Tagged: Cars

The Basics Of Financing A New Or Used Vehicle

The Basics Of Financing A New Or Used Vehicle

If replacing your car’s parts doesn’t look at promising a solution as it once did, it may be time to consider purchasing a new vehicle. Believe it or not, even though the credit markets have tightened considerably over the past year, automakers are willing to finance your purchase. It’s largely a matter of your credit score, the price of the vehicle, and the length of the loan. In this article, I’ll explain the fundamentals of auto financing. We’ll look at leasing, getting a loan from your bank (or credit union), and purchasing it outright.

Arranging A Leasing Agreement

Despite what many people think, most dealerships don’t have an in-house leasing operation. Instead, they function mostly as a broker for the deal. The dealer is connected to a network of banks and each institution will offer different terms for the arrangement. When you tell the salesperson that you’d like to lease a new vehicle, they’ll use the computer to “shop” the banks’ terms.

Before the salesperson can begin “shopping,” you’ll be asked how long you’d prefer to hold the lease (usually two or three years) and the amount of money you’d like to put down. If you’re interested in leasing, I recommend that you hold the car for three years rather than two. It’s more cost-effective. Also, most lease agreements will allow you to drive 12,000 miles. You’ll pay a fee for each mile over the allotment that you drive the car.

At the end of the lease contract, the vehicle will have a residual value. It’s completely up to you whether you’d prefer to buy the car or turn it in for another model.

Financing Through An Auto Loan

Most large dealers have a financing arm. For example, if you want to buy a new Envoy from General Motors, you can arrange to have it financed through their GMAC Automotive Financing subsidiary. If you prefer, you can get an auto loan from your bank. In most cases, your bank will offer a lower rate on the loan (thereby saving you money over the length of the contract), but that can depend upon your credit score.

Your monthly payment is going to depend upon a few factors. It will be influenced by the price that you end up negotiating for the car, the amount of money you use as a down payment, and the length of the contract.

Paying For It Outright

Paying outright means that you write a check for the price you’ve negotiated for the vehicle. Few people have the financial resources to buy a car without financing it. That said, when they do, the entire negotiation becomes transparent. The dealership can no longer build its profit inside the interest rate and monthly payments.

Few buyers fully appreciate the factors which influence how much they end up paying. When the time comes to purchase a new car, you’ll understand the framework of how auto financing works. And that’s the first step toward getting a great deal.

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Chevrolet Truck

Chevrolet Truck
Chevrolet is the top selling General Motors brand and is almost synonymous with GM.  Chevrolet or “Chevy” is marketed primarily in North America but the 18 vehicle range is also sold around the world.  The company was formed when William Durant, GM’s founder had been forced out of the company in 1910 and teamed up with Louis Chevrolet, a race-car driver.  By 1916, Chevrolet was profitable enough to buy a majority stake in General Motors and Durant returned to GM triumphant.

Chevrolet is well known for its popular range of pickup trucks today and the Silverado, a pickup truck, is its best seller in the US.  Chevrolet uses the same platforms as are used for GMC trucks with minor differences such as the grill and the use of dual-headlights for Chevy and a quad arrangement for GMC. Chevrolet is one of the four brands which will be retained by General Motors in its re-organization in 2009.

Chevrolet is General Motors top selling brand of cars and trucks – so popular is the brand and so closely associated with GM that the two are almost used synonymously.  Chevrolet is marketed around the world and provides an 18 model range from which, the Silverado, a pickup truck, is its number one best seller in the United States.

Chevrolet shares the same platforms as GMC, its sister-company, though there are minor differences between the two in terms of grills, body finish and headlight arrangements.
Chevrolet is named after Louis Chevrolet, a race-car driver who befriended GM founder, William Durant, in 1910 after he had been ousted from General Motors.  Durant used the Chevrolet name for a new car company and by 1916 the operation was so profitable it allowed Durant to buy a majority stake in General motors and he returned to GM as owner.

General Motors went into bankruptcy in 2009 and as part of the reorganization it has axed several of its brands – only four will remain and Chevrolet is one of the survivors.


About Audi

Audi is a German luxury car maker which forms part of the Volkswagen group – Europe’s largest car maker and the third largest in the world. Audi itself was established in 1899 as “Horch”, the family name of the founder, August Horch. Subsequently, Horch was ousted from the company he formed and he created another one using the same name but was sued for the infringement – the result was “Audi” which is the Latin form of his name – Horch means “hark” in German and Audi means “hear” in Latin.

As a luxury car maker, Audi has refrained from producing pickup trucks but has entered the luxury SUV market with the Q7 in 2007. It has followed this model up with the Q5 launched in 2009. All Audi bodyshells are manufactured from galvanized materials to prevent corrosion and it is the first manufacturer to adopt this method. Audi also refuses to adopt the rear-wheel drive system which its closest rivals, BMW and Mercedes, favor so well.

Audi is the German luxury car maker which forms part of the Volkswagen group which in turn is the world’s third largest car maker. August Horch founded his company in 1899 but was removed from the board and went on to form a new company which traded using the same name – the German courts compelled him to change the company name which he did to Audi – Audi is the Latin version of his family name and means “to hear”.

As a luxury car maker, Audi has steered clear of producing pickup trucks as this has not been their target market but, with the increasing demand for larger passenger cars, SUV’s, Audi launched the Q7 in 2007. This was followed up with the Q5 in 2009 and sales have been strong for the company in North America and Europe. Audi has a reputation for precision engineering and high performance using 100% galvanized materials in the body shell construction which prevents corrosion and installing front-wheel drive systems in contrast to close and bitter rivals, Mercedes and BMW.