishing quality and impartial content. We also allow you to conduct your own research and compare data for free to help you make financial decisions with confidence. Bankrate has agreements with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this website come from companies that compensate us. This compensation can affect the way and when products are featured on this website, for example for instance, the order in which they be listed within the categories of listing in the event that they are not permitted by law. This applies to our mortgage, home equity and other products for home loans. However, this compensation will not influence the information we publish, or the reviews you read on this site. We do not cover the universe of companies or financial deals that may be open to you.

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3 min read Published November 28, 2022

Authored by Rebecca Betterton Written 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 an automobile.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to manage their finances with precise, well-studied information that is broken down into complicated subjects into digestible pieces.

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Bankrate adheres to a strict code of conduct and rigorous policy, so you can rest assured that we'll put your needs first. Our award-winning editors and reporters produce honest and reliable content to help you make the right financial choices. The key principles We appreciate your trust. Our mission is to provide our readers with accurate and unbiased information, and we have established editorial standards to ensure that this happens. Our reporters and editors thoroughly verify the truthfulness of content in order to make sure the information you're reading is true. We maintain a firewall with our advertising partners and the editorial team. The editorial team of Editorial Independence Bankrate does not receive compensation directly through our sponsors. Editorial Independence Bankrate's team of editors writes for YOU who are the readers. Our aim is to provide you the best advice that will assist you in making smart financial decisions for your personal finances. We follow strict guidelines in order to make sure that the content we publish is not influenced by advertisers. Our editorial team is not paid directly from advertisers, and our content is thoroughly checked for accuracy to ensure its truthfulness. Therefore, whether you're reading an article or a review, you can trust that you're getting reliable and reliable information.

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If you have questions about money. Bankrate has the answers. Our experts have been helping you manage your finances for more than four decades. We continually strive to give our customers the right guidance and the tools necessary to succeed throughout life's financial journey. Bankrate adheres to strict standards , so you can trust that our information is trustworthy and precise. Our award-winning editors, reporters and editors create honest and accurate information to assist you in making the best financial decisions. Our content produced by our editorial team is objective, truthful and uninfluenced through our sponsors. We're open regarding how we're able to bring quality information, competitive rates and useful tools to you by explaining how we earn our money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods andservices or by you clicking on certain links posted on our website. Therefore, this compensation may affect the way, location and in what order items appear within listing categories and categories, unless it is prohibited by law. This is the case for our mortgage and home equity products, as well as other home lending products. Other factors, like our own website rules and whether the product is available in the area you reside in or is within your self-selected credit score range can also impact how and where products appear on this website. We strive to offer the most diverse selection of products, Bankrate does not include details about every credit or financial product or service.

As the season of Christmas approaches The last thing you want to think about is the recession likely to occur over the next few years. However, not all ignorance is bliss. Inflation is rising and the possibility of recession will affect all aspects that affect the economic. This includes buying a car, with new vehicles being purchased in October, according to Kelley Blue Book. If you're one of the people who are worried about this recession, a little patience could help you save money. Instead of gifting an automobile with a huge bow this holiday season -- to your self or someone elsetake a look at where the prices are and what you can do to prepare for the future . Recession preparedness statistics Unfortunately, the season of giving is known for its extravagant spending -- often times, it results in people spending beyond their means. A recent survey found that 27 percent of shoppers admit to straining their budget to pay for gifts for the holidays. If consumers remain within the trend of spending this year thus far it is possible that issues will arise. In March 2022 even with inflation at 8.5 percent, consumers had spent less more than two years earlier, according to an McKinsey study. The majority of Americans believe that inflation will rise more one year from now than it is at present. Car loan balances sit at as November 2022. The average monthly payment for new vehicles for the first quarter of 2022 is $667. The monthly average for used cars during the second quarter of 2022 was $515. The number of new vehicles sold dropped from a high of 16.9 millions in the year 2005, to a low of 1.9 million during the recession. 41 percent of Americans aren't sure if they're prepared for a recession if it was to occur by the end of 2023. 38.22 percent of consumers have financed new cars in the 2nd quarter in 2022.

Holiday shopping statistics A lot of holiday shoppers get caught in the trap of looking for the perfect gift, which could mean overspending or even stressing the budget. Some shoppers this year though are taking a different approach and three out of five choosing to save money according to . This is a smart decision considering that the price of a consumer index sat at 298.1 in November's mid-point, an increase from 274.1 last year. Whatever your reasons for spending more money this winter, now is an ideal time to be aware of the impact of spending too much on every aspect of your financial health. 40 percent of shoppers believe that rising prices is likely to change how they shop this year. There are nearly 29 percent more used vehicle bargains in January. The majority of people will employ money-saving tactics this holiday season. The winter months bring an increase in those who buy luxury cars and sports automobiles. 27 percent of shoppers confess to feeling financially strained over the period. The majority of people will spend less on gifts this season.

How to prepare for a downturn in 2023? While drivers in 2008 faced a similar fate and the expected recession that is predicted for 2023 will have many elements that the drivers of 13 years ago didn't need to think about. Most importantly, there are the supply chain problems which continue to increase costs for vehicles. Due to stock limitations it is likely that you won't be able to benefit from many of the specials that drivers of 2008 were given. However, there are several ways to be prepared when it comes to the personal finance of your vehicle and personal purchases. Take note of these tips to save money during the recession. 1. Buy only what you can afford The primary way to ensure that you do not get into a difficult financial situation when purchasing a car is to buy only the amount you can afford. Make sure you are aware of consider this amount while also factoring in the costs that may accrue throughout ownership , like visits to the mechanic or filling up at the pump. 2. Create an emergency fund Experts recommend that you be able to cover 3 to 6 months of expenses. However, pennies can accumulate, so it is smart to start saving as early as possible. Consider making your emergency fund the form of a -- that you pay interest on. 3. If you decide to buy an electric car, despite having more upfront costs however, they will cost less for the duration of ownership. A reduced number of trips to the pump could result in thousands of dollars saved, so think about a if driving an EV will fit into your budget and life style. 4. Be wary of the long-term loan While it can be appealing, it comes with some risks. Signing to an additional loan will mean the monthly costs are lower, it does not mean that you'll pay more in the end actually contrary. A longer-term loan extends the amount that you are required to spend over a longer period, meaning there's longer time to accrue interest. accumulate. 5. Request loan preapproval. Although not all lenders offer the option to apply for a loan but it is one of the most efficient ways to understand your contribution to the cost of the vehicle's ownership prior to. Preapproval for loans simply means that you are able to lock in the monthly costs you anticipate prior to signing the"dotted line. By doing this you can determine if the car you're looking at will be within your budget. 6. Refinance your current vehicle If your loan exceeds limits on your finances, you might consider refinancing your current vehicle to lower your monthly cost. This is especially true if your credit score has increased since you took out the loan or originally signed off with an agent.

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Authored by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ways and pitfalls of taking out loans to purchase the car they want.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers gain confidence to control their finances by providing concise, well-researched, and clear data that boils down complicated topics into bite-sized pieces.

Auto loans editor

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