Four top factors that influence the price of used cars

US-PDGov

One thing that both buyers and sellers of used cars can agree upon is the fact that the key to buying and selling pre-owned vehicles is figuring out their value. Once the debate about what is important when buying used automobiles is out of the way, it is then time to determine what exactly the true value of a used car is. In order to decide what that value is, there are four main factors that should be considered.

 

Just dropped in to see how my condition is

First and foremost, the most important factor to go over when figuring out a used car's value is condition. While that might seem obvious to you it doesn't make it any less true. You're not going to buy a used car if it's in no condition to be driven and if you are you're not going to pay a whole lot for it. On the other hand, a used car that is in near mint condition is going to be worth a whole lot more than a car that's dented up or has some scratches on it.

 

How many miles does it get?

After the condition of a used car has been determined, the next used car price influence is mileage. Every used car has been on the road for a different amount of time and a car that has barely been driven will be worth quite more than one that has been traveling the countryside clocking miles on the odometer.

 

As my grandpappy used to say, old reliable

Reliability plays a big part in determining a used car's true worth because drivers want to be behind the wheel of a car that they can trust. When figuring out how reliable a used car is, look to the car's maintenance records to see how often the car was brought in for routine service. Check whether the car suffered any recurring or major repairs. If reliability is a grey area, then the only thing that can lead to is negotiation.

 

Always a popularity contest

Popularity contests aren't just reserved for high school prom king and queen contests. In the world of used cars, popularity also reigns supreme. A used BMW or Cadillac is going to cost more than a lesser vehicle brand, and if price is an issue then going for a less popular vehicle make or model is the answer. If you can understand the factors that influence a used car's value, you should have no problem buying or selling a used car!

About the author: Donald loves to play with his children and pet dog, he enjoys sharing his knowledge of cars with the readers of his blog, and also shares his extensive car knowledge at other sites as we like hertzcarsales.com. Other then cars, Don enjoys watching the Giants play football.

How much should you spend on your first car?

By Christina Jones

Buying your first ever car can be incredibly exciting, but you might also find it very stressful and a little bit scary. This is because you’ll probably be parting with more money than ever before when investing in a single purchase and you’ll need to choose a car that you’ll still be happy to use a few years down the line. There are a million and one things you need to take into account when choosing your vehicle, from its general appearance to its inner workings.

The full amount that you spend on your vehicle will entirely depend on how much money you actually have available. So, in order to make sure you don’t accidentally overspend on your first ever car, here are a few pointers when it comes to setting your budget:

1.   Be realistic

When you’re going into your budgeting process, always be realistic with yourself. If you know for a fact that you haven’t got a lot of money to spend, don’t go looking at cars that are worth thousands and thousands of pounds, you’ll only be taunting yourself. You should always figure out the logistics of buying your first car before you actually go to look at any, as this will ensure you don't get your heart set on anything that's out of the question.

2.   Plan everything

You should sit down and examine your finances carefully before buying your first car. Find out exactly how much 'spare' money you have every month and see how much you have in the way of savings. This will allow you to come up with a suitable budget for your first car. Generally, though, you don't want to spend too much on your first car as there will be a higher chance of you being involved in a car accident when you’re a new driver and aren't that confident out on the roads yet.

3.   Consider finance

Having said that, if you take finance options into consideration you might be able to get a car that wouldn't usually be available to you. This is because you will be able to spread the cost over a number of months, and you can often find finance deals that offer interest free periods. If you were able to pay off your loan before this period ended, you wouldn't need to pay for any added interest.

4.   Go second-hand

In this day and age, buying a brand new vehicle makes little sense for most people. New vehicles cost so much more than second hand or used cars, and you can get some amazing models that are just a few years old when buying second hand.

5.   Research fuel consumption

Once you've found a car you like the look of you should always look into its fuel consumption before buying it. This will give you an idea of how much you'll need to spend on petrol or diesel each month. Cars with higher fuel consumptions will obviously end up costing more to run, which can run up your bills every month even with an interest free finance option.

6.   Look into insurance costs

Certain cars will cost more to insure than others, so don't allow this to take you by surprise after purchasing a vehicle. It may be worth consulting a number of different insurance companies as well so that you can find out what the best price for your insurance would be with such a car.

How much will you be spending?

Christina Jones is a freelance writer, focusing on the finance and motor industries with particular interest in UK car credit and finding the best car loans.

Overview of commercial vehicle loans

Commercial vehicle loans are loans used to finance automobiles for companies. The reasons for seeking out and acquiring a commercial vehicle loan vary and may include 1) cash flow requirements 2) operational need 3) optimization of asset value etc. Commercial vehicle loans can be obtained from financial institutions specializing in corporate financing and loans as well as several other sources.

Other means of financing commercial vehicle loans include business to business loan(s), consumer loan(s), and government loan(s). If a company has decided to choose the loan option to finance a commercial vehicle, then other options such as capitalization, retained earnings, redirection of assets etc. are not used for that particular vehicle. Some examples of vehicles for which a commercial vehicle loan include the following:

• Construction vehicle(s)

• Delivery automobile

• Outcall service logistics

• Staff transportation

• Disabled persons relocation

• Other service related cars, trucks etc.

Types of commercial vehicle loans

Size and type of commercial vehicle loans can vary dependant on the company's needs. Smaller businesses may only need a small vehicle for service call transportation or staff relocation. Medium and larger businesses may require a whole fleet of vehicles or more expensive heavy-duty vehicles depending on the nature of the business. 

For example, landscaping companies may require trucks to pull trailers and health care providers may obtain commercial vehicle loans for ambulances. The following illustrates the types of loans that may be applied for and/or acquired by a company to finance a commercial vehicle.

• Private loans

• Bank loans: Bank loans

• Municipal, State or Federal loans

• Asset backed loans:

• Business to business loans:

• Public loans

Applying for a commercial vehicle loan

To apply for a commercial vehicle loan gather company financial statements, loan application documents and operational purpose statement(s) for the loan. It is likely lenders will require some kind of documentation to verify capacity to pay back the loan. 

It the loan is privately financed, such documentation is not necessarily required, however knowledge and familiarity with the lender in addition to a contract may be asked for. A checklist of items that may be required is listed below. Sometimes an in person interview will be required to obtain a commercial vehicle loan. In such cases being well prepared and organized can assist in supporting the commercial vehicle loan application's chance of being approved.

• Loan application

• Company financial statements

• License and insurance documents

• Titles, deeds and account(s) information 

• Company registration and/or good standing forms

• Market analysis or vehicle feasibility forecast

Ways to find a good deal on a commercial vehicle loan

As with all for profit business endeavors, keeping costs down and profit up is an ongoing concern. For this reason finding a good deal on commercial vehicle loans is often a priority for businesses seeking such loans. To find the best, or good deals on commercial vehicle loans whether they are new or used cars, consider applying business principles that encompass more than just interest rates on the loan. Moreover, although interest rates are important, there are also other important factors to consider such as those mentioned hereafter. Optimizing loans by considering the implications on business operations, profitability, financial statements, taxes, and asset value are all important to the business with efficiency and effectiveness in mind.

• Interest rates

• Compounding periods

• Loan terms

• Affect of loan on company financials

• Benefit of loan in comparison to cost

• Asset purchase(s) with the loan

Summary

Commercial vehicle loans are used to pay for company assets used for specific functions relating to the use of the vehicle. A wide range of businesses make use of vehicles in their business operations. Since some vehicles can require a sizable use of liquid assets, in some cases, it may be advantageous or necessary to obtain a commercial vehicle loan. 

A multitude of commercial vehicle loan options exist for companies including those mentioned in this article. When obtaining a commercial vehicle loan it can be wise to consider the loan in terms of a latitudinal affect on the company rather than just financial. This means multiple considerations that can influence the businesses profitability and efficiency may be considered when seeking out financing.

Why is it harder to get a credit card than an auto loan

It is harder to get a credit card than an auto loan when the two types of loans are subject to different lending terms, standards and regulation. Additionally, auto loans and credit card loans can vary enough to make credit card loans prone to more lending risk than auto loans. Since lending risk is correlated with loan availability, a higher lending risk for credit cards makes it harder to get a credit card than an auto loan. It is not always the case that credit cards are harder to obtain the auto loans, for example with  borrowers who have excellent credit. For the times where it is harder to get a credit card than an auto loan, the following are contributing factors.

• Collateral

Auto loans are collateralized by the vehicle they are lending money for. If the loan goes into default, the vehicle can be repossessed.. Although this does not eliminate all financial risk for the lender, it does reduce it. Unsecured credit cards do not have the same asset protection for financial institutions, and the lower the credit score of the borrower, the higher the risk associated with lending to them. Thus, under these conditions, it is more likely an auto loan borrower may have a greater chance of receiving an auto loan than a credit card for the same amount.

• Title

Another financial security feature available to auto loan lenders is withholding of title. This can also make it easier to get a car loan than a credit card. For example, if someone buys a car with dealer financing, a condition of purchase may be that the dealership retain title of the vehicle until a certain amount of payment has been made on the vehicle. By retaining title to the vehicle, the financier or dealership protects itself from legal issues pertaining to the reacquisition of the automobile should the borrower default on their payments. Title loans are another type of collateralized lending that charge high rates of interest and provide collateral to the lender thereby lowering the risk and increasing the incentive for making the loan.

• Regulation

It can be harder to get a credit cards than loans on new, or used cars because of regulation as well. Although all types of lending are subject to similar and in some cases the same federal regulations, some of the stipulations within financial regulations that apply to credit cards make it harder for credit card lenders to hedge risk with fee and agreement terms modification. For example, the Credit Card Act of 2009 initiated several rules that limited credit card companies ability to acquire profit through billing cycle methodology, charging of fees and raising of interest rates.

• Financing

Vehicle financing is also quite diverse as automobiles are often directly linked to the application for financing whereas credit card purchases are not.  In other words, the auto loan is just for an automobile whereas a credit card is not. This makes negotiating lending terms and agreement easier because there is less uncertainty about the nature of the purchase.  Since auto loans can be financed via a dealer network, the policy regarding lending may also be different than with a financial institution as the dealership is acting as a broker. Moreover, brokers acting as independent agents may more easily approve loans via dealership policy.

Sources:

1. http://bit.ly/aQ2h9y (Federal Trade Commission)
2. http://bit.ly/6NYgoQ (FTC Credit Card Lending)
3. http://bit.ly/YosTc (White House)
4. http://bit.ly/dnkH9A (Federal Deposit Insurance Corporation)
5. http://bit.ly/cry9oe (FDIC: Auto Lending)

Tips for financial planning in your 20s

Anyone in their 20's who are thinking seriously about financial planning may be ahead of the curve in one sense, but it's probably just as realistic to realize there's lots of time to worry about financial planning later. However, ridiculous financial planning might seem in the 20s though, it can do wonders later in life.

Perhaps it's a good idea to think of it like tickets to the Super Bowl or a really good concert, both of which require just a little advance planning. Financial planning in the 20's is different from that in other periods of life. Risk, fun and experience are often more typical pursuits of '20 somethings', and responsibility, fiscal discipline and end of life savings are not always a high priority.

Investing, and debt management are two of the major part of financial planning in the 20's. What's more investing in the things one loves is a good way to invest in the 20's, after all what 20-29 year old doesn't like spending money, and some 20-29 year olds might simply dismiss the word 'retirement' as a meaningless concept that applies to old people only.

To spend 'right' in the 20's requires just a fraction of the amount of time spent studying for a test or time spent with friends or playing sports etc. By doing this and thinking about what to buy well, one is generally helping oneself prepare a better future. This article will illustrate a few ways to 'buy right' i.e. invest in things that are fun and fiscally prudent at the same time, in addition to providing investing and debt management tips.

Investments for the 20'S

• Automobile: Automobiles can be more than just an exciting way to get around town, they can also be wise investments if chosen well. Certain vehicles including some used cars such as the Subaru Outback, Honda Accord, Mini Cooper and Toyota Prius all retain their value well according to research from CNN Money. Vehicles that retain retail value over time can also be dependable, and long lasting in addition to bringing back a decent resale price. Also, such vehicles may be used to help finance other things such as tuition loans, and asset backed mortgages.

• Education: A well chosen education can lead to a promising career that earns many thousands a year. Even though the upfront cost of education can be expensive, it is still an investment and can pay off in the future. The more the education chosen is in demand, the greater the potential return on the investment.

• Time: Time is a commodity in the 20's just like any other decade of one's life. Investing one's time in the simple act of thinking about investing is an investment. Not only can this build an awareness of money but time spent in employment yields cash. Cash, as everyone knows, can do a lot of things.

• Home: Home's that are located in working class neighborhoods and that need a little work can be affordable to a working 20 something. With as little as 2% down-payment and a steady job, a home in the 50K-100K range diverts rent money that would probably be paid anyway into a home that may appreciates in value and save capital. Most people have to live somewhere, so why not make a home out of it.

• Individual Retirement Account (IRA): Open one of these and throw away the key, just getting one is an accomplishment in the 20's. If this can be achieved, don't worry too much about meeting the maximum annual contribution, a few year later one might thank oneself and start contribution more to an already set up account.

If the above investments can be accomplished by age 29, one may be on track to bigger, more retirement related investments. It really isn't necessary to save for retirement in the 20's, but it is a good idea to invest in something. The following tips may help one focus on things like where to come up with down-payment money for a car or house, how to find good jewelry and a good education.

Investment and debt management tips for 20-29 year olds

• Save 5-10%: Just do it. 10% of one's beer money, music money, movie money, clothes money etc. can translate to 20% down the road and it doesn't hurt that much. This 5-10% can be used to fund an IRA, a down-payment on a good car, or any other kind of investment.

• Avoid Credit Card Debt: It may not seem a lot at first, but credit card debt can pile up before long. Pretty soon afterward, debt can get out of control.

• Transfer Credit From Community College: Since community colleges are cheaper, it can dramatically lower the cost of a University education to transfer credits from a community college.

• Live at Home: Living at home may not be ideal, but just a year or two of living at home while working can lead to potentially large savings especially if the parents don't charge full or any rent.

• Talk with Jewelry Appraiser(s): Chatting with Jewelry appraisers who love gems, and precious metals can be interesting and informative. They can inform one of the best jewelry and where to get it. Theoretically, any jewelry is an investment, but some jewelry can be a better deal and hold value better.

• Surf the Internet: The Internet has lots of car listings and automobile advise. Searching for a list of cars that retain value will help one buy a 'set of wheels' that last a long time and keep their value. Not only could such a car cost less in maintenance, it could pay back a little when it's time to trade in or sell.

• Ask Parents: It's not always fun asking parents for advice, but they do know things sometimes. If one grew up in a house, a parent may be able to help with understanding the mortgage process and what is required. Mortgage loan officers at mortgage banks can also provide details of what is required.

Financial planning in the 20's involves investing, debt management and a little fiscal responsibility, but the responsibility doesn't have to be painful and it may be a benefit down the road. Sometimes in the 20's or 30's life might have a few unpleasant surprises, the dream job may not pull through, one's plans may not turn out as expected. By investing and thinking about investing, one is preparing the mind for the future of life.