Five Hidden Terms You Need to be Aware of When Financing a Vehicle

Financing a car - What You Need to KNow

By Vivienne Ollis

If you are thinking of buying a new car you may be surprised to know that over half of customers today are opting to pay for their car through auto finance options, as opposed to a straight forward cash purchase. This is partly due to the range of finances now available, good news for customers? Yes, as this has created various payment options that will suit many differing financial needs. However, this variety can also leave you slightly confused about the benefits and drawbacks of each option, or which package best suits your own circumstances, and of course there is also the hidden terminology and jargon to contend with.

Therefore if you want to avoid the pitfalls of not understanding the credit options on offer to you, it is essential to research as much as possible first, a few simple searches on the web will quickly help you decipher the jargon and get one step ahead of the salesman should he start to brush over the fine print.

1 – Don’t just presume that finance is just finance- ensure you are fully aware of what you are signing for, there are several different terms out there, which can vary but most are classed along the lines of the following 2 examples:

‘Personal Contract Purchase’

This usually consists of a deposit up front, with a set amount of monthly payments (usually lower than other finance options), with the option to purchase the vehicle after a lump sum settlement at the end of the term, or trade in and begin a new agreement.

‘ Personal Car Leasing Agreement’

This usually works around a fixed term with set monthly payments, which can also include maintenance costs for the car. You may however be tied into set mileage limits and face huge penalties if you decide to return the car early. Be aware that with this option you have no opportunity to own the vehicle.

2- Ensure you are aware of the APR (Annual Percentage Rate: the interest charged on the loan) linked to the auto finance deal.

Ask for a calculation so you know how much you will be paying overall, if your dealer seems unable to provide you with this then seek outside advice before you sign for anything, you may find a better deal elsewhere.

3 -There are of course other items, which can remain hidden in the small print, and the list can be quite extensive. If a number of these are added to your purchase you could potentially end up paying thousands of pounds extra for your car over the course of your agreement. Read the small print and look out for any of the following, asking your dealer to remove the ones you don’t need or are just not interested in.

Fabric Protector

Paint Sealant

Gap Insurance

Rust Proofing

Valeting

Extended Warranties

4- Beware of any auto finance insurance which may be added to your loan. There is a high chance you will be offered this to protect your payments from loss of earnings through unemployment or sickness. This will be sold to you as an optional extra but may not be explained properly, or even added in without your knowledge. Although these extra insurances can be beneficial it can also work out costly in the long run, just be sure you will really benefit from this before you sign.

5- Add ons and accessories – there may be a section in your agreement where the dealer can select accessories which you can have added on to your car purchase. Look out for this and either cross them out or again ask for these to be removed. If you have commented that the low profile tires or upgraded air con are great, be clear whether you are actually requesting these for your car, or just passing comment!

Finally, remember that buying a car is a major purchase so shopping around and haggling is acceptable and quite often expected.  Be sure to let dealers know what other offers you have seen and ask them to throw in extra servicing or warranty etc. if you think they can give you a better deal.

Author Bio: Vivienne Ollis – Journalist & Blogger for www.peregrinefinance.co.uk

Tips on saving with your Xmas Shopping this Festive Season

 

Smart Xmas Shopping

By David Retief

We worry about Christmas shopping, since we fear that we might not have the ways to offer exactly what’s anticipated without going further into financial obligation. There are methods to conserve cash by making a couple of, clever, shopping decisions.

When we think about Christmas shopping, we think about brightly-wrapped presents. And let’s face it; these are much more than what you exactly you put under your Christmas tree.

Strategy

  • Spending plan. Make certain that you budget for your month-to-month costs in addition to your Christmas shopping. If you do not desire to go into financial obligation, sticking to your budget plan is critical.
  • Make a list. Jot down the names of all individuals you’d rather purchase presents for and just how much you wish to invest on each present. Cut down your list if the total amount is even more than your budget plan.

Start Saving before Spending

  • Provided, bank cards are practical, but by handing over a charge card at the counter to pay, could not feel like paying. By paying cash, it can help you take better note of how much you are spending. Thus leaving your cards at home could conserve you cash at the end of the day.
  • Shop around. Look for shops that provide items at lower rates.
  • Limit the quantity invested per present. Organize with friends and family to just invest approximately a particular quantity on presents. Everyone else is most likely worrying about financial resources this joyful period, and will be eased at not needing to purchase costly presents.

Think clever

  • Purchase exactly what you require. Previously buying a product, ask yourself if that person actually require it, or if you simply desire it or since it’s on sale.
  • Conserving a couple of cents on lower-priced products will cut down your grocery costs. Do not purchase designer labels.
  • Use vouchers. Conserving a couple of dollars and cents occasionally might cut your expense considerably.
  • Get present coupons or present cards. Think about a $9 present coupon over paying $25 for a present. This is an excellent concept for conserving cash.
  • Eat more in than having to spend on eating out.

Where to go shopping

  • Save cash by doing your Christmas shopping at shops providing promos, buy-three-get-one-free offers, clearance sales and new-store-opening offers, and so on.
  • Buy at market stalls. Here you will find nice presents at far lower prices than big retail chain stores.
  • Wholesalers and manufacturing facility stores will get you lower rates on products. You’ll conserve lots.
  • Do your Christmas shopping online. You can compare costs throughout various shops and make much better monetary decisions. You’ll likewise save money on taking a trip, parking, eating in restaurants and impulse shopping.

How you can purchase

  • Purchase in bulk. Get a couple of individuals together, put your cash together, and purchase items in large quantities.
  • Buy ahead of time. Last-minute Christmas shopping can worry you out to the point where you might get the first suitable thing off the rack simply for the sake of having something.
  • Buy second-hand. This may appear ugly, specifically for Christmas presents; however pawn stores and used shops might conserve you cash.

Do it yourself

  • Make your very own presents. An image in a home-made frame, baked cakes and biscuits, and beads to make jewellery are all significant presents.
  • Make present baskets. Buy goodies that are available in strips of 4 to 6 like nuts, chips, dried out fruit, canned sugary foods and beverages, and so on. Get these for under $9 and you can have up to 5 presents!
  • Make your very own Christmas designs with acorns, string, cardboard, cut-off wrapping, spray paint and ribbons, and so on.
  • Make your very own present boxes: use product packaging from groceries.
  • Make your very own wrapping: use publications or paper, or eliminate Christmas aspects and stick them on brown paper.
  • Make your own Christmas cards and tags by cutting out photos from old Christmas cards. Make them from scratch utilizing cardboard, colored pencils and paint.
  • Do not purchase prefabricated items like treats. Make your very own in the house.

Get it totally free

  • Specific shops provide cost-free gift-wrapping services. And some shopping malls have established stalls for present wrapping.
  • Send out an e-card.
  • Free samples or trial-sized cosmetics and perfumes can make a perfect present for a lady. At no expense!
  • Individual present vouchers. This can be thoughtful along with a great present, and it will not cost you a cent. You can also create a discount coupon for somebody to babysit, offer a massage, clean the automobile, stroll the canine, cut the yard and so on.
  • Now that you’re equipped with concepts that will be kinder to your purse, we trust that your joyful period this year will be filled with even more cheer.

Author Bio:

David writes mainly about topics covering personal finance. His company is a financial services provider that can find you personal loans from various financial service providers online.

4 Budgeting MYTH Busters

4 Budget Myth Busters

It’s no secret, many of us don’t budget and just hearing the word “budget” makes our skin crawl! A new Gallup poll shows that two thirds of Americans have no written spending plan.

For one reason or another, we have these preconceived notions about what a budget is, how to create one and how it works, and we then come to one simple conclusion: Not for me!

In just 5 minutes of myth busting, you may be pleasantly surprised that budgeting is what you need and, no, it doesn’t take days to put one together. Done right, it will actually free you up, and it can be fun!

I don’t need a budget!

Budget is nothing more than a simple plan of action for how your monthly income will be spent. You have two options. Tell your money where to go (to fulfill your financial goals) or it will just go somewhere and by month’s end you’ll wonder where it went.

I recently sat down with a young couple expecting their first child. They never had a budget, but they recognized that this new addition to their family will change their financial landscape; hence they came to me for help.

After taking a look at their income and their current monthly expenditures, we added few upcoming items like daycare costs, diapers and formula. We soon realized that they were in trouble and without having a clear spending plan, they would soon find themselves in more debt.

Because we had a clear view of how every dollar was being spent, we were able to identify cost-cutting opportunities.  Within 45 minutes, we were able to create a plan of action that allowed them to weed out close to $600 of “unnecessary” expenditures and also gave them a clear path to follow.

 It’ll take forever to create a budget!

 Making a simple spending plan does not take days, or even hours. Since you have finite sources of income and finite expense categories, all you need to do is sit down and write them out.

Before technology, many used pen and paper and manual calculations, which did take more time. Nowadays, with the help of budgeting apps, like Mvelopes, the process literally takes minutes and can be done while you’re watching a movie or sipping on a cup of good coffee. The beauty of using a financial app is that once you create your plan and designate specific amounts for each budget category, every time you spend money the app tracks it for you and keeps you on track. So it’s not just a tool, it becomes your accountability partner!

After creating your basic budget you can dive deeper into understanding your spending behaviors by tracking every dollar spent over 30-60 days. This can be a great way to discover financial waste areas where you’re spending more than you may think!

Budget will restrict my freedom!

 Oh, this is one of the biggest budgeting myths out there. If you think having a plan for your money in a bad idea, think twice.  Did you know that most self-made millionaires not only have a budget, but also track every dollar spent? You know why? Because they understand that knowledge is power. When you know how your money is spent you can make educated decisions about reprioritizing and achieving financial goals.

Without this knowledge you’ll be stumbling in the dark never making any real financial progress.  Your lack of planning and lack of understanding where your every dollar goes is actually restricting you and preventing you from achieving financial success.

Can you imagine going to college and just taking random classes hoping you’ll graduate one day? Of course not, that’s why many students begin college with a given a plan of action detailing what classes to take in order to graduate within 4 years. Because of that plan, students can then decide to take more classes and graduate early, or to work while studying and graduate a bit later without as much or any debt. This is all made possible because there’s a plan to follow.

Finances are no different. Your budget becomes your guide and your greatest tool in scoring financial wins.

Budgeting is for accountants…and it’s boring!

I don’t know of anyone who doesn’t like to see their saving accounts grow or credit card balances decrease rapidly. I’ve never met anyone who is not ecstatic about being able to pay cash for a car or take a long needed vacation without using credit to pay for it.

How about couples that experience daily financial stress but, after getting on the same financial page, can finally talk about money, plan together and work towards common financial goals? That’s FUN!

Once you have a plan of action and a list of short and long-term goals you’ll love experiencing financial breakthroughs and soon you’ll wonder why you didn’t do this before.

I promise you one thing. You will never regret making a budget. You will one day regret not making one. Every day you delay is another day of purposeless financial living. You and your family deserve better!

5 Useful Tips for Getting Your Finances in Order

organize your finances

By  Dylan Adams 

The 2014 tax season is just around the corner, and many people are subsequently looking to get their finances in order well before April rolls around. If you’re among that crowd, you’ll probably find it beneficial to take a systematic approach to whipping your cash flow into shape. Assuming this is the case, check out these five useful tips for getting your financial house in order.

Run Projections on Saving & Investment Habits

Your first step should be to take stock of your assets and see where they’re going. Are your savings and investments on track? By checking out data on inflation and the projected return rates, and then combining it with your planned date of retirement, you should be able to ballpark a pretty respectable projection. This will provide increased illumination on where your choices could really be taking you. If you’re trying to figure out where to begin, CNNMoney has a useful retirement calculator to kick-start this process.

Get Your Spending Under Control

Possibly the most fundamental step you can take, though, is doing an honest review of your spending habits. Although the many memories of squandered cash might be a little ugly, they’ll certainly lend some perspective to this endeavor. Begin by gathering all your bank and credit card statements, and look at how you’re spending your cash.

Are you really making informed decisions with your purchases? Where can you combine expenses? For example, if you’re looking to replace an old laptop and you’re also interested in getting a tablet, you might find that choosing a laptop tablet is an affordable alternative that will combine the best of both worlds.

You’ll also want to look at how you prioritize your spending so that the cash goes where it matters most. Be sure to set some money aside for savings and retirement accounts — as a rule, you should be setting aside approximately 25% from every paycheck for these purposes. If you’re having problems with this, you could try a budget calculator planner to straighten up your budgeting woes.  Using an online budgeting software is a great way to help you plan, track and be proactive about reaching financial goals.

Overhaul Your Investment Portfolio

To maximize the effectiveness of your investments, you need to hash out a real plan of action. Look at your current state of liquidity — how much cash do you have invested in equities and bonds? Is any of this money sitting in emerging markets or international equity mutual funds? Do some comprehensive research and make some educated decisions on where your money can really be earning its keep. If you decide that you have too much money in cash or savings (and you probably do), then see what you can do to redistribute it to somewhere more lucrative. Just remember, no matter how good of a rate you’ll find, never put “all your eggs” in one basket. Greed and desire for high returns may actually cost you more money!

Update Your Resume & Acquire New Skills

Of course, nothing is more valuable to you than your own talents and skills. Take steps to revise your resume, and consider enrolling in classes and certifications that can enhance your skill set. In doing so, your earning potential is almost guaranteed to rise as new opportunities naturally will become available to you. Finding a new job or even making a career change could really mean a lot for your net worth — just be sure to make the right decisions before you reach your peak earning years. After that, your focus should be on saving for retirement.

Talk to the Pros (if Necessary)

Of course, you don’t have to make all these decisions alone. If you feel stuck or floundering for guidance, you’re well advised to seek the advice of a professional career counselor or a financial expert. Just make sure you know what you want from this meeting; otherwise, you’ll be unlikely to reap the full benefits, and you might even find you’re speaking to the wrong person. Be sure you understand where this individual’s specialization lies and what they can do for you before you retain their services.

Follow these five tips for getting your finances under control, and you’re very likely to find yourself in a better position before you sit down to fill out those tax forms. What other tips do you know for getting finances in order? Let us know in the comments section. 

Co-Signing… A Bad, Bad Idea!

co signing

By Megan Pacheco

Saying no, especially to close friends and family members can be very hard.  The pressure to please, combined with guilt often win over reason.

So why is co-signing such a bad idea, you may ask? After all, isn’t it a gesture of good will and a way to help someone in need? And besides, if something were to happen, isn’t the person who is actually borrowing the money liable?

We could go on and on listing reasons people use in order to justify co-signing, but here are the reasons why NOT to co-sign while still providing help to someone in need.

You’re 100% liable

 Yes, as much as it pains me to say this, those of us who co-sign are 100% liable for the entire amount of the loan, in case something were to happen. There is really no such thing as “he took out the loan so they’ll go after him first…” As soon as the borrower is not able to make the payments, the lander will pursue the co-signer FIRST in order to collect the remaining balance. Why you ask? Simple. The bank used your credit rating and your ability to repay the loan as a guarantee for giving the loan. Without you, the person was not qualified to take out the loan, hence, you were asked to co-sign!

You’re putting your credit rating at risk

 Default on co-signed loans is very common. More common than you’d like to think. In case of late payments or default, it’s your credit score that’s being compromised. So before you co-sign for anyone, please make sure you are prepared and OK with your credit score taking a beating.  If that were to happen, next time you’re in need of a loan, you’ll have to accept higher interest rates and less amiable terms, which at the end will cost you even more! You may even be disqualified for a future loan.

You’re putting your financial reserves at risk

 Anyone who chooses to co-sign should be prepared to cover the entire amount of the loan from his or her personal funds. Of course it may not be necessary, but since the possibility of default is there, you should have funds set aside “just in case.” So whether it’s your personal savings or including the amount of the monthly payments in your current budget, you should make provisions and behave “as if” you had to pay that loan back. Best-case scenario, you’ll never have to tap into those funds, but at least you’ll be prepared.

You’re putting your relationships at risk

It’s no secret that money can put strain on the best of relationships. Co-signing for a loan and than having to work though the borrowers inability to repay can destroy friendships or even family relationships. In order to protect those relationships stay away from co-signing, and if you really want to help someone, consider different ways of helping.

You could for example give a personal, no interest loan to the individual in need. Loan the amount you can personally handle without exposing yourself or your family financially. As you loan the money, accept the fact that you may never get those funds back. Commit to preserve the relationship regardless.

If your friend or a family member is in need, you can help them by exploring alternative options. Ask them why they need the money and than use this opportunity to help them put together a budget or a solid debt repayment plan. Someone who’s in need of co-signing most likely has a low enough credit score and borrowing more money will not fix this individual’s financial challenges. There are most likely underlined issues with mismanagement or overspending and you can offer your help in correcting those problem areas.

As you can see, co-signing is a risky business and you stand a chance of losing not only your financial assets, but also your credit reputation and your personal relationships. So think twice before deciding to co-sign and consider few of the alternatives.