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This Woman Fell Into a Used Car Loan Trap — Now She’s Fighting Back

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Mary McDuffie Morton, 31, was sued by an auto financing company after she stopped making payments on a used car that had mechanical issues. Now the mother of four, who said she was misled by the company, is fighting their claims in court.

This story is Part I of a MagnifyMoney investigation into the risky business of subprime auto lending. Read Part II here.

In the summer of 2013, Mary McDuffie Morton, 31, needed money to buy a car. At the time, the recently divorced mother of four had a poor credit history. So she was excited to hear she could get a subprime loan at a used auto dealership in Bronx, N.Y.

“It [seemed] too good to be true,” Mary recalls. “As long you have a job, you’re approved. It’s like wow, OK, I’m guaranteed approval.”

Nationwide, customers like Mary owe more than a quarter-billion dollars in high-interest, high-risk subprime auto loans. A recent report by Moody’s Investors Service found that Santander Consumer USA Holdings Inc., a major originator of subprime auto loans, has been slacking when it comes to verifying the income reported by loan applicants, according to Bloomberg. This can make it easier for car buyers to take on more debt than they can afford to repay.

But big banks aren’t the biggest problem in auto lending. About three-fourths of subprime auto loans do not originate in banks or credit unions. Instead, they are often signed at car lots like the one in Bronx, N.Y., where Mary was lured by the promise of easy credit.

In many cases, those customers are taken for a ride by predatory dealerships and finance companies alike.

“Their main job is not to care for you. It’s to care for their pocketbook, and that’s all they’re there for,” says Remar Sutton, a former car dealer turned consumer advocate.

“How many of you have seen the ads that say, ‘No credit, bad credit, no worries, we’re the credit fixer’? That is not why those ads are running. Those ads are running because they know if you think you have bad credit, you will pay anything for a car, and they’ll knock a home run on you,” warns Sutton.

That’s what happened to Mary. To buy a used 2003 GMC Envoy XL, the dealer told her she needed to first borrow roughly $7,000.

“The dealership told me they were going to shop around for lenders for me – and they were going to call one and get back to me,” Mary says.

The dealer selected Dependable Credit Corp. of Yonkers, N.Y. The interest rate on Mary’s loan was a whopping 24.9% – just one-tenth of a point below the threshold of criminal usury in New York State.

Mary signed the contract, despite an interest rate so high that it was nearly illegal.

“I was scared that if I didn’t go along with that deal, I wouldn’t get a car, ” she says.

The Secret Bonus

Like many lenders that work with auto dealers, to get business from dealers, Dependable offers them a secret bonus. It’s called a “Dealer Reserve Advance,” and it can add an extra two points of interest to the consumer’s loan. The dealer keeps 70% of it as a reward for making the referral to the finance company.

“When you go into that dealership, do you think they’re going to point you in the direction of a cheap loan? Of course not. They’re going to send you to the finance source that will pay them cash up front on the loan,” says Sutton.

Dependable executives did not respond to multiple requests for an interview or comment.

On its website, the finance company claims it does business with 250 used car dealers in seven states – Massachusetts, Connecticut, Pennsylvania, New Jersey, Delaware, Maryland, and New York – and has financed more than $200 million in loans.

“They’re in hundreds of dealerships because they’re making millions of dollars, because people who are poor, people who are worried about their credit, are being taken advantage of by that business,” says Sutton, a co-founder of FoolProof, a nonprofit website devoted to consumer education.

Mary said the vehicle she purchased had mechanical problems that the dealer refused to fix. Sensing that she was being cheated, the former Bronx resident refused to make loan payments until she received a title proving she owned the car.

“They sold me a lemon,” complains Mary. “I knew that the deal was just a big scam.”

A Long Fight in Court

Dependable repossessed the Envoy when Mary’s payments were five weeks delinquent. By the time she received the title, the car was gone – and she was thousands of dollars in debt.

According to records obtained by MagnifyMoney, the finance company sold the vehicle to an undisclosed owner for $4,200 – a price that was $5,000 less than what Mary paid just four months earlier.

Then Dependable sued her in Bronx County Civil Court for a bill packed with extra charges. The tally includes nearly $1,200 in repairs by Westchester Auto Center and more than $1,700 in storage fees charged by Saw Mill River Realty.

The three businesses are located at the same address. State records show that all three share the same chief executive.

Dependable continues to charge Mary 24.9% interest on a loan for a car it repossessed and sold to someone else three years ago. Last year, the company told the court Mary owes nearly $11,000.

“Unfortunately, most places that want to make you a subprime loan simply want to make more money on you,” says Sutton.

With the help of a legal aid group, Mary is countersuing. She alleges she was cheated through deception and illegal business practices by the finance company and the dealer.

In a counterclaim filed by Mary’s attorney, Shanna Tallarico with the New York Legal Assistance Group, in October 2016, Mary claims that the dealer also required her to trade in her 2004 Cadillac CTS in order to purchase the used Envoy.  The dealership agreed to give her just $1,900 for the vehicle, citing “a significant problem with the Cadillac’s engine,” according to Mary’s counterclaim. Days later, she claims the dealership listed that same Cadillac for sale for $9,999.

Efforts to reach the dealer for comment were unsuccessful. Mary’s case is still pending, Tallarico says.

“I felt like I had just thrown money in the garbage,” says Mary. “The whole experience was a waste of money.”

How to Buy a Used Car Without Being Cheated

Shop for financing before you look for a vehicle: The subprime interest rate a credit union can offer may be half of what a car dealer charges you. Don’t assume that your poor credit history means you won’t have a shot at getting a loan from a reputable lender. It’s perfectly fine to get your own financing outside of a dealer — and, as our story shows, it’s often much more affordable. To make matters better, if you come in with a verified offer from another lender, the dealer has an incentive to try to beat their offer.

Check your credit score yourself: Don’t take a dealer’s word on it when it comes to your credit. Your score may be good enough to qualify for a better rate on a loan elsewhere, but the dealer may not want you to know that. You can check your credit score on a number of sites for free, including the Discover Scorecard. And again, if you shop around for rates before you go to the dealer, you will know exactly what rates you deserve — and when they are offering you a bad deal.

Buy a car that works: Bring a mechanic or a knowledgeable friend to check it out before you decide. You can also check the vehicle’s background by getting a vehicle history report through resources such as the National Motor Vehicle Title Information System, CARFAX, and AutoCheck.

Buy a car you can afford: If a dealer makes promises, be sure to get it in writing. Go in with a firm idea of what kind of car you want and how much you can afford to pay.

And slow down: Never sign a contract in a hurry. Dealers may be friendly, but they’re not really your friend. To double check a dealer’s reputability, check out their reviews and rating on the Better Business Bureau website.

Additional reporting by Mandi Woodruff

Mark Lagerkvist
Mark Lagerkvist |

Mark Lagerkvist is a writer at MagnifyMoney. You can email Mark here

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Auto Loan, Featured, Personal Loans

5 Things You Should Do Before You Buy a Car

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

When it comes to buying a car, whether used or new, the real work should happen before you even set foot on the lot. Taking the time to go through a few crucial steps will make your time at the dealership a breeze. To top that, a few pre-checks could save you money, time, and the hassle of dealing with a bad auto purchase in the future.

When you finally get to the dealership, Jack Nerad, executive market analyst at Kelley Blue Book, says it will pay off to come with a price in mind and all of the legwork done. The salesperson is going to ask you questions like what you’re looking for, how soon you’re going to buy, if you’ve looked at other dealerships, and what you do for a living, because they want some sense that they aren’t wasting their time with you.

“Demonstrate to them in your answers that you know about your own finances and that you know largely what you want in terms of a vehicle, and it will go pretty well for you,” says Nerad.


Step 1: Set a budget

When you get to the lot you should already know your credit score and how much you can afford for a car. Make sure to set a budget, and stay under your budget if you can. Unless you’re paying cash for your car, you’ll likely finance or lease your vehicle, so you should figure out how much you can afford in a monthly payment. Generally, all your monthly debt payments — credit cards, auto loans, student loans, and mortgage — should not exceed 50% of your monthly income.

Outside of the value of the car, you should budget for the taxes and any other one-time costs such as title fees and dealer fees. It could also be beneficial to create some space in your personal budget for costs such as gas and insurance. You may also want to open an alternate savings account to allocate separate funds to recurring costs such as ongoing maintenance, car insurance, and any future repairs.

“They are going to try to sell you more stuff like the insurance, treatments, etc. Most of that stuff is not worth nearly what they are selling it to you for,” says Nerad. “It could hurt the deal that you’ve worked hard to get. Just say no to most of it or do it aware of the financing.”

Don’t forget to weigh your savings options. Consider putting down a larger down payment if you can. If you won’t need it anymore, selling or trading in your current vehicle can help you come up with extra funds for a down payment. You could also consider a less-expensive vehicle, cut back on the add-ons and features, or improve your credit score, to save on the overall cost of the vehicle.

Step 2: Get pre-approved for financing

Shopping for an auto loan is another tedious process, but you should have already completed the first step in setting your budget.

Your next step will be to shop for the best used-auto loan rates and get pre-approved for the best offer for which you are eligible. What’s better, you won’t need to leave your computer to shop for an auto loan. A growing number of online-only banks, such as LightStream, PenFed, and Capital One, offer competitive interest rates on auto loans. Your best bet is to get pre-approved for financing before you get to the dealership. Coupled with your budget, getting pre-approved will help you have an idea of what your monthly payment will be.

When shopping online for a used-auto loan, the application process will look like that of a brick-and-mortar bank, but more streamlined. You should have the following information at hand:

Your contact information: Name, address, phone number, email address

Vehicle information (if known — required for lenders that do not offer online pre-approval): Make, model, mileage, VIN, dealership information

Your financial information: Employment information, gross income, and expenses

While you’re at the dealership, negotiate the price of the car before telling the salesperson that you are approved for financing. When the salesperson tries to get you to finance the purchase through the dealership’s affiliated lender, you can show them your pre-approved financing offer. There is a good chance they will try to beat your pre-approved offer, which could save you thousands of dollars in interest over the life of the loan. If they can’t beat it, you’ve already found your lowest rate and can continue your vehicle purchase.

Step 3: Choose your vehicle

Research and make a decision regarding what kind of car you want. You can use websites like Kelley Blue Book, Edmunds, and TrueCar to figure out a fair purchase price.

During your search keep in mind all of the specifications that are most important to you. You should think about how you intend to use the vehicle, not just how cool you’ll look in it. If you have a long commute to work, fuel economy may be important to you. If you have small children, having enough space for a car seat could possibly weigh in your options. If you live in the city, you might want to consider how much parking parking space you’ll have access to. Get the picture? A few other considerations:

Do you want a new car or a used vehicle?

Do you want to lease or purchase?

Do you need all-wheel drive?

Do you need a lot of cargo capacity?

How many passengers do you need to carry?

What type of driving do you do: highway, surface streets, off-road?

What safety features are important to you?

Will you drive in ice and snow?

Will you be doing any towing?

Again, think about what you need in addition to what you want.

When it comes to add-ons, remember anything you add — line items such as tire treatments, insurance, etc. — will be factored into the total purchase price and financing. The salesperson at the dealership may try to get you to purchase more than you bargained for, so come in knowing what you want to add on and where your line is drawn in your budget.

Step 4: Pick the right dealership

Next, you should find out who has the car you want within your budget. Back in the day, you would have combed through newspaper advertisements or had to visit several dealerships in person to see the cars you’re interested in. Now, with the internet, you can view multiple cars at several dealerships in your area and set filters to make sure they have what you want, for the price you want.

“More often than not the sales process is going to depend on the dealership and training of the salespeople there. If you come in knowledgeable, then you are going to be in a way better position,” says Katherine Hutt, director of communications at the Better Business Bureau.

After you get a healthy list of the dealerships in your area that have the car you want, you should check out their ratings on the Better Business Bureau website. Search for auto dealers in your area to find out which ones are BBB accredited, then look at the company’s profile to see if and why they have had any complaints filed against them.

Checking the dealerships for any serious complaints regarding their sales tactics or a negative rating will help you decide which ones are worth visiting.

Step 5: Run a background check on the car you want

Consumers for Auto Reliability and Safety (CARS) is a consumer advocacy group for the auto industry best known for leading the nationwide adoption of the lemon law, which entitles consumers to reimbursement or compensation if they are sold a vehicle that fails to perform as it was expected to within a certain amount of time.

Founder Rosemary Shahan encourages consumers to check the vehicle’s background by getting a vehicle history report through resources such as the National Motor Vehicle Title Information System, CARFAX, and AutoCheck.

In the vehicle history report you should check…

Name and description

Check the name and description that pops up to make sure the car you are looking at is the same as the car in the report. This will help you avoid VIN cloning, a type of vehicle fraud that involves using a VIN from another registered car and putting it on a stolen or similar vehicle, as well as other forms of vehicle fraud. Check for the name, color, and even details like the engine type to make sure you have the right car.

Number of owners

The number of owners a vehicle has had should be weighed cautiously in your consideration. You can’t be sure that each owner was a responsible and caring car owner like you, but the chance that the car has had a bad owner rises with the number of owners it has had. However, there is no magic number of owners that will disqualify a used car. Overall, you should place more import on the vehicle’s mechanical condition and how it has been cared for than on the number of owners it’s had.

Routine maintenance

Check to see that the car was regularly serviced. If it was, it will usually last longer and may be more expensive in general. The details about the vehicle’s maintenance may also help you answer any questions you may have about its repairs or servicing. If you know where its other owners took it for servicing, you can call up those locations and ask them if they can clear up anything that concerns you.

Anything suspicious

Be sure to ask about records that don’t quite line up. For example, if you see any records of body work but no reported incident, you should look into why the vehicle got work done. It’s not often that owners want a new side door and coat of paint just to spruce up the vehicle. It’s more likely that there may have been an accident that prompted the body work.

Finally, have the car looked at by an unaffiliated mechanic before buying no matter who you choose to purchase from. You can use a resource like Car Talk to find a mechanic in your area.
When you’ve checked off these steps, pay attention to what the salesperson tells you to make sure you get the best deal.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at


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These Are the Best Auto Refinance Loans to Lower Your Interest Rate

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Best Auto Refinance Loans

A few years after graduating college, I decided to buy a car and jumped into the auto loan contract recommended by a dealership. Since I was in such a hurry to get behind the wheel again and off the public bus route, I didn’t take the time to shop around for rates. In the end, I signed on for a 49-month term loan with a whopping 11.93% APR in the DC-Maryland area. Over the lifetime of the loan, I paid an additional $2,000 in interest charges alone.

Unfortunately, I didn’t learn I could refinance my auto loan and potentially lower my APR until I was close to paying the loan off.

I made two rookie mistakes when shopping for my car: I didn’t get pre-approved for a low-rate auto loan and I went with the financing deal the dealership recommended. (You can avoid these same mistakes if you shop around and borrow before you buy.)

Take the time to shop around at various lenders to be sure you’re getting the lowest possible rate. If you shop around within a 14-day window, then your credit report inquiries will only be counted as one hard inquiry on your credit report and therefore cause minimal damage to your score.

It’s too late for me to right the wrongs with my first auto loan. But, if you’re stuck with high interest, refinancing your loan can be a simple way to save cash. There are a few drawbacks to keep in mind. For starters, to qualify for the best rates, you will need to have pretty decent credit. Secondly, refinancing your loan so that your monthly payments are smaller isn’t always the best solution. By lowering your payments, you’re dragging out the amount of time you will need to pay the loan off, which means you could potentially pay more interest fees in the long-run. It’s important to see if the numbers make sense before you decide to refinance.

In this roundup, MagnifyMoney has compiled five refinancing options that may work for you:

LendingTree Auto Refinance

[Disclosure: LendingTree is the parent company of MagnifyMoney.] If you are looking to explore your options, LendingTree is a great place to start. They have hundreds of lenders ready to refinance your auto loan. After completing an online form, you may be able to see real interest rates and approval information instantly.

Some auto lenders will do a hard pull on your credit. This is common with auto lending and it’s important to remember that multiple hard pulls will only count as one pull.  So, in this case, the best strategy is to have all your hard pulls done at one time, which LendingTree does for you.

LightStream Auto Refinance: 2.59% APR

LightStream is a division of SunTrust bank that offers a convenient online auto loan refinance process. Loan terms range from 24 to 84 months. Loan interest is fixed from 2.59% APR to 8.44% APR (with autopay). This auto refinance has no fees or prepayment penalties. And if you sign up to pay the installment loan with autopay, you get a 0.50% rate discount. Loan amounts range from $5,000 to $100,000.

The lowest rates and unsecured loans offered by LightStream do require an excellent credit score. According to LightStream, these are the characteristics of people who typically have excellent credit:

  • Five or more years of credit history.
  • A payment history without delinquencies.
  • A stable source of income.
  • Proven track record of saving.
  • A variety of open accounts.

If you apply for a LightStream refinance on a business day and complete all documents before 2 p.m., you may be able to have your loan funded the same day. There’s no pre-approval process. If you want to apply for this loan it will require a hard pull on your credit history and can dock your score a few points.

What are my chances of qualifying?

LightStream is looking for candidates with good to excellent credit. For those with good credit, LightStream may require you to secure the loan with your vehicle.

Since every situation is unique, LightStream gives some basic guidelines for what it considers a good loan candidate. You should have several years of credit history with very few, if any, delinquencies and a variety of open accounts. You also need to have savings and a stable source of income.

PenFed Auto Refinance: 1.49% APR for new cars

Auto refinances from PenFed are broken into two categories, refinances for new auto loans and used auto loans. For new cars, interest starts as low as 1.49% APR. You can borrow as little as $500 and up to $100,000. Loan terms range from 36 to 72 months.

For used cars, interest starts at 2.49% APR. Loan terms are also 36 to 72 months and loan amounts from $500 to $100,000. To apply for a PenFed auto refinance, you’ll need to provide basic details like your vehicle information, employer, gross income and expenses.

PenFed is the only credit union to make our list, but it’s a credit union that anyone can join. During the refinance application process, you can easily complete the documents for membership. If you don’t meet the membership requirements through organization or employer affiliation, you can make a one-time donation to Voices for America’s Troops or the National Military Family Association to become eligible.

What are my chances of qualifying?

The PenFed refinance doesn’t have a minimum credit score or credit history requirement. Instead, your entire financial situation is taken into consideration when evaluating your application. You may have a shot at qualifying with less than perfect credit if other aspects of your finances like savings and income outweigh the weakness on your credit report.

Capital One Auto Refinance: 3.24% APR

Capital One offers loans with interest as low as 3.24% APR. Loan terms range from 24 to 72 months. You can refinance a minimum auto loan of $7,500 and maximum of $40,000. There are no prepayment penalties, so you can pay off the refinance early without consequences.

The application for this refinance is quick and it’s one you can also complete online. Once you apply to receive an interest rate, it’s locked in for 45 days. If you decide to move forward, you’ll be asked for your vehicle identification number and to submit other requested documents. Depending on your credit score, you may be asked to show proof of income as well.

This loan does have a few other requirements to keep in mind. The car you’re refinancing must be 7 years or newer and you must be up-to-date with all auto loan payments. You also can’t refinance an existing Capital One auto loan.

What are my chances of qualifying?

Capital One uses an automated underwriting system to review variables besides your credit score to determine if you’re eligible. Some of the variables include your income, employment and whether you’re an existing Capital One customer. You may still be able to qualify with a fair credit score if other credentials tip the scale in your favor.

Bank of America Auto Refinance: 3.19% APR

Bank of America offers rates as low as 3.19% APR, but this estimate varies by state and by term. 3.19% is specific to the 60-month term. Loan terms range from 12 to 75 months. Bank of America takes into account your credit history, loan amount, loan term and whether you qualify for Preferred Rewards discounts to set your interest rate.

The Bank of America Preferred Rewards program breaks members down into gold, platinum and platinum honors. You need to have over $20,000 in a Bank of America banking or Merrill Lynch investment account (combined) to qualify for gold membership, $50,000 to qualify for platinum membership and over $100,000 to qualify for platinum honors. Preferred Rewards clients that meet the criteria can earn an interest rate discount of 0.25% to 0.50%.

You can apply for the Bank of America refinance online and there are no application fees. There’s also no prepayment penalty fee in most states, but there may be if your loan originates in Florida, Louisiana or Ohio. After you submit an application, your rate is locked in for 30 days. You may be able to get approved online within a few minutes.

What are my chances of qualifying?

During the underwriting process, Bank of America takes a look at your debt-to-income ratio and creditworthiness. Your debt-to-income ratio is calculated by dividing your monthly recurring debt payments (credit card payments, mortgage payment, etc.) by your income. The lower your debt-to-income ratio the better chance you have at qualifying for this refinance.

Should You Refinance Your Auto Loan?

An auto refinance can potentially save you money, but you need to crunch the numbers to make sure it will benefit your situation. The loan term length is an important factor to consider besides interest. If a refinance increases the number of monthly payments you need to make before the loan is paid off, the savings you get from an interest rate deduction may be less significant.

Financial institutions that offer a refinance, including Bank of America and LightStream, typically have refinance calculators on the website you can use to compare your current loan to see if it’s worthwhile.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at


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Auto Loan, Life Events

The First 3 Things You Should Do if You Get in a Car Accident

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

3 Steps to Take After You Caused a Car Accident

If you’re a driver, it is likely that over your lifetime you will be in a car accident. Hopefully, that accident only involves injuries to your car and not to you.

The next time you find yourself in a car accident and you’re the offender, follow the tips below.

1. Evaluate the accident scene

Immediately after an accident you should evaluate the accident scene. This means you should pull over right away and call the police. Put your hazard lights on and keep in mind your environment. Be very careful if cars are driving around you that you’re safely to the side. Make sure you’re okay and everyone you’re with is okay. Take note of any injuries that you or anyone else has.

After you’re safe, call the police. Whether the accident is big or small, it’s important that you call the police to the scene right away so there’s a record of the accident.

Approach the person you hit and exchange contact information with him. Get his name, address, and phone number. If you can see his identification, that’s even better, because you can confirm his identity. If there are any witnesses at the scene, you should also get their contact information, too. The more information you have, the better.  This may be done by you directly, or it may be done by the police. If it is done by the police, make sure that you get the information from the police officer, so you have record of it personally.

Take photos of the accident scene, including your vehicle, the vehicle of the person you hit, and any additional photos that could be relevant (like photos of the entire scene to show the exact space and geography of where the accident took place). If shooting a video is possible, consider recording the scene. The more documentation you have, the less opportunity there is for dispute over the scene itself.

2. Watch what you say (don’t admit fault)

While you are evaluating the accident scene and speaking with anyone other than the police, do not talk about how the accident happened or who was at fault. Do not admit that you were at fault and do not make monetary offers to the person you hit. It is tempting to apologize during a highly stressful situation, like a car accident, but it’s to your benefit that you do not say sorry or that it was your fault. Doing this could put you at risk for additional legal liability. Even if you think or know you are at fault, do not admit it.

It’s equally as important not to discuss how you’re feeling. If you say you are completely fine and later you discover you’re injured, it will be harder to prove with statements that you made saying you weren’t injured after the accident. The bottom line is that you should be very careful with what you say at the scene of the accident. Less is more.

When you are speaking with the police, be very clear about what you know happened. If you don’t remember or can’t recall exactly, then say that (don’t try to fill in the blanks).

3. Complete follow up actions after the accident

After you leave the accident scene there are follow up actions you need to take. If you are injured, seek medical attention right away. Even if you don’t start to feel pain until the following day, or some other time after the accident, make sure you get the proper attention you need.

Report the accident to your auto insurance company

Aside from the medical attention, you need to contact your auto insurance company immediately after the car accident and report the accident. As the person who caused the accident, it is your responsibility to report the accident to your insurer. But note that even if the police report puts you at fault, it is your insurance company that will determine whether you’re at fault for insurance purposes. If your insurance company does determine it was your fault, then it is likely that your insurance will be the source of your claim and the victim’s claim. However, your insurance company may fight with the victim’s insurance company or it may decide not to cover the victim’s claims if they are minimal and it’s unclear if you’re at fault. It’s not obvious what will happen because every situation is different. If the insurance company decides you’re at fault, then in most states, your insurance company will handle your medical claims and car repair claims in addition to the victim’s claims.

Keep your own paper trail

Get the name of the agent who is handling your call and who will handle your insurance claim. If you’re given a claim number, make sure to write that down and keep it on file. The more information you document, the better.

Check-in before getting repairs done

Discuss getting your car repaired with your insurance agent. Sometimes, insurers require you to get their permission before getting your car fixed. Be sure to get accurate information from the insurer and note that you can take your car where you want to be repaired – you don’t have to follow the recommendation of the insurance company as to where you take your car. When you get your car fixed, document your repairs and keep your receipts.

Decide if you need to meet with a lawyer

Your final course of action after an accident is to determine whether to pursue legal action or if you need to legally defend yourself based on the victim’s decision. You can meet with an attorney, typically for a consultation at no fee or a very small fee, so do not be deterred from an initial meeting due to fear that it will be expensive. You don’t have to commit to pursuing legal action until after you’ve met with an attorney. So, if you’re unsure about whether to move forward legally, you’re not risking much by meeting with an attorney. The attorney will also be able to advice you on whether your situation is worth pursuing legally.

A Final Note

State law governs the specific rules that will apply to you after you’re in a car accident. Check your state’s laws to determine the specific course of action you need to take. Your insurer should be able to help you with this.

Steps to take if you’re the victim of a car accident. 

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at


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Auto Loan, Reviews

Review: Chase Auto Loan for New and Used Cars

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Online auto loans are quickly becoming the most stress-free and uncomplicated way to finance a new car or refinance a loan you already have. With streamlined approaches to loan approval and the ability to walk into a dealership knowing your exact budget and interest rate with loan preapproval, car shopping is becoming easier on your wallet and your time.

The Offer

The information related to Chase Auto Loans has been collected by MagnifyMoney and has not been reviewed or provided by the bank.

Auto loans from Chase range from 48 to 72 months and interest rates can vary by state, but APRs can be as low as 2.59% (checked July 1, 2016 – your rate may vary).

New car: 2.59% (2.09% with Chase customer rate discount)
Used Car: 2.89% (2.39% with Chase customer rate discount)
Refinance: 2.69% (2.19% with Chase customer rate discount)

Chase can loan up to $100,000 and provides APR discounts up to 0.50% for Chase checking account customers.

How To Apply

An application for a Chase auto loan can be made online or at a local branch, even if you don’t know which vehicle you want to purchase yet. If you don’t know what car you want to purchase, fill out what information you can. Chase will collect vehicle information later.

In order to apply you will need to provide your:

  • Name
  • Social Security Number
  • Address
  • Date of Birth
  • Phone Number
  • Email Address
  • Employment & Income information
  • Loan Amount and Term
  • Vehicle information (make, model, year, current mileage, VIN)

The Fine Print

At the time of this article, APRs are as low as 2.59% and are based upon creditworthiness.

Chase offers APR discounts up to 0.50% for being a Chase customer and enrolling in automatic payments. If you have a personal Chase checking account your APR will be discounted 0.25%. You will receive an additional 0.25% APR reduction if you enroll in automatic payments and continue to have your monthly auto loan payments automatically deducted from your Chase checking account.

Chase also requires the following Loan-to-Value ratios with an excellent credit history.

  • 80% for new vehicles
  • 95% for used vehicles

Chase offers loans for new and used autos, but with a few restrictions. Used cars cannot be more than 5 years older than the current model year and have no more than 75,000 miles. The vehicle cannot have been sold for scrap or declared a total loss. Vehicle cannot be used for commercial purposes, such as a limousine or taxicab.


  • Loans from $7,500 to $100,000
  • Finances new and used autos
  • APRs as low as 2.59% (before Chase customer rate discount)
  • Terms from 48 to 72 months
  • APR discounts up to 0.50%


  • Lowest term is 48 months
  • Rates vary by zip code
  • No online pre approval

How It Stacks Up

[Disclosure: LendingTree is the parent company of MagnifyMoney.]On LendingTree, there are hundreds of lenders who are ready to compete for your business. You simply fill out a short online form and can see real interest rates and approval information at once. Keep in mind, some lenders will do a hard pull on your credit and that this is normal within the auto lending space. Multiple hard pulls only count as one pull, so it is smart to have all your hard pulls done at once, which LendingTree can do for you.



LightStream, a division of SunTrust Bank, provides a competitive option with APRs starting at 2.29%, terms ranging from 24 to 84 months, and financing available up to $100,000, LightStream is a flexible option that offers online preapproval. You can also use it to buy a used car from a private party – no dealer required.

If you’re a member of the military, or have a family member who is, consider Navy Federal Credit Union for shorter terms and lower APRs. Its APRs start at 1.99%, and terms can be as short as 12 months or as long as 96 months. Navy Federal Credit Union can finance up to $500,000.

Shop Around First

Online auto loans are becoming increasingly competitive, which is good for you, the consumer. The best way to ensure you get the best rate for your next auto purchase is to shop around for your best rate in the 30 days prior to car shopping. Don’t worry about your credit score as you shop around, because all inquiries within a 30-day period count as one.

Then when you get to the dealership, negotiate the price of your car before letting the dealership know that you have already been approved for financing. Then, once a price agreement has been reached, show the dealership your financing and ask them to beat it.

Often, the manufacturer offers 0% financing, which you may be eligible for. If that is the case, you just negotiated a great deal on a new car and saved hundreds or thousands in interest.

Compare Your Auto Loan Options Here

Gretchen Lindow
Gretchen Lindow |

Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at


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Auto Loan

11 Things to Know Before You Lease a Car

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Nearly one quarter of new cars in America are sold under lease agreement, and low monthly payments entice buyers who want to drive new cars, but don’t want to deal with a large cash outlay.

Lessees don’t build equity in their vehicle, but for the right person, a lease can be a good option. These are things you need to know before you consider a lease.

1. The best way to think about a lease

It’s best to think of a lease as a pay for use contract. A lease allows you to pay for the depreciation you put onto a vehicle at a reasonable interest rate. You get to drive and depreciate a vehicle for a certain period of time then you can walk away.

Due to higher markups, higher interest rates and additional fees, leasing tends to be an unfavorable financing mechanism, but if you don’t care about owning the car, a lease may be a good option for you.

As a lessee, you will drive the car during its most rapid depreciation phase, so in the long run, continuously leasing a vehicle is the most expensive way to drive, but if you always want to drive a new car, leasing can be a low hassle way to make that happen.

2. Leasing affects your credit score

Taking on a lease affects your credit the same way that taking on a car loan affects your credit. Applying for a lease triggers a credit inquiry on your report, which has a small adverse effect on your credit score. Taking on a lease increases credit utilization which also adversely affects your credit score. Over time your credit utilization will fall, and timely payment history will cause your score to increase again.

Leases are considered installment loans, and having a high utilization rate on installment loans does not have as much of an adverse effect on your credit score as having high utilization on credit cards or other forms of revolving credit. As with any form of credit, late or skipped lease payments drag down your score

Further Reading: Credit Score Guide

3. Leasing terminology

Manufacturers and salespeople shroud leasing in complex jargon. To understand the terms of your lease, these are the definitions you need to know.

  • Capitalized Cost: The price of the vehicle. This could be MSRP (Manufacturer’s Suggested Retail Price), or it could be reduced based on your negotiations.
  • Capital Cost Reduction: This is a down payment. The most favorable leases (for those who don’t intend to purchase at the end of the lease) should not include a capital cost reduction unless it’s an incentive.
  • Residual Value: This is the estimated value of the car at the end of the lease. The higher this price is relative to the capitalized cost, the more favorable it is to lease a car. keeps a database of residual values on file that you can use to understand if you’re getting a fair residual value.
  • Factor, Money Factor or Rate: This is the interest rate of your loan, but it’s not expressed as an annual percentage rate. The number expressed needs to be multiplied by 2.4 to get to an APR. For example a 1.35 money factor is a 3.24% interest rate. keeps an up to date list of “official” factors (column entitled MF) that you can use in negotiations. Interest rates on leases range from 2-3 times as high as interest rates on traditional car loans, but it is possible to negotiate this rate.

4. You can negotiate a lease

Unlike car loans, leases come from car manufacturers rather than banks. However, this doesn’t mean that it’s impossible to negotiate a lease. Anyone who intends to lease should try to drive down the capitalized cost, and people with good credit should also look to reduce or even eliminate the money factor. Small fees like documents fees, tire fees and more can be waived completely if you take the time to negotiate.

Even if a dealership advertises a “Manufacturer’s Leasing Special”, you should negotiate the terms of the lease. Salespeople depend on getting you to drive away in a new car, so consumers hold upper hand in negotiations.

5. No money down

One advantage of leasing a vehicle is that it shifts depreciation risk from the customer to the manufacturer. A down payment (or a capital cost reduction) shifts the risk back onto the customer. In a lease, a down payment is a form of pre-payment. If you terminate the lease before the end of the lease period (if your car is totaled or stolen), you lose the benefit that the down payment purchased. Putting no money down is an important strategy for keeping the lease in the lessee’s favor.

6. Extra insurance costs

Leasing yields lower monthly payments compared to buying using traditional financing, but some of the monthly cash flow advantage is lost by increased insurance costs. To protect themselves financially, lessees should purchase “Gap Insurance” in addition to traditional car insurance.

Gap insurance covers the difference between the actual cash value and the amount owed on a lease. As soon as a lessee drives the car off the lot, the car is worth less than the lessee owes on their lease. If a car is totaled or stolen during a lease period, you need to be able to buyout the lease early, and gap insurance allows you to do that. Gap insurance should be purchased through a traditional insurer, and adds anywhere from 3-10% to the traditional cost of insurance.

7. Fees, fees, fees

Every lessee runs into at least three substantial fees during the course of their lease. The first fee is an acquisition fee (alternatively called a financing fee). This fee is not a down payment, but it runs anywhere from $500 for basic compact cars to nearly $1,000 for luxury vehicles.

Dealerships also charge a $300-$900 Delivery Charge which covers the cost of the vehicle being delivered to the dealership lot. Lessees need to be prepared to pay this fee upfront, but some companies try to sneak a second delivery fee into the contracts. The second delivery fee can be negotiated to zero.

The last fee every lessee will encounter is either a disposition fee or a purchase option fee. These fees run between $300-$400 depending on which option you choose. When a lease ends, you will pay a fee to the dealership unless you negotiate it away at the outset.

In addition to these larger fees, many lessees will run into mileage overage fees which range from $.15 per mile for basic vehicles to $.30 for luxury vehicles. Most people drive more than their lease allows, and these extra miles cause additional depreciation on the vehicle. Since a lease is a “pay for what you use agreement”, it’s fair to pay for those extra miles. Of course you can avoid overage fees by limiting the amount you drive or by purchasing the car at the end of the lease.

You should negotiate smaller fees like advertising fees, tire fees, document fees, vehicle preparation fees down to zero.

8. Repairs required

Lessees bear the financial burden of repairs and maintenance on their leased vehicles. Some dealerships offer free tire rotation and oil changes, but the lessee has to pay for other maintenance. New cars shouldn’t require much maintenance, but accidents, chipped paint and broken windshields need to be paid for, and longer lessees may need to buy new tires while they own the vehicles

9. Exit options

Turning in a leased vehicle early is akin to defaulting on a car loan. Your credit will take a hit, and you will still owe money. However, it is possible to “sublet” your car through websites like SwapALease and LeaseTrader.

If your lease is about to end, you’ll have to decide whether or not to purchase the car or return it. If you want to buy the vehicle, you may be able to negotiate the buyout price. If you have the cash on hand to pay for the vehicle, and the purchase price is lower than an equivalent used car, you can purchase the vehicle outright and sell it for instant equity. If you have to obtain financing, the additional fees may erase any favorable pricing you obtained.

If the vehicle is worth less than the purchase price at the end of your lease, you should probably walk away from the vehicle or attempt some strong negotiations. Of course, the beauty of a lease is that the termination of the lease means that you can hand the keys back to the dealer and move on. 

10. Consider leasing if…

Anyone with midterm vehicle needs (only needing a vehicle for a few years) may find that a lease is a good value and a good fit for their lifestyle. Likewise, anyone who loves driving new cars and doesn’t mind having a monthly payment may enjoy leasing long term.

Continuously leasing vehicles is more expensive than “driving a vehicle into the ground,” but many people don’t mind that they get what they pay for.  People who enjoy driving newer, fancier cars may find that leasing can be a reasonable lifestyle, especially if they can easily afford the payment.

11. Avoid leasing if… 

Avoid leasing if you’re trying to drive as inexpensively as possible. The low monthly payments are enticing, but leasing is the most expensive way to drive in the long run. Leasing has high interest rates and high fees. If you can’t afford the monthly payments associated with owning a new car, consider buying used or choosing a basic model. Both of these methods end up being cheaper than leasing.

If you drive a lot, or if you frequently drive in poor conditions, you’re a bad candidate for leasing. The additional depreciation may mean that you’re left paying extra fees at the end of your lease. Additionally, anyone seeking to own a vehicle should pursue paying cash or taking out a traditional loan rather than leasing.

If you decide to purchase your vehicle instead of leasing it, it is best practice to get pre-approved for your auto loan before heading over to the dealership. [Disclosure: LendingTree is the parent company of MagnifyMoney.]We recommend starting with LendingTree. There are hundreds of lenders on this platform. After filling out your application, you will be able to see real interest rates and approval information at once.

Keep in mind, some lenders will do a hard pull on your credit and this is normal within the auto lending space. Multiple hard pulls only count as one pull, so it is smart to have all your hard pulls done at once, which LendingTree’s tool can do for you.

Hannah Rounds
Hannah Rounds |

Hannah Rounds is a writer at MagnifyMoney. You can email Hannah at


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Should You Ever Lease a Car? Here’s What You Need to Know

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Lease a Car

If you’re in the market for a new car, you may be wondering whether it would be better for you to lease or outright buy new your set of wheels. While there are many factors to consider, we’ll put it out there upfront that most experts say that it makes more long-term financial sense to actually buy and keep a new car than it is to lease one.

Having said that, here are some of the factors that should go into your decision, either way.

1.What’s your monthly budget?

While it’s true that you may be able to lease a car for less money than it would cost for you to outright buy one, what you’re essentially doing in the case of leasing a car is renting it and paying interest on something you’ll eventually need to return. That means that once your lease is up, you’ll be left with the same decision you’re faced with right now — what’s the best option for a new car?

Also keep in mind that breaking a lease — for whatever reason — often comes with early termination fees and strict payback policies (meaning you could still be on the hook for the money that’s left on your lease). You might be able to work with your dealer on some of these things, but in most cases, if you want to break a lease early, you’ll be responsible for the remaining amount left on the lease, as well as the termination fee (which could be a couple hundred dollars).

2. Check for additional upfront fees

While your overall monthly fee to drive a car on a lease will may be cheaper than auto loan payments, there are additional fees to be on the lookout for before signing a contract. For example, often customers are asked to shell out hundreds or even thousands up front in order to get the best deals on leases. This extra money is usually put towards paying down a portion of the lease, but if something were to happen to the car early on (like an accident), insurance companies often agree to pay back the value of the car, while the amount that you paid upfront would most likely be forfeited.

3. Consider any mileage limitations

The problem with leasing instead of buying is that you don’t outright own your car, so there will still be rules — set by your leasing agent — to follow. Take mileage limits, for example. Most leases have limits on the number of miles you can drive while leasing a car (usually between 10,000 and 15,000 miles per year), and customers are penalized when they drive over that set amount. At a penalty that could be around 20-to-25-cents-per-mile, those fees can really start to add up, depending on how much you drive. Always do a little math before signing on for a lease to determine if you think your estimated mileage will be within what’s offered with your lease.

4. Get on the same page about “normal” wear and tear

Since you’ll be returning this car after your lease it up, most leasing companies want to ensure that they get cars back that are within a certain realm of wear and tear. If you return a car that the company deems above average use, you’ll likely be charged extra for it. To avoid that problem, make sure you chat with the leasing agent in depth about what’s expected in terms of the condition of the car when you return it, and take photos for back up if needed.

Remember that in some cases these stipulations will be negotiable, but again, you’ll likely have to pay more for any modifications or upgrades to the typical lease that you want to make.

While leasing a car may seem like a viable option right now — and it could be — it’s worth putting in a lot of thought about the type of driver you are, how much driving you do and how much flexibility you want with your car before going into a lease. If you can’t afford a new car and a lease doesn’t feel right to you either, you can always consider buying a used model. Check out this piece for six of the best auto loans for buying a used car.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at


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Everything You Need to Know About Car Insurance

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Car insurance can be a tricky thing. From funky language like personal injury protection coverage, underwriting and VIN numbers to pricing out quotes and options, it seems like a lot of background education is needed before even attempting to find the policy that’s right for you.

To help you get answers to some of the most vexing questions you may have about the process of shopping around for car insurance, we spoke with Jeff Medina, director of sales at The Zebra, a car insurance comparison site. When it comes to the number one mistake people make with car insurance, Medina says not shopping around to find both an insurance company and premium to fit both their needs and their pocket book was top of the list.

So what do you need to know about shopping for car insurance? Here is Medina’s 5-step process to finding the company that will work best for you.

Step 1: Understand your coverage options

Before getting down to actually looking at different companies, it’s a good idea to get a grasp on the differences and definitions of insurance for things like liability, comprehensive and collision, personal injury protection and medical payments, uninsured/underinsured motorists and comprehensive. Check out The Zebra’s No-Frills Insurance Terms Glossary to get started.

Step 2: Consider the deductible

When it comes to your insurance, what you’re paying each month out-of-pocket for the policy is important, of course, but you’ll also need to pay attention to your deductible, or the amount of money you’re required to pay in order for your car insurance company to take care of the rest of a claim. Think about that number and what you can afford to pay when taking different companies into consideration.

Step 3: Know what affects your rates

Your driving history is a big part of this, since your behaviors are used to assess what risk the insurance companies are taking on. “Additionally, most insurance companies use a variety of factors like age, gender, ZIP code, vehicle make and model, vehicle use, prior insurance history, marital status and credit score to calculate your premium,” says Medina. Since insurance is regulated by state, though, these factors can vary, so look into yours.

Step 4: Be aware of discounts

Popular discounts include those for multi-vehicle policies, bundling with home or renter’s insurance, good students and safety features. “Research discounts and don’t hesitate to ask an agent what you qualify for,” says Medina. “Some insurance companies also offer usage-based insurance (UBI), which base your insurance on your driving habits and mileage. This is especially good for those safe drivers that rarely use their vehicles.”

Step 5: Choose a reliable company that fits your unique needs and get the best price by comparing

If you’ve already started the process of shopping around for car insurance, you may have been overwhelmed by the sheer quantity of car insurance companies available. “Each specializes in different types of drivers and coverage, so it’s important to compare car insurance companies to find the best match for you,” said Medina. “You can evaluate each insurer’s financial reliability (will they pay your claims?), as well as customer service and business practices to ensure you get the best experience.” Good places to look at these factors for different companies include A.M. Best, J.D. Power and the Better Business Bureau.

Armed with that knowledge, you should be able to march confidently into your car insurance search, positive that you’ll find the company that will work best for your needs. In the meantime though, if you’re currently insured and shopping around, don’t cancel your old insurance until you pick up your new policy. “Having any lapse in coverage can have a negative impact on your future insurance premium,” says Medina.

For more on cars, check out this piece about four ways to make owning a car more affordable in 2016, and this one about the six best auto loans for buying a used car.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at


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4 Ways to Make Owning a Car More Affordable in 2016

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Ah, to own a car. Let’s be honest — public transportation has its draws (the fact that we don’t have to worry about doing the actual driving, the environment, and all of that), but when it comes to convenience, nothing can beat your own set of wheels.

But can you afford your own set of wheels? This year we at MagnifyMoney want to make things as easy for you as possible, so we’ll walk you through the steps you should take prior to walking on that car lot to ensure that you’ll be driving away with the car that’s right (and affordable) for you.

1. Start with your budget

As with most financial decisions in life, the choice to buy a car should start with your current budget. Do you have leftover cash each month — or room to cut back on current expenses — so that you can make car payments each month? Starting with your monthly income will help you determine whether or not you can afford taking out a loan for a shiny new car (or even for a used one), or if buying something pre-owned and less expensive is the way to go. And remember — buying the car is just your first step. After you own it you’ll be in charge of paying for repairs, gas, insurance and more, all things you’ll need to factor into your current budget, as well.

If you need a little more help deciding whether an auto loan is right for you, check out this piece about the two times it makes financial sense to secure an auto loan.

2. Figure out your financing

If you’ll be going with a used car this year and paying for it in cash, in full, then you may need to figure out a timeline for when you’d like to purchase the car and try to break up your monthly savings to meet that monetary goal in time. If you’ll be purchasing a new car with a loan, though, you’ll want to do some shopping around. As with most loans, the better your credit score, the better your financing options will be. Online auto loans are a quick and popular way to get financing for your new car, but you’ll want to shop around. For example, check out this piece about the five best auto loans for a new car, or this one for the best loans for a used car. (P.S. You’ll also want to avoid the sub-prime auto trap at all costs … we can help you.)

Once you’ve figured out financing and know how much car you actually can afford, it’s time to head into step 3, the fun step …

3. Research your car

Are you interested in only American cars? Do you need all-wheel drive? What about those fancy add-ons like a sunroof, heated seats or satellite capabilities — how important are they to you? And safety reports — that’s got to factor in too, right? Start with the Kelley Blue Book to price out some of the vehicles you’re interested in, and then ask around for what people who have cars you’re interested in paid. A little research ahead of time will really help you when it comes time to head into step 4.

4. Negotiate like a pro

Once you’ve narrowed your list to a few car options and have a general idea of what you can (and should) pay, it’s time to shop. It should come as no surprise to you that negotiation is the name of the game when it comes to purchasing a car. Start with the fact that you’ve done your research and know how much the car is actually worth, be polite and don’t be afraid to walk away at first and come back if need be. Following up when the salesman is unlikely to make another sale for the day (and therefore would really appreciate yours!) is also a good idea, like on a weekend right before closing. If you can, you should also try purchasing your car at the end of the month or even the end of the year, when dealers are trying to move as much inventory as possible to make room for their new stock and are more likely to cut you a deal to do so. 

A lot goes into the decision of buying a new car, and a little research can really help a lot. If you’re still unsure of what your next move should be, check out this piece for eight more tips on how to score a car that you can afford and that you will love.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at


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Auto Loan, Reviews

Review: Wells Fargo Auto Loan

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Wells Fargo Auto Loan

Updated November 16, 2015

Shopping for a new (or new to you) car can be an all-consuming process. Between reviewing your budget and determining what payment you can afford, obtaining financing at the absolute best rate, and then actually shopping for the car your family needs, you can be looking at a stressful process.

Online banks and credit unions are quickly becoming the most competitive when it comes to auto financing, but big banks like Wells Fargo is still looking for your business.

The Offer

Wells Fargo auto loan provides flexible financing for new and used vehicles, as well as lease buyouts. Its rates range from 3.89% to 10.51%, and it loans up to $100,000. Auto loan terms with Wells Fargo start at 12 months and top out at 72 months, but it does not allow online approval.

How To Apply

In order to apply for a Wells Fargo auto loan, you should be prepared with the following information:

  • Personal Information: Your Social Security number, address, any previous addresses, mortgage amount and information or rent payments.
  • Income Information: Your gross income, current and previous employment history, employment status.
  • Current Vehicle Information: The VIN, year, make, model, and mileage of the car.

To make sure you have all of the necessary information, use Wells Fargo’s Loan Application Checklist

The actual online application is fairly simple, and you will receive an answer as well as your rate in 5 to 10 minutes. If you do not wish to complete your application online, you can visit a Wells Fargo branch and discuss your application there with an Auto Finance Specialist.

If you are approved for the loan, you will receive your funds within a few days.

The Fine Print

Auto loan rates with Wells Fargo depend on creditworthiness, type of purchase (new or used), term, and the amount financed. The following are the starting APRs for different types of purchase:

  • Refinance: 4.63%
  • New Purchase From Dealer: 3.89%
  • Used Purchase From Dealer: 4.13%
  • Used Purchase From a Private Party: 6.90%
  • Lease Buyout: 4.15%

The starting APRs listed above assume a loan amount greater than $22,000 and that is less than 85% of the car’s value. This means that if you have the credit history to qualify for the starting rates, you may have to have a down payment.

You can choose to finance 100% of the vehicle, and not need to provide a down payment, but your rate will be higher.

The starting APRs also include a 0.25% relationship discount. To qualify for the relationship discount, you must maintain a qualifying Wells Fargo consumer checking account and make automatic payments from a Wells Fargo deposit account. You can only receive one relationship discount per loan, and auto loans where the dealer is the lender to not qualify. If you choose to cancel automatic payments or your qualifying checking account, your relationship discount will be cancelled.

Auto loans from Wells Fargo come with a $99 origination fee, which is financed with the loan and reflected in the APR. There is no need to pay this fee out of pocket.

The minimum loan amount Wells Fargo will finance is $5,000. Wells Fargo has the ability to finance up to $100,000 for an auto loan, but the maximum amount you are approved for will be determined when you apply. Terms for new vehicles are as long as 72 months, but for vehicles 7 years or older, the maximum term is 48 months.

Wells Fargo finances most vehicles with the exception of commercial vehicles, salvage vehicles, or conversion vans. Titles cannot be registered to a business.

Also worth noting is that Wells Fargo does not finance auto loans in Louisiana.


  • Rates From 3.89%
  • Terms of 12 to 72 months
  • Loans from $5,000 to $100,000
  • 25% Relationship Discount
  • Online application approval or denial in 5 to 10 minutes


  • Rates max out at 10.51%
  • $99 Origination Fee
  • No online pre-approval
  • Not available in Louisiana
  • No commercial or salvage vehicles
  • No conversion vans
  • 48 months maximum term for vehicles 7 years and older
  • Rate is unknown until you apply

Wells Fargo


Other Auto Loan Options

Wells Fargo’s rates are easily beat by many other auto loan lenders, regardless of whether you’re buying new, used, or refinancing.


LightStream offers similar loan terms, 24 to 84 months, and will finance up to $100,000 with rates starting at 1.74%. Unlike Wells Fargo, LightStream charges no origination fee and does allow you to obtain online pre-approval before setting foot in a dealership.




For a less complicated loan experience with lower rates and fewer fees, you could also consider PenFed Credit Union. You have to become a member, but anyone can gain membership in PenFed Credit Union with a one-time donation to a PenFed selected charity. It offers rates from 1.49% to 2.99%, terms from 12 to 84 months, and will loan up to $100,000. It charges no origination fee, but does not provide the option for online pre-approval.



A Good Option in Select Cases

Wells Fargo may be a good option for an auto loan if you prefer to buy used from a private party, need a lease buyout, or already have a relationship with the bank. However, in most cases you will be better off looking elsewhere. Between the high interest rates, complicated terms, fees that few other lenders charge, and no ability to get pre-approval online, an auto loan from Wells Fargo may be more trouble than it’s worth.

Find other auto loan options here.

Gretchen Lindow
Gretchen Lindow |

Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at