Our car experts weigh in on financing, maintenance, and everything in between!
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!
Buying a car can be costly and time consuming. If you are in the market for a new vehicle and want to use an auto loan for purchase, getting pre-approval can save you time and money. Here are a few reasons why you should take the time to go through the pre-approval process.