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Don't
neglect to find out what kind of interest rate
the auto dealer can offer you if you finance the
vehicle through him. Sometimes dealers use low-interest
loans as one of their come-ons. Check with your
credit union, too, if you belong to one. These
nonprofit organizations can often undercut the
current loan rates that other lenders offer.
WARNING!
Some lending institutions use the Internet somewhat
differently than we describe in the preceding
paragraphs: You can fill out the application form
online, but you must later follow up with additional
forms or even meet with a human representative
to complete the loan. We don't describe these
hybrid loan processes in this chapter.
According
to statistics, the average new car loan is for
$17,000, and buyers use it to purchase a $22,000
car. (The average used car costs $10,000.) Consider
your loan with care and check out several of the
sites that we mention in this chapter or other
promising sites that you may locate as you search
the Internet.
As you fill out an application for an online loan,
you usually need to provide the following several
facts:
-
How long you've lived at your current address
- How
long you've had your current job Your gross income
-
Your mortgage or rent payments
-
Whether you're requesting the loan by yourself
(as an individual) or with someone else (a joint
loan)
-
The car that you want to buy and how much it's
likely to cost
-
How much you're likely to get for your trade-in
Remember
that these financial institutions make their money
by loaning, so they want to offer you a loan.
To get a quick, positive answer, however, you
generally need a relatively lengthy and relatively
strong credit rating.
Fast
Financing through eAuto
The
eAuto Web site (www.eauto.com/carfinsvc.shtml)
offers you financing services (or links to services)
that enable you to get your financing in place
before you approach the actual purchase. The eAuto
site also points out that you get additional benefits
if you finance with eAuto online: The rates are
low; you make no down payment and pay no fees
or closing costs; you get your answer in a few
hours and the money, in most cases, the next day;
and you can buy from any franchised dealership
of your choice.
Go
to the eAuto Web site and click the Click here
to get a FREE rate and payment quote link. You
then go to the CarFinance.com
Web site.
Fill
in the information that the E-Loan form requests
and click the Search button. You then receive
a quote of monthly payments that the company bases
on several loan periods.
If
you scroll down the page, you find a short form
that you can fill in to actually apply for a loan
through the company. According to eAuto (and for
simplicity, we're just referring to eAuto from
here on, although the logo switches to E-Loan),
the loan form that you fill out is secure and
confidential and puts you under no obligation.
The site uses SSL (Secure Socket Layer) to keep
your credit and other personal information secure.
TECHNICAL
STUFF
SSL is an encryption scheme that Netscape (a company
that makes Internet software) developed. SSL facilitates
sending encrypted (coded) information over the
Internet so that no one except those to whom you're
addressing it can actually read it. Internet Explorer
and Netscape's Communicator both support SSL,
which encrypts data by using a private key scheme.
If you ever see a URL that begins with https rather
than the usual http, that's your cue that the
page uses SSL.
Seeing
results in 15 minutes
We
filled in the eAuto loan application — it's
brief and takes only a few minutes. A notice appears
on-screen telling you that the company has received
your application and that you can see the results
by clicking the Status link on the eAuto home
page or that you're going to receive a confirmation
e-mail soon.
Fifteen minutes later, we received an e-mail message
containing the loan approval. (Your experience
may, of course, differ.) In the e-mail, the company
told us the maximum that it was willing to loan
(the amount exceeded our request), the name of
a personal loan representative we could e-mail
or phone, that the loan approval was valid for
two months, how much mileage the car could have
(if we chose to buy a used car), and how many
years old the car could be. Additional information
told us what to do if we decided to wait until
later and how to contact them or respond to various
situations — such as calculating exact payments,
speaking to someone on the phone, and so forth.
All in all, it was a very fast and very pleasant
way to get auto financing.
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If you're really in a hurry, you can opt for the
overnight service. If the company approves your
loan, it sends a check draft to you the next business
day via Airborne Express. The charge for this
rush service is $12.
Exploring
other eAuto features
The
eAuto Web site isn't just a good place for financing
a loan. Go to its home page (at www.eauto.com)
and you find a plethora of links leading to various
features.
Among the other elements in the eAuto galaxy of
car-related information and features that you
can access from its home page (in addition to
the financing service that we explore in the preceding
section) are the following services:
-
A car-buying service
-
An off-lease (returned after the lease was over)
car-buying service
-
An auto-insurance service
-
A vehicle-history reporting service
-
An extended-warranty service
Autoweb's
Financing Options
The
very popular Autoweb site (www.autoweb.com
on the Web) also includes a financing feature.
Click the Finance link and you go to the PeopleFirst.com
page.
Click
the Check our low rates and simple terms link
at the bottom of the page.
Click
the Apply Online link to view the Basic Requirements,
which include:
-You
must have an "EXCELLENT and SUBSTANTIAL credit
record" (quoted from the site).
-
You must reside in a state where the company provides
vehicle loans. (Currently, the company provides
loans in all states except Hawaii, New Hampshire,
and North Dakota. Motorcycle loans aren't available
in those three states or in Arkansas, Illinois,
Kentucky, Oklahoma, or Wyoming.)
-
Your loan must be for an amount between $7,500
and $75,000 (with the exception of required lower
limits of $10,000.01 in Arizona and $15,000.01
in New Jersey and Kentucky).
Auto-loan
terms can range from 12 to 72 months; motorcycle-loan
terms can range from 12 to 60 months. If the company
approves your online application (which takes
only minutes during business hours), you can use
its check to buy a new or used car, light truck,
SUV, or motorcycle. You can buy from a new vehicle
dealer, an individual person, or another authorized
dealer or broker, or you can choose to refinance
a current vehicle loan with a different lender.
AAA's
15-Second Loan (Talk about Rapid)
If
you're really hot to trot about a car — and
want an answer instantly — try the Web site
of the AAA (American Automobile Association).
This company says that its service is available
24 hours a day and that most loans are "rendered
in 15 seconds."
Go
to the AAA home page at www.aaa.com
and enter your ZIP code and click Go. The AAA
divides its site into states, so after you provide
your ZIP code and click the Go button.
If
you click the Visitors link, you see a page listing
the various options available, which can include
travel, a travel agency, insurance, financial
services, discounts, safety issues, news, and
others. Move your mouse pointer over the Financial
services link and a pop-up menu appears. Click
the Auto loans and leases option.
Click
the Click Here portion of the online auto-loan
application link.
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A Click here to use a home equity loan to buy
a car link also appears on the AAA Financing page.
Some people prefer to borrow against their home
because they can save money that way. How? Home-mortgage
interest payments are one of the few remaining
tax deductions available to the average person.
(If you consider refinancing your home in this
way, however, make sure that you pay close attention
to the fees. In some cases, the fees such a loan
involve can erase any savings that you get from
possibly lower interest rates and the tax deduction.
Do the math, or you may take a bath.)
CarPoint
by Microsoft
If
you visit the CarPoint MSN Web site (at www.carpoint.msn.com/tinance_insurance),
you find several interesting financial features.
Try clicking the Interest Rates link and then
selecting your state from the drop-down list box.
(You don't need to click a Go button; as soon
as you choose a state, you go to the appropriate
Web page.)
The
page that appears displays the highest, lowest,
and average loan rates for your state (for both
new and used cars).
Click
the various Local Markets links for the rates
in your city, as various lending institutions
list them, including any fees, the percentage
that you must put as a down payment, and other
data.
At the main MSN auto-finance page (at www.carpoint.msn.com/finance_insurance),
you also find direct links to such lenders as
PeopleFirst Finance and CarFinance
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