So a lot of companies advertise that you can skip car payments when you refinance your auto loan. It seems counter intuitive that a company that wants your business would let you skip payments considering that is what they are going to want you to do for the years they have your loan on their books. However that is exactly what happens. It is a funny quirk of the system that you actually get to miss a payment when you go through this process.

When a company refinances your auto loan, they must pay off your existing bank or finance company with a lump sum. Interestingly enough this counts as a payment to your old company, but not your new company. So you just get to take a break from making payments until your banks figure out your new loan. The time between payments varies from company to company, however you should almost always have time between when you would have made your payment and when you have to make your payment with your new company.

There is no drawback to this except for now it will take a days longer to pay off your loan, but no extra money comes out of your pocket. The skipped payment happens everytime you refinance your loan. So these banks are advertising completely honestly when they talk about skipped payments.

I didn't understand Hummers. I didn't understand going through the trouble of getting a car loan to buy a Hummer.  I didn't understand people who think Hummers are a good idea.  Now I do. My revelation came when I saw my friend's lower back tattoo, better known as a "tramp stamp." This is a normal guy, well, normal as in not a drug dealer who kills people...he's wife and 2 kids normal.  This somewhat normal guy was caught up in the tattoo craze of the early 2000's, you know when everyone wanted to look like their favorite 90s rock star?  In his case, he somehow managed to get his little memento just before culture had decided that lower back tatoos were for girls. So he's probably 1 of about 50 men in America who in thinking they were being edgy with their tatoos in strange places really turned out to look like a chick. 

Now when I think of Hummers and people who buy them, my friend and his tramp stamp come to mind. They were cool for awhile, namely because they were so rugged and military, but that idea did not translate well into a popular format.  No one thinks that your massive yellow H3 was ever an urban warfare troop transport.  It's a massive land yacht that looks stupid, and people who drive them thinking they are rugged and military actually look like tools...everyone laughs at them.  In other words, Hummers are the male tramp stamp of the automobile world.  

Check out the 2011 Dodge Charger .  Go to your nearest dealer, get a car loan, and purchase one of these bad boys.  If I could afford the payments, I'd be right in front of you in line. 

With the government Cash for Clunkers program, having up to $4500 to throw at a new car certainly made it easier to get pre approved for a car loan.  678,418 car buyers benefitted from the program. That is a lot of auto loans, and the auto industry certainly benefitted, but as expected with a program this big, there have been a few snags.  See this article from USA Today detailing some of the problems. 

Most people, unless they are rolling in bling, will need to get a car loan if they are going to buy a car.  Many people won't need to go any further.  Their credit is good and they are in and out of the dealership just like that (although granted a little slower than in the past).  But what about auto loans for people with bad credit?  It's more common than you think, and the circumstances for bad credit aren't always so negative. 

Think of it as a spectrum.  On one end of the bad credit spectrum is people with no credit, which means they have never taken out a loan and paid it off, or are not currently paying anything off.  This is common with young people, namely college students.  See also ex-felons recently released from prison.  It's more an issue of circumstance than consequence, although I'm not sure what a felony does to one's ability to get a loan.  In these times it will be more difficult to get an auto loan for those who have no history of making payments.  Simply put, no credit is bad credit. 

On the other end of the spectrum from no credit is debt.  This can range from having a high debt to income ratio (too much debt with not enough money or assets to cover it), having a history of late payments on debt, or defaulting on past loans.  This is by no means a good place to be in, but once again, sometimes this is beyond our control.  

Either way, companies aren't going to loan you money if you find yourself in one of these situations...and it's happening with more and more people.  Yet you need a car.  You need to get a loan.  This is where Roadloans comes in.  If this is you, check us out.  

 

Those who are new to the world of auto finance may need help understanding what they are getting into.  The truth is, there are lots of variables that can change on a dime.  That's what makes it all so exciting!  Whether buying used cars or new cars, the process is much the same, but there are some pitfalls you need to be aware of.  Check them out here.