Car Loans

Get an Auto Loan the Smart Way

noreply@blogger.com (Dr. Wizvax) — Sun, 20 Aug 2006 14:41:00 +0000

by: Anthony Finlay

Did you know that most people pay hundreds or thousands of dollars more on auto loans than they have to? Get an auto loan the smart way. Read on.

Most people really get taken for a ride on their auto loan. Did you know that differences in the total cost of different auto loans can run into a thousand dollars or more? Here's how you can get the lowest rate:

Make a list of different auto loan lenders and their interest rates and terms, before you go to the dealer (the web is usually the easiest way to do that). Did you know dealers get a commission on the loans they refer? If you're not careful, that extra bit of money for the lender could mean you pay a higher rate than you would if you got the loan yourself.
Get a credit report and figure out your FICO scores. Removing any incorrect negative information from your report will help you get a better deal. Knowing exactly what your score is will help you figure out what interest rate you can realistically get.
Have bad credit? Try going to your credit union, bank or another institution where you have a relationship. Lenders like to help out established customers. If your bank still won't help, online "bad credit auto loan" lenders usually offer better less expensive loans than dealers who advertise their great deals for people with poor credit.
Use a vehicle loan calculator. It will tell you what your loan will cost each month. It saves you the time of looking at vehicles you can't afford, makes you aware of what information you’ll need to apply for a loan, and is a "reality check" of your financial condition.
Comparison shop, comparison shop, comparison shop. You don't get the least expensive car by choosing a dealer at random, and you won't get the least expensive auto loan that way, either.

Auto Loans: Don't Dig a Money Pit in Your Garage

noreply@blogger.com (Dr. Wizvax) — Sun, 20 Aug 2006 14:36:00 +0000

by: Anthony Finlay

Choose the wrong auto loan and you might drastically increase the chances of defaulting and losing your car. Find out step-by-step how to avoid a money pit.

Car loans are certainly less costly than home mortgages, student loans, or other kinds of loans. So why do so many people end up defaulting and losing their cars? Find out these hidden dangers:

Biggest Hidden Car Loan Danger: The Inherent Money Pit

Unlike home mortgages, student loans or other big-ticket loans, car loans are inherently money pits. A house can build equity; higher education can increase earning potential; even jewellery can sometimes be re-sold for as much as was paid for it. If you borrow to buy one of those things, you may eventually get a return on investment. But every single car loses significant value and keeps losing it as time goes by.

Solution: spend as little on your car as possible.

Of course, in order to spend as little as possible over the life of the vehicle, you need to get a well-made, fuel-efficient car, rather than the one with the lowest price on the windshield.

But a pickup truck, SUV, sports car, or "luxury" model is a guaranteed money-loser. Don't worry about what other people will think. Think about it: when was the last time you saw an expensive automobile and thought, "I really like and respect whoever owns that!"

The best buy? Many economists actually recommend buying a used car that's a year or two old. That way you can actually benefit from the fact that cars only drop in value. Even a car that’s just six months old may offer you a substantial savings. Just have it inspected thoroughly so you don't lose what you've saved on maintenance payments.

Hidden Car Loans Danger: Dangerously High Monthly Payments

Unfortunately, most people never figure out the total cost before signing on the dotted line. They end up staying up late at night trying to figure out how to make ends meet. They live in smaller houses. They skip going out at night. They don’t go on vacation.

All that sacrifice to have a brand-new SUV in the driveway!

Take a hard look at your finances, and figure out how much you can pay total each month for your car. Be sure to take into account insurance, tax, maintenance, and fuel. Usually, when people actually do calculate the total monthly cost of the car they’re considering buying, they're amazed by how high it is.

How Much Car Debt Can You Afford?

1) Make a list of your average monthly non-car expenses, and subtract them from your earnings.

your monthly after-income-tax income
any other taxes
housing (including any fees and property taxes, and utilities)
food
health insurance or HMO
life insurance
debt payments
401 (k), IRA, or other long-term savings
short-term savings
telephone, cellular phone, cable, internet, etc.
entertainment and fun stuff (be honest!)
cost of yearly vacation(s) divided by 12
other expenses
what you can spend on a car

2) Subtract your monthly car-related expenses from the amount you have left over from your other expenses.

What you can spend on a car (from above)
Amount you're spending per month on gas (raise or lower this figure depending on whether you are getting a car with higher or lower gas mileage).
Monthly maintenance (remember: your new car won't stay new long, so maintenance will be an issue).
Monthly insurance (remember that for a new car, your insurance premiums may go up).
Tax.
Maximum monthly loan payment.

Now plug the number above into a vehicle loan rate calculator to figure out big of a car loan, and how much interest you can afford.

Final Hidden Auto Loan Danger: Unnecessarily High Rates

If you simply take the first loan the dealer offers you, you are probably paying too much. Do some comparison shopping on the internet, and bring a list of the best loans with you when you negotiate loan terms with the dealer.

Don't let the dealer cheat you by shifting the cost from the car loan to the car price to the deal on your trade-in. Make sure you get a good deal overall.

Auto Loan Options for People with Bad Credit

noreply@blogger.com (Dr. Wizvax) — Sun, 20 Aug 2006 14:34:00 +0000

by: Anthony Finlay

Internet surfers with bad credit looking for an auto loan are bombarded with advertisements most days. Many of these ads are truthful in their bad credit auto loan options. However, there are many things to avoid, and this article will describe some of those.

Directly financed auto loans for people with good credit are a bit different than those with bad credit. People with bad credit are expected to pay more of a down payment as well as a higher interest rate on their auto loans. Many creditors won't even extend an auto loan to those with bad credit. Depending on how bad someone's credit is, auto loans can range from a 20 - 50% down payment requirement, interest rates from 5-26%, and amortization (the length of the loan) anywhere from 2-4 years.

This may sound like a lot of bad news for bad creditors looking for an auto loan. But with some good planning and foresight, these auto loans can actually help people with bad debts rebuild their credit history.

The worst situations in bad credit auto loans show up when car dealers artificially inflate the pricing or interest rates on their cars. Auto dealers who specialize in bad credit loans will take a car normally selling for $5,000, inflate the price to $8,000, take a $2,500 down payment and then finance the purchase at 24%. Now the bad creditor will be in debt to the auto loan company for an inflated price that isn't indicative of the vehicle's real value. A way to counteract these types of sneaky bad credit auto loan dealers is to check the value of the car you are looking at, first, and then only pay $200-500 extra then what's listed. Only in exceptional circumstances would you ever pay more than this for a car.

Two different ways of selling a car have emerged recently with the new, Internet economy. The first is called the 'dealer network system'. Auto purchasers can get a loan regardless of their bad credit history with this option. Essentially, a potential customer looks at a car on a website, and then answers some basic questions if interested in buying. This information is then passed along to a dealer specializing in bad credit auto loans. Since there are no fees involved, this can be a real boon for the bad creditor looking for a decent car loan. However, with this system, there is no way of researching the auto dealership you are about to do business with.

The other new option is called an application service. In this situation, a person with bad credit applies online for an auto loan, and the financial information is then sent to multiple lenders at the same time, with the hope that one or two will be willing to take the credit risk. If the system works, several dealerships with fight for the customer, using price and convenience as their selling points.

Car Loans After Bankruptcy - Tips to Getting Approved

noreply@blogger.com (Dr. Wizvax) — Mon, 24 Jul 2006 18:09:00 +0000

A car loans after a bankruptcy is one way to help build back your credit history. In fact, once your bankruptcy closes, you can apply for a car loan the next day. To get approved with the best rates for your car loan, follow these tips.

Review Your Credit Report

Before you start applying for a car loan, check out your credit report and make sure all your accounts are in order. It is not uncommon after a bankruptcy to see open accounts that should be closed, which hurt your credit rating.

While looking at your credit report, consider adding a page explaining the situation that resulted in your bankruptcy. If there were extenuating circumstances, lenders may approve you for a better rate than under normal conditions.

Plan Your Car Purchase

Before purchasing a vehicle, decide what you can afford in a monthly car loan payment. This will help you decide which financing package is best for you. Both the loan amount and length of payments will determine your monthly payments, so there is flexibility in determining which vehicle you can afford to purchase.

Use A Car Loan Lender

Car loan lenders make their money by finding you a loan. Car loan lenders work with several financing partners to back loans with all types of credit risk, including bankruptcies.

Online car loan lenders deal with thousands of loans, and can usually find you a better deal than your local car dealerships. Online car loan lenders will send you a check when you are approved, basically making you a pre-approved car loan buyer.

Explain Your Situation

Car loan applications will ask if you have ever declared bankruptcy and why. This is your chance to explain what led up to the situation and what steps you have taken to resolve your credit situation. Be sure to include improvements in your financial history too.

Consider Refinancing

Once you are approved for a car loan, keep your eye on future refinancing. By making regular payments on all your bills, in a year's time you could qualify for significantly lower interest rates. In three years, you can build your credit score to near excellent and qualify for even lower rates.

To view our list of recommended auto loan companies online, visit this page: Recommended Auto Loan Companies Online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

Article Source: http://EzineArticles.com/?expert=Carrie_Reeder

Drive your Dreams with Used Car Loan in UK

noreply@blogger.com (Dr. Wizvax) — Mon, 17 Jul 2006 11:51:00 +0000

In these days of inflation, some households may find it difficult to buy a new car due to inadequate income. Buying a car is not a small investment and it can affect the whole budget, as income is limited. So rather than going for a new car, the person prefers to buy the used or second hand car. Used or second hand cars are generally available at half price of a new car. Sometimes, it also depends on that for how long it has been used.

The person with limited income can also find difficulties in arranging the funds for a second hand car; because the amount is not so small. In order to simplify their problem, the finance world has options for such people as well. That is used car loan UK. It is especially designed for the people who can’t afford a new car.

While seeking for cheap car loan the person is required to compare the quotations from different lenders. The factors which enable person to get the cheap car loan are his credit history, the amount he borrows and the equity in his house (which is optional). The lender provides the loan regardless of credit history of a person. It implies that the people with bad credit score can also apply for the used car loan in UK. Loans for poor credit scorers can be termed as bad credit car loans But to certain extent, a good credit score matters at the end of the day. They have to pay a bit higher rate of interest as compared to the people of good credit.

The person should keep in his mind that a rate which is made available to one person may not be similar to the rate offered to other person, as the rate charged depends on the individual circumstances,

Following are certain tips, which the person should follow while going for a used car loan.

Firstly, the person should ask himself that how much he can afford or arrange the funds himself. While answering this question he must consider the whole cost of the package which he is going to avail. Secondly, the person should also consider the maintenance cost of the car, that in the long run will he be able to bear the expenses.Thirdly; the lender from which he is going to avail the loan must be reputed and authorized.

So, before you drive your dream car! Ensure that you consider all above points and make a good loan decision.

Eva Baldwyn aims to inform common men and women of the several issues involved in personal loans and mortgages through her articles. An MSc in Economics & Finance from the Warwick Business School is proof enough of the knowledge that she possesses in the field of finance. To find Personal car loan, new car loan, Used car loan, bad credit car loan, cheap car loan in UK visit http://www.carloaninuk.co.uk

Article Source: http://EzineArticles.com/?expert=Eva_Baldwyn

There is A Car Loan Out There Just For You

noreply@blogger.com (Dr. Wizvax) — Fri, 14 Jul 2006 09:35:00 +0000

There is no shortage of lenders providing auto loans; loans of every kind are big business. Regardless of your credit status there exists a lender providing car loans for someone with your exact credit profile.

Where to look for an auto loan

When you are ready to apply for a car loan a good place to start would be with your current financial institution. Credit unions have long been among those offering the best loan terms. You may be able to complete your car loan application via the telephone, fax or the Internet. Your bank may be willing to offer comparable car loan terms to earn your business.

Dealerships are a good source for fast car loans

Another obvious choice for fast car loans is a car dealer. You can apply for an instant car loan in the showroom and drive home a few hours after your car loan is approved. Dealerships are among the biggest players in the world of car financing.

Car financing goes global

The World Wide Web has changed the way that we apply for loans. The Internet has widened the car loan playing field. No longer are car loan applicants limited to car loan programs in the neighborhood. Now, someone needing a car loan in Sacramento can get a car loan from a lender in Chicago. This is especially important for auto loan applicants with credit blemishes. With auto loan research, consumers can be assured of getting the best car loan for their situation because of the competition among car loan programs. Just be careful to complete your auto loan application with care using only a secure car loan application site.

In addition to dealerships, those in the market for a car loan can look to the Internet for an instant car loan. You need not wait days for car loan approval, fast car loans make it possible to apply and drive today. For the best loan terms consider getting your car loan from an auto financing source other than the dealer. You can significantly increase your negotiating power if you have an auto loan in hand when you visit the car dealer.

Knowing what auto loan terms to expect

If you are in the market for a car loan you can get some idea of the auto loan terms you can expect based on your credit score. Before you apply for an auto loan learn your credit score and visit a site such as Bankrate where you can learn about ballpark car loan terms for someone with your credit score. Loans involve some element of risk; the higher the perceived risk the higher the interest rate on your auto loan. If the interest rate on your car loan is prohibitive it may be best to wait until you improve your credit before applying for an auto loan.

[via Car Junky]

Bush, GM to announce extension of car loan to first-responders

noreply@blogger.com (Dr. Wizvax) — Fri, 14 Jul 2006 09:31:00 +0000

By Lori Lyons

Saints rookie running back Reggie Bush is continuing to help his beleaguered new home city, and he's using yet another one of his corporate sponsors to do so.

At a press conference today in Slidell, Bush and General Motors will announce a one-year extension of the loan of 12 Hummer H3 vehicles provided to several state agencies for use in hurricane relief and recovery since last fall. The vehicles, built at GM's Shreveport plant, were provided to the governor's office last fall after Hurricane Katrina, then given to local agencies for transporting goods and personnel.

Bush, who signed a corporate contract with Hummer before he was drafted by the Saints, will be present for the announcement, along with Brigadier General Hunt Downer of Louisiana's Office of Emergency Preparedness, Slidell Police Chief Freddie Drennan and Slidell Mayor Ben Morris. Bush also will donate to the Slidell Police Department several autographed items which will be used to raise money for local charities Community Christian Concerns, Children's Advocacy Center, Crisis Pregnancy Help Center and Youth Truth.

"This is step three in a 10-step process to try to do my part in the rebuilding of this city following Katrina," Bush said. "This donation of the 12 Hummers goes right to the heart of helping first responders, the critical men and women that are on the front line saving lives in the event of an emergency."

Downer will accept the handoff on behalf of the governor's office.

"I'm real excited," Downer said. "It's fantastic. One, to have General Motors, a corporate entity of Louisiana, and these Hummers all were made in Louisiana. And two, Reggie Bush is a new Louisiana resident. He's here to play football in Louisiana. The New Orleans Saints are a football team, but they also are an economic entity. This brings it all together."

Slidell Police Department spokesman Capt. Rob Callahan said Slidell was one of the areas hardest hit by Katrina and certainly can use the help.

"Although New Orleans gets most of the press, people have really forgotten about Slidell," Callahan said.

"Hummer donated two of these vehicles to Slidell. We've used them for the last year, and we will continue to use them. We're grateful to General Motors for allowing us to have them. We're really appreciative to Reggie Bush. For him to come to the north shore to donate his time and these items to us means a lot."

Last month Bush and adidas donated $50,000 to Holy Rosary Academy, which was devastated by Katrina, to help the school remain open. Then Bush and adidas donated $86,000 to Tad Gormley Stadium for repairs and renovations.

[via NOLA]

Used Car Loans

noreply@blogger.com (Dr. Wizvax) — Fri, 14 Jul 2006 09:25:00 +0000

by: Matthew Bourne

Want to buy a used car but just don't have the funds sat in your bank account? If so, why not consider taking out one of the many used car loans available on the loans market.

Used car loans are specifically designed by loans companies to provide used car buyers with a competitive finance arrangement through which to purchase a used car. Flexible loans terms are available from used car loans companies, as well as low APR deals suitable for used car purchases. Used car loans of up to £20,000 can be arranged on an unsecured basis, with loans companies offering higher loans amounts if security is supplied.

Advance plan your used car loans

When buying a used car it pays to do some advance planning and arrange your used car loan ahead of the search for a used car. There are many loans companies out there offering loans for used car purchases, so it makes sense to shop around to get the best loans deals for buying a used car. Look for car loans that are flexible to your needs and offer a low APR, so your monthly used car repayments on any loans taken out won't be sky-high.

As with all types of loans, you should first determine how much you can afford to borrow on loans to buy a used car. Loans calculators are available on the Internet and can be used to calculate loan and repayment amounts in accordance with different APRs. It is important to take into account other financial commitments too, including other loans, when calculating the loans amount that you can comfortably borrow to purchase a used car.

If you intend to buy your used car from a used car trader where they offer car loans / finance for their used cars, then do make sure that the loans deal you sign up to is better than the loans deal that the used car trader can offer. The APR rate is the critical thing here. On car loans tailored for used car purchases the APR rate - i.e. the rate of interest you'll pay on top of the used car purchase price - can be as low as 6%. Finance loans deals through used car traders may have a higher APR, so pushing the total cost of buying a used car up to an unacceptable price.

One final thought. When negotiating the price of a used car with a trader, they may accept your lower offer providing that you take up one of their loans to finance the used car purchase. If this is an option then do check the terms and conditions of their loans carefully, paying special attention to the loans APR rate, as the savings from your negotiation on your used car may not be as attractive as first imagined when you consider the final costs attached to their loans!

About The Author

Matthew Bourne has been working in the loans, mortgage and life insurance industry for over 10yrs and is currently working for http://www.loansgalaxy.com/car-loans/

[via ArticleCity]

Car Loans for Students

noreply@blogger.com (Dr. Wizvax) — Fri, 14 Jul 2006 09:24:00 +0000

by: Jacob Andrews

Are you sick of public transportation? Perhaps you are tired of having to walk to class in wet, cold weather? Maybe you need a car to get to and from a new job that you just started. If you are a student seeking an easier means of getting around, there is answer! You can apply for a student car loan, even if you have no credit or bad credit!

Student car loans have two major advantages!

1) Buying a car will help eliminate all of your no-transportation headaches!

2) Utilizing a car loan to purchase a new car will help build your no credit or bad credit history into a positive one. Every monthly payment you make for your car loan will be reported to every major credit reporting agency.

I have no credit. How am I going to get approved for an auto loan?

With most car loan companies, being young and having no credit is not a factor when it comes to granting approvals. How come? Because a car loan is a secured type of loan. The lenders are protected by the fact that if your loan goes into default, they get your car.

What about bad credit? How do students get approved for a car loan with poor credit?

Same thing as getting approved for financing with no credit! Students with bad credit should not have a problem getting a car loan with bad credit because the lenders are protected

About The Author

Jacob Andrews is the webmaster/marketer of Premier Auto Financing. Premier Auto Financing provides auto loans for people with good and bad credit. You can use your loan to buy from a private seller or from a dealer.

[via ArticleCity]

Car Loans

noreply@blogger.com (Dr. Wizvax) — Fri, 14 Jul 2006 09:21:00 +0000

by: Peter Kenny

Buying a new car is one of the single biggest purchases most people are likely to make in their life. Other than their home and maybe their education, there is not really much personal expenditure that can compare in size to the purchase of a new car. Therefore it is not surprising that most people cannot afford to pay for a car outright. This is so even if they have a very good income. It is a simple fact of life that to buy a new car, most people will need to use a car loan to do so.

If you are considering taking out a car loan to finance the purchase of a new car, then you should make sure you are completely aware of all the financing options that are available to you so that you get the best deal available. It is highly likely that to car dealer that is selling you the car will have some sort of financing options available to you. This may be in the form of a loan to purchase the car or leasing options that are also available. You should be clear of the vital difference between a loan and a leasing arrangement. With a loan, you are borrowing the money so that you can purchase the car. With a lease, you are only paying for the use of the car, and at the end of the leasing period, you simply return the car and that is the end of the arrangement.

There are some leases that will give you an option to buy the car at the end of the leasing period. If you borrow the entire amount for purchase of the car, it is likely that your monthly repayment amounts on the car loan will be higher than those for a lease, this is because you are paying for the full price of the car and at the end of this time, after you have made all the repayments on the term of the loan, you will be the owner of the car.

There are a number of factors that you should look at when deciding which car loan to opt for. First of all, you should know that you do not have to accept the financing options that the dealer offers you. You can also shop around with other lenders, such as banks, and make sure you get the best deal on offer. Car loans are expensive and you should be willing to look into the various options that are available before settling on any one option.

About The Author

Peter Kenny is a writer for creditcards-gb. For additional articles and an extensive resource for everything about credit cards, please visit us at http://www.creditcards-gb.co.uk and http://www.creditcards2go4.com

[via ArticleCity]

Small device secures car loans

noreply@blogger.com (Dr. Wizvax) — Fri, 14 Jul 2006 09:13:00 +0000

One day each month, Vista resident Sheena Casto punches a six-digit code into the blinking device under the dashboard of her 2000 Saturn SL. Though it resembles a radar detector, the little gizmo is her key to a lower interest rate and ---- when she makes her monthly payment ---- to another 30 days of uninterrupted driving.

The device is also a key to one of the thorniest dilemmas facing car dealers and finance companies: whether to offer loans to customers with low credit scores. Financing often helps a dealer sell a vehicle that might otherwise be out of the customer's reach. But when the driver doesn't repay the loan, the dealer's profit can easily be outweighed by the costs of collection or repossession.

Martin Oleksyk said that logic used to mean lost sales for his group of seven Saturn dealerships in Temecula and San Diego County. The group didn't offer in-house financing, and the finance companies it used were not willing to offer loans to all the potential customers.

But starting about three years ago, the group began offering loans to customers who were turned down by the other lenders. To safeguard those loans, the dealerships install "On Time," a small device made by Payment Protection Systems Inc., of Temecula.

The device, about the size of a cigarette pack and typically mounted just under and to the right of the steering column, flashes yellow when a payment deadline approaches. After paying, the customer calls the lender and gets the code that will allow the car to start until the next deadline.

When customers miss payments, the device prevents their cars from starting.

"Most of these people have a hard time budgeting," said Oleksyk, who manages the new finance program at the Saturn dealerships. "They have the ability to pay. They have the capacity to pay. They just don't know how to pay."

Starter-interrupt devices are becoming a popular way for lenders to ensure they're repaid, and many borrowers seem willing to accept them to get into nicer cars, get away with smaller down payments and qualify for lower interest rates, according to dealers and device manufacturers.

Among cars with On Time installed, only about 2 percent of the loans go delinquent, according to Mike Simon, chief executive of Payment Protection Systems. That compares with an average of about 15 percent among all cars, Simon said.

The Temecula company is one of three manufacturers that dominate the market, along with PassTime in Littleton, Colo., and Pay Technologies of Cleveland, Ohio. People in the industry estimate that starter-interrupters are installed in 500,000 to 1 million cars in North America today.

Payment Protection Systems started off in Fallbrook in 1989 as a maker of anti-theft devices. Such products still account for roughly half the company's revenue, Simon said. In its newest anti-theft system, the car won't start unless a radio chip attached to the owner's key is within several yards.

Simon said a conversation with a dealer in 1996 prompted him to dream up the company's first starter-interrupter as a means to ensure loan repayment. With the On Time brand gaining wider recognition, he said he's thinking through other applications for both radio chips and starter interrupters. But for now, the company doesn't make any of the better-known systems used for law enforcement, such as one that keeps convicted DUI offenders from starting their cars when it detects alcohol on their breath or in their sweat.

The company has been in an office park on Temecula's west side since 1999, when it outgrew its space in Fallbrook. It still has just 12 employees, including sales representatives in Temecula and elsewhere in North America. It's planning new sales offices in the United Kingdom and Bahrain, Simon said.

Dealers or lenders generally pay $220 to $260 for each On Time. In a few cases where the lender insists and the driver agrees, the dealer installs a version of On Time with a tracking device that lets him or the lender find the car.

Dealers and auto-industry consultants say the market is in its infancy. Initial skepticism about the products is starting to fade, and the first handful of large auto lenders have begun to accept On Time in just the last 12 months, Simon said.

One potential client is Bob Baker Chevrolet Subaru in El Cajon, said general manager Loren Campbell, who is also a board member for the California Motor Car Dealers Association. After several months of collecting feedback from other dealers, Campbell said, he'll probably begin installing On Time later this summer. He plans to leave the device on each car for just the first few months after the sale, while the buyer is making "pick-ups," or supplemental down payments.

Aside from Oleksyk, finance managers at Temecula-area dealerships say they don't use the starter interrupters. Southwest County is a fairly prosperous area where many residents have recently bought new homes; since they tend to have strong credit scores, the devices probably won't find a large market here, one local finance manager said.

But on a national scale, the three major manufacturers of starter-interrupters report double-digit increases in sales so far this year, compared with the same period a year ago.

Some 200,000 of the On Time devices are in use today, he said.

Dealers say they install starter interrupters are installed most often in used cars. Oleksyk said he has installed about 100 of them over the last three years, in connection with sales ranging from $4,000 to $10,000. But he also said he foresees a market for the devices among new compact cars, which are priced at less than $15,000 and whose buyers frequently lack a solid credit history.

Consumers with poor credit often are faced with interest rates of more than 20 percent ---- nearly triple the rate drivers with good credit can get. They frequently have down payments equal to 10 percent to 20 percent of the purchase price, while buyers with good credit can purchase a vehicle with little or no money down.

Among credit-challenged drivers who otherwise face interest rates of 20 percent to 25 percent, the On Time device usually convinces lenders to lower the rate into the range of 15 percent to 17 percent, according to Simon.

Casto bought her Saturn last year from Oleksyk's dealership. She was going through a divorce at the time, and her credit history reflected the repossession of her estranged husband's car, she said.

As a result, Oleksyk's finance companies considered her a high-risk borrower and demanded interest rates higher than she was willing to pay, she said. But by agreeing to use On Time and borrowing from the dealership, she shaved several points off the rate, she said.

Manufacturers say the device wonít kill the engine while the car is being used; it will only keep the vehicle from starting. Even consumers who are late on payments are allowed emergency starts, sometimes for 24 hours, the companies say.

Still, a spokesman for the Consumer Federation of America said he doesnít like the idea of giving a third party control over a driverís vehicle.

"It's a rather draconian measure," said the spokesman, Jack Gillis, author of "The Car Book." "What these companies are able to do is sell cars at virtually no risk to themselves, with all the risk to consumers."

At the Saturn dealerships, a few customers have been indignant at the suggestion that they accept a starter-interrupter as a condition for a car loan, Oleksyk said. One threatened to rip it out; that would've left him unable to start his car, but was nevertheless a hint that he probably wasn't a good credit risk, Oleksyk added.

For her part, Casto said she doesn't mind the starter-interrupter at all. It's only fair that a lender get its money back, she said.

Simon said the devices help both the dealerships and the borrowers who might not otherwise get a loan.

"We're going to help a lot of people get a better interest rate ---- and car ---- than before," Simon said.

[via North County Times]

Atlanta car loan fraud ring busted

noreply@blogger.com (Dr. Wizvax) — Fri, 14 Jul 2006 08:15:00 +0000

Six Atlantans were arrested July 12 and two others already in custody have been named in connection with a car loan fraud ring operating under the name "Xquisite Empire" that bilked lenders for $2.4 million.

William Marshall, 39, and Kenneth David Harvey, 38, both of Atlanta, who are alleged to be the leaders of the conspiracy, are already in custody on unrelated charges. Arrested today were: Dartez Daniels, 37, Sheena Mullins, 22, Keyomo Butler, 35, Tara Brown-Ferrell, 35, Sheer Godfrey-Fields, 34, and Melissa Fields, 35, all of Atlanta.

Beginning in early 2002, Marshall and Harvey allegedly created a scheme to defraud lenders by fraudulently obtaining 224 high-end luxury vehicles valued at $11.2 million, using more than 50 so-called "straw" purchasers to buy or lease the vehicles. Marshall and Harvey created a company called "Xquisite Empire," which ostensibly was in the rental car business, but had no legitimate income from rental cars.

Marshall and Harvey allegedly supplied straw purchasers with false credit information, which the straw purchasers subsequently listed on loan applications. Marshall, Harvey, and others instructed each straw purchaser to buy as many cars as possible within a 30 day period to prevent prospective lenders from learning about the straw purchasers' true liabilities through seeing the most recent loans relating to fraudulent purchases appear on credit reports.

In return, Marshall and Harvey paid the straw purchasers fees for obtaining the vehicles. Marshall and Harvey took possession of the vehicles, turning them over to others who wanted to conceal their ownership of the vehicles. When the payments to the lenders stopped, and the lenders tried to repossess the vehicles, the straw purchasers did not know where the vehicles were. Only Marshall and Harvey knew who the actual possessors were.

"This fraud scheme was based on luxury cars and lies," said U.S. Attorney David E. Nahmias. "The conspirators allegedly designed the scheme to rapidly and fraudulently acquire large numbers of luxury vehicles through straw purchasers. The defendants then sold the cars to others who were unknown to the original lenders, leaving the lenders with very little recourse."