Debt Solution Blog

Technology has made the world a vastly different place than what it was even twenty years ago. This can be seen in the way that people communicate – emails, text messages, social networking sites and blogs – and it can also be seen in the way that people shop. No longer do consumers feel limited to what is available at the local mall or shopping district, and if we can’t find what we want in the “real world” we go online.
This applies to the world of finance as well, and there are millions of consumers with banking accounts and auto loans that were created entirely in the online environment. One area in which this is most often seen is in the auto loan industry. Online lenders can offer the same terms or rates and all in a convenient electronic format.
When shopping around for the best auto loan deals, however, it is not advised to head straight to the computer to determine where the best auto loans online offers currently exist. Why not? Because of the problems in the banking and financial industries, the “traditional” lenders such as banks and auto financing companies are beginning to present consumers with incredible offers.
Consider that an auto financing company might be extending interest rates at a point higher than their competition, but they might also be able to get the consumer a few thousand dollars in “cash back” rewards to be used to lower the price of the vehicle. For this reason, all consumers really should spend an hour or two doing the proverbial math to determine which auto loan is going to get them the best total cost.
Remember that “total cost” does not mean the sticker price on the car, but means what the actual total amount the payments will reach in order to pay off the loan. This takes into consideration all of the monthly payments and how much is added to the sticker price through the interest.
For example, the shopper who purchases a vehicle for $22,000 is going to have to add sales tax, registration fees, dealership fees and interest to determine what the total cost for the vehicle will actually be. In this case, should the car have been sold in Connecticut, the tax would have been 6% bringing the cost to $23,320. Title and registration fees would bring the cost up another $300. This means the buyer is not financing a $22,000 loan but is looking at nearly $24,000. If they do not have any cash to put down on the loan they are going to be looking at a payment of around $410 per month for five years. Additionally, they will also be paying more than $5,000 in interest if they get a loan at 7%. Clearly, it pays to shop around between lenders to see who is offering the best interest rates and terms.