Our car experts weigh in on financing, maintenance, and everything in between!
You need a car but maybe your credit isn’t that great, or your credit history is limited (read more about boosting your credit score here). You sat down during Happy Hour, did the math, and wrote down all the numbers on your cocktail napkin. Now you’ve got a basic idea in your head of what you can afford.
Cars have gotten really technologically advanced in the past decade. These days, you're basically driving a computer on wheels! When you’re looking to purchase or you’ve just purchased a new vehicle, there may be a few features that you are unsure of how to use or what they actually do. One of the most common that we get asked about is the ECO button or sometimes labeled ECON. The ECO button does make your vehicle more economically efficient, but to what degree varies on your make/model. It is important to research your exact vehicle and check the manufacturer’s website to not only learn how to make your vehicle run efficiently, but to make use of all the features you have at your disposal.
Imagine you're in rush hour traffic on your morning commute, and as if that isn’t bad enough, a large dump truck is in the lane right beside you. Once the truck gets moving, a stray rock comes crashing into your windshield. Should you repair it or replace it?
To understand how you can repair your windshield, we must first take a look at the material it is made of. Finding the perfect type of glass for windshields was no easy feat. Housing glass was inexpensive, but too brittle when broken, making it quite dangerous. Tempered glass couldn’t hold up to all the normal wear and tear. And, plastic wouldn’t remain clear enough long-term. So, the solution to windshield creation landed on laminated glass.
Fuel economy is one of those buzzwords surrounding the purchase of a vehicle. And while fuel efficiency is important, what is often overlooked is fuel grade and type. Most cars still run on gasoline today, but there are other alternatives available on the market. We’ve broken down several to help inform your driving experience.
Have you ever been at the gas pump, looked at the choices in front of you and wondered if you’re picking the right one for your vehicle? If you’re not a car enthusiast or someone who dabbles in car hobbies, all gas options may seem like a no-brainer. You pick Regular, Mid Grade or Premium. Most drivers base their decision on price, and choose Regular. But, is that really the best option for your car? Will choosing premium help your car run more efficiently and burn cleaner? It’s not always that simple. First, let’s break down what the different options mean.
Car accidents can be traumatizing, but the aftermath doesn’t have to be! The last thing you should be stressing about is the car - take care of yourself physically first, and above all. The first step in dealing with the vehicle-related fallout is to research the value of your vehicle before the accident. “Totaled” is just a buzzword insurance companies use to qualify an accident that has left your car in a condition in which the repairs will cost roughly 75 percent or more of the vehicle’s worth (this number varies by state, however, and may be as low as 50% or as high as 100%). This term is only applicable if you file an insurance claim. Who was declared at fault in the accident is an important consideration. If you were at fault, your insurance policy should at minimum cover the other driver's vehicle and any associated medical bills, up to your coverage limits; you're responsible for any damages beyond those limits. If you want to avoid filing an insurance claim altogether, you and the other driver can agree that you'll pay them directly and bypass your insurance company. If you were at fault, but only have liability coverage, you would be responsible for any repair costs for your vehicle. (If you aren't sure what all the different types of insurance policies include, check out our blog post where we break it all down for you!) Depending on the value of your vehicle and the damage sustained, it could be more cost effective to pay out of pocket for your vehicle's repairs, or simply choose to salvage the vehicle and purchase another. If you were not at fault in the accident, the responsible party's insurance will handle the claim, or once again, the other driver may ask that you provide an estimate for repairs and let them pay you directly, rather than file an insurance claim. Overall, you really have three options after an accident: File an insurance claim. If you have comprehensive coverage and/or gap insurance, filing a claim will probably be your best option, especially if you have an existing loan. You will file a claim with the insurance company (yours or the other driver's, depending on who was at fault), and they will appraise the value of your vehicle and send you a check. However, after you have received the appraisal amount but before you accept the payout, make sure you have done your research to be assured the amount they are offering is fair. If you find that there is a large difference in the vehicle's value based on your research versus what the insurance company has offered, find a third party appraiser. But make sure the value is a large enough difference to matter, because you will be responsible for paying the appraisal fee. Pay to fix it. If your car is older and not worth a lot of money, it may be more cost efficient to pay out-of-pocket (for example, you may choose to repair the mechanical damage to get your car in safe driving condition, but opt not to repair cosmetic damage). Weigh your options and crunch the numbers. You may find that it's most cost effective to fix it without filing a claim and either sell it or drive it until you can buy a new car. Salvage it. If you don’t have enough coverage to cover a totaled vehicle, you can sell it to a salvage yard or dealership under a salvage title. You should only consider this option if you think you will get more from selling it than filing an insurance claim. One final consideration you shouldn't overlook is gap insurance. Say you bought your car brand new and spent $20,000. After the first year, your car may only be worth $15,000, but you may still owe $17,500. If you are involved in an accident, the insurance company will only pay you what your car is worth: $15,000--you will be responsible for paying the remaining $2,500 to your auto lender, unless you have gap insurance, that is. Gap insurance is very important, especially if you buy new, or the term of your loan is spread out over several years. If you're in this situation, you're leaving yourself vulnerable by being upside down in your loan (owing more than the vehicle is currently worth).
The car buying process can be overwhelming if you don’t speak the language. You've probably seen letters like SE, L, LE, LX, etc. on the backs of vehicles, but do you know what they all mean? These are all examples of trim levels in different makes and models of cars. The make of a car is simply the car manufacturer, and the model is the actual car type that the manufacturer produces. An example would be a Toyota Camry, Toyota being the manufacturer, or the make, and Camry is the model. The trim level goes one step further in identifying the car. Each model will have several different trim levels that come with different options. The basic trim level will have the least amount of features, and it will be the most affordable. The more options the vehicle has, the more expensive it will be to drive off the lot. Each trim level has different feature options, then there are also stand alone options that can be purchased additionally. The different options that come standard with each trim level are dependent on the manufacturer. For example, some Hondas may offer a backup camera as a standard option even for their base model, while some Ford models may require you to purchase additional features to get this option. While each manufacturer has different standard features, it isn’t that complicated to focus your search. Here are a few common trim breakdowns: L - Entry-level grade LE - Luxury Edition S - Sport SE - Sport Edition SLE - Sport Luxury Edition XL - Executive Luxury XLE - Executive Luxury Edition DX - Deluxe CE - Classic Edition When searching for a vehicle, decide what features are important to you, and instead of comparing just the make and model, compare the features offered in each trim package. If you are more worried about affordability than luxury, you should opt for the base trim package, and if budget is less of a concern for you, opt for the fully-loaded options! While this isn’t a one-size-fits-all approach, it will help you narrow down your search more efficiently than comparing only by the make/model.
Are you unhappy with your current auto loan? You’ve been making payments, but the interest rate or your monthly premium is too high (or maybe both are too high). You should consider refinancing. Refinancing isn't just for bigger purchases with longevity, such as a mortgage. Auto loan refinancing has the potential to save you thousands over the term of your loan. For example, if you have an auto loan for $20k at an interest rate of 6 percent to be paid over 60 months, you will pay around $3,200 in interest alone if you make the minimum monthly payment for all 60 months. However, the same loan amount to be paid in the same time frame at half the interest rate (3 percent) will save you $1,300 over the life of your loan! You just have to decide if the savings are worth the additional paperwork of refinancing. And, we think they could be! If you answer yes to any of the following questions, you may want to consider refinancing: Do you want a better interest rate? Interest rates fluctuate each year. If interest rates have dropped across the market since you bought your vehicle, and your credit health has stayed the same or improved, you may be a good candidate for a better interest rate. Do you want/need lower monthly payments? If you are having a difficult time making your monthly payments, you may want to consider refinancing to have the option of extending your loan. This will mean you'll have the loan for a longer period, and it will cost you more in interest in the long run, but you will be able to make lower monthly payments. Just be advised if you make this decision that you will save in the short term but the longer-term consequences will mean you are paying off your car for much longer which means that the debt to depreciation rate will be unbalanced. Can you refinance without penalty? Some loans have a prepayment penalty clause which means you will receive a penalty for paying off your loan earlier than your negotiated term. As long as there is no clause stipulated in your contract, it won’t be difficult to refinance your current loan. If your credit health has improved, you’re not currently upside down in your existing loan and interest rates are on the decline, it could be the perfect time to search for a new loan. Refinancing may take a little research, but in the end it can give you better payment options and save you money long-term!
What the National Traffic Safety Administration (NHTSA) has to say about recalls: According to the National Highway Traffic Safety Administration (NHTSA), over 63 million recalled vehicles were present on the road last year. Only about 75 percent of recalled vehicles ever get fixed. The other 25 percent either are not aware of the recall or they have just neglected to have it fixed according to the NHTSA. The NHTSA is responsible for maintaining the Federal Motor Vehicle Safety Standards. These standards involve anything that is related to the safety and integrity of the vehicle, as well as anything that is related to safety on the road or safety for passengers in the event of an accident. While some recalls may seem insignificant, the National Safety Commission urges you not to overlook them.