National Used Cars

The condition of the economy in the United States has elevated the rate of car sales to their highest levels in 30 years. According to figures compiled by Edmunds.com, purchases at independent and franchised lots in 2008 accounted for 65.2 percent of all car sales, up 5 percent from the previous year. This trend has only been bolstered in 2009 by bankruptcy proceedings for Chrysler and General Motors, which have forced financially pressured customers to also deal with worries over long-term service options and warranties.

Whereas used car customers were once stereotyped as people living on a month-to-month basis, salesmen are now seeing buyers interested in keeping their budgets lean as they wait for the U.S. auto industry to find its footing again. These first-time “previously owned” buyers will be surprised at the generally favorable climate they encounter when they go shopping for cheap car insurance.

While exact percentages will change from one company to the next, it’s a standard rule of thumb that insurance premiums will fall 5% to 10% at five-year increments over the life of the given vehicle. Traditionally buyers have been counseled not to choose a car more than two-year-old, but now drivers are keeping their cars longer, with three years the current recession standard, and five clearly in sight. This means the new driver of a well-maintained used car will be able to tap into that discount cycle faster. The downside in overall value is that used cars do depreciate faster, but most people consider that a trade-off in terms of economy of scale.

In spite of the vintage of any car, tough times send all drivers diving for discounts. A clean driving record is your best friend in this regard, as are such insurance standards as rewards for the presence of passive restraints and anti-theft systems. There are, however, less well-known, but perfectly viable discounts that are worth investigating:

• Education. Individuals with degrees in science, math, and engineering are placed in a lower risk category and can receive discounts of 10 to 30 percent.

• Occupation. The lowest risk job holders are teachers and farmers. Teachers commonly get discounts of 10 to 30 percent. Farmers might have to be a little more aggressive in the quest for equal numbers, but asking (with supporting data readily available online) to back up the request can’t hurt.

• Military Service. Active and retired military personnel can receive discounts from GEICO and other insurers ranging from 2 to 15 percent. (Also note that it’s pretty much standard procedure for companies to lower premiums for actively deployed military personnel storing a vehicle.)

• Age. Drivers can expect deep discounts — as much as 45 percent off — from companies like Hartford that have a AARP Auto Insurance Program.

• Driver’s Training. While it’s normal to take defensive driving courses and other driver’s safety programs to counterbalance the effect of a traffic citation, the same courses can be used to lower premiums. (Many of these courses can now be taken online for greater convenience.)

With these opportunities as well as discounts for multiple drivers in one family or new programs for teenage drivers using GPS monitored vehicles, used car drivers who are already benefiting from the age of their vehicles can count on significantly lower insurance costs over the normal driving life of their investment. The most important first step is to get a used car with some manufacturer warranty still attached or one that has been “certified” through a franchised lot. All successful insurance negotiations are based on the car’s condition. Start from a good point in that regard and you’ll do well with your coverage costs.

If you have been dreaming of going home with that dream car but have been disillusioned by the constant disapprovals that you have been getting from most finance institutions, then you are just in luck with guaranteed car finance. There are car dealerships and lenders that are willing to finance buyers notwithstanding their credit rating.

Prior to the advent of guaranteed car finance, people with bad credit had no choice but to purchase their vehicles from specialised garages that offered limited variety. But with guaranteed car finance, you have the option to buy your dream vehicle from dealership of your choice.

The following are measures that you may want to undertake in order to obtain the best deal in guaranteed car finance.

Work On Your Credit Rating

Know your credit rating and try to improve on items that you have control over. Settle outstanding dues if you must and make sure that all items in your credit records are accurate. Seek to have your previous lenders change your credit report.

If you have absolutely no credit history, try to build up your credit rating by purchasing a secondhand vehicle that is within your means using bad credit car finance or try a loan from a family member or a friend. When you pay off your loan prudently, you get a chance to secure a better deal on your next loan. You may even swap the vehicle for a better car within the loan term if your dealer permits.

Keep a Record of Supporting Documents

Keep a file of various proofs of payment such as lease contract, tax returns, receipts and statement of utilities. Organize your bank account statements and make sure that you have at least the last six months’ records at hand. These papers may be required by lenders as supporting documents to your loan application.

List Down Your Options

Take an inventory of available car financing companies and the services they offer. Check out local credit companies as well online dealerships. Note that local credit union may require that your application form is cosigned by a backer. On the other hand, some online dealerships offer discounts when you submit your application through their website. Moreover, some online companies have affiliate lenders and dealerships to process your application and that increase your chances for an approved loan.

However, be on guard for predatory credit companies. Take special concern on interest rates and fees and penalties. Note that aggregated interest and fees should always fall below the cost of the car.

Hold That Job

You would want to give lenders the impression that you can hold a steady job. So if you are looking at transferring to a new employment, hold it off until you have had your application approved. Lenders look into applicants’ employment history and find favorable those that are steadily employed to a particular job for at least 2 years. Obviously, you have to be earning sufficient salary in your current job to earn approval of your application.

Make a Deposit

If you are not successful in improving your credit rating, you may have to prepare about 10 to 20 percent of the total loan amount as a deposit. You may likewise trade in your used car if the dealer approves.