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When Is the Best Time to Buy a Car?

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When to buy a car
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According to car ads, it’s always the best time to buy a new ride. For auto dealers and manufacturers, sure, but when is the best time for you? Timing plays an important role, especially for something as expensive as a vehicle. We’ll help you decide if and when you’re truly ready and if so, the optimum times to sign on the dotted line.

These are the 8 best times to buy a car

When you’re prepared

Consumer education is Kryptonite to car dealers — the more you know, the less likely they are to make an egregious amount of money off your car or car loan. Go to them with the fair price of the car and, if possible, find out if the same model is for sale at a different dealer across town. There are all sorts of helpful online apps and websites you could access from your phone before or even while you’re at the dealership.

Besides coming prepared with knowledge on car prices, come prepared with a preapproved auto loan. Dealerships are often able to raise your auto loan APR and take the difference as profit for themselves. The best way to combat this is to know what APR you deserve. You could apply to your bank, credit union or an online lender for a preapproval and check out the six best new and used car loan rates.

Pro tip: It does not hurt your credit to apply to multiple lenders anymore than it does to apply to one, as long as you do so within a 14-day window.

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LendingTree is our parent company. LendingTree is unique in that they allow you to compare multiple, auto loan offers within minutes. Everything is done online. LendingTree is not a lender, but their service connects you with up to five offers from auto loan lenders based on your creditworthiness.

Before you need one

The best time to buy a car is before you really need one. The more pressure you feel to buy one now, the fewer choices you have, and the more likely you are to feel pressured and make a deal that’s not best for you.

Planning your car purchase — emergencies notwithstanding — could also give you time and opportunity to save up for a down payment. You could prepare and read about how to set a budget and the best auto loan rates in 2019.

If you’ve planned your car purchase, researched cars and car loans, here are some of the best times to buy.

Monday

Dealerships are usually the busiest on weekends. Wait for the hubbub to die down and go on a Monday. With fewer customers that day, the salespeople may feel more pressure to sell and you may feel less pressure to buy. A 2016 study by TrueCar, a car-buying service, found that consumers had the highest average discount off the Manufacturer’s Suggested Retail Price (MSRP) on Monday, making it the best day of the week to buy a car.

End of the month

Most car salespeople receive commission for selling a certain number of cars each month — but what you may not know is that the dealership itself may receive a bonus from the manufacturer if it makes a sales goal as an organization. So, at the end of the month, both the individual salespeople and the dealership managers may be well motivated to sell a car to you. Even if the dealership loses money selling that one car, that one car may tip them over the line to make its big bonus goal. As such, you may be more likely to get a great deal on a car at the end of the month rather than the beginning or middle of the month.

End of the model year

When the new model year of cars come out, many people don’t consider the older year as new anymore. Fewer people want the older model year, even if the car itself is actually still new. And, as time goes on, the new car just gets older. Ergo, this is one way you could score a new car, never before owned, for a great price.

Different car models come out at different times. So if you have an idea of the car you want, search online to see when the new model year comes out and consider buying the older model year about a month after that date.

End of the calendar year

Both salespeople and the dealership as a whole want to make annual sales goals and get inventory off their lots before tax season. Also, there is usually prodigious end-of-year holiday incentives from the manufacturer, like rebates or 0% financing.

New Year’s

Many end-of-year sales last until Jan. 2, so you’re probably still safe to car shop on New Year’s Eve and New Year’s Day. It’s a good time to go car shopping, especially if you want to see well-motivated-to-make-an-end-of-year-bonus car salespeople.

Holidays

December isn’t the only month in which you can find great car deals. Most American holidays, from President’s Day to Black Friday, have car sales campaigns centered on them. Do your research before you go to the dealership. Look for incentives not only from the manufacturer, but also from the dealerships.

The bottom line

Get a car when it’s the best time for you. It’s probably best if you get a car before you really need to buy one, so you don’t feel as pressured or as stressed to make a choice in a hurry.

These timing recommendations are guidelines. Don’t feel pressured to buy at a certain time just because there’s a sale — discounts can be found on different cars for different amounts depending on factors that you, the consumer, can’t easily predict. So if you have time, and the sale on the car you want isn’t good, you’re probably better off waiting and watching.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at jennifer@magnifymoney.com

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How to Pay Off Your Car Loan Faster: Here’s What to Consider in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

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There are several ways to pay off your car loan faster, several of them without shelling out an extra dime. Auto debt not only accounts for about 8% of all consumer debt in the U.S., it’s growing: monthly payments are larger, terms are longer and APRs are higher for new and used cars than they were five years ago. Paying off your car as fast as possible frees up that money for other things.

How to pay off your car loan faster without paying more

The faster you pay off your car loan, the less you’ll pay in interest. But it may not always be possible to throw more money at your monthly payment. Here are some ways you may be able to pay off your car faster without paying additional money on the loan.

Refinance

This is the process of applying for a new auto loan to pay off your existing loan, hopefully with a better interest rate or term.

Pros. A refinance loan could help you pay your car off sooner and with a lower interest rate. Maybe your credit score has improved since your original auto loan — the best rates tend to go to those with the best credit.

Cons. With rising interest rates, it may be harder to beat your existing loan. The average APR for a new car loan at the end of 2018 was 5.87% versus 4.73% at the end of 2017.

Who it may be good for. An auto refinance loan may be a good option for you if:

  • You have a high interest rate and either your credit has improved since you signed for the auto loan or you’re not underwater on the auto loan, meaning you do not owe more on your car than it is worth.
  • If you face high penalties for paying off your current loan early.
  • You got the auto loan through a dealership, especially a “buy here, pay here” establishment. The average hidden interest rate added by dealers is 2.47% and “buy here, pay here” businesses are known for predatory lending practices.

How to do it. Call your lender to find out how much you owe and your APR. Refinance lenders usually ask for this information, so it’s good to have it on hand. Then you can look for the best auto refinance companies and find potential auto refinance offers.

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APR

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Terms

24 To 84

months

Fees

Varies

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on LendingTree’s secure website

LendingTree is our parent company

LendingTree is our parent company. LendingTree is unique in that they allow you to compare multiple, auto loan offers within minutes. Everything is done online. LendingTree is not a lender, but their service connects you with up to five offers from auto loan lenders based on your creditworthiness.

Cancel any add-ons

Common auto loan add-ons include GAP waivers, service contracts, extended warranties, tire and wheel warranties and more — you may have agreed to these when you bought your car without understanding the full cost. Canceling them will decrease how much you owe on your auto loan, allowing you to pay off your car loan faster.

Who it may be good for. Anyone who has add-ons may be able to cancel them. The less you owe, the less you pay.

How to do it. Check your car contract, call your lender or call the dealership to see if any add-ons are listed on your paperwork. If there are any, find out what they are and consider canceling them to get a prorated return. You may need to fill out some paperwork to officially cancel the add-ons, but a few hundred dollars may be worth it.

Special note. If your car has a history of needing repairs, take that into consideration before deciding to cancel an extended warranty. If you are underwater on your car loan, think carefully before you cancel GAP, which is made to protect upside-down borrowers.

Make payments every two weeks

Instead of paying once a month, take your existing car payment and split it in half. Paying every two weeks means your loan balance is continually decreasing, which has the effect of paying less interest over the course of the loan.

Why it can be good. This is a way to essentially make an extra payment without forking over extra money.

Who it can be good for. By doing this, you’re not paying any more than you normally would, but it has the effect of making an extra payment a year, so it may be especially good for someone on a tight budget.

How to do it. Check with the lender to be sure you won’t run into any prepayment penalties. If not, make a half payment every two weeks instead of one full payment each month. You could automate your checking account to send the payment, or give permission to the lender to automatically pull the payment.

How to pay off your car faster with the most bang for your buck

Have extra cash to put toward your auto loan? While the methods above are good, the fastest way to pay off your car is to increase the amount you’re spending. Almost all of these tips involve making extra payments to the principal, the amount you owe on the car not including interest. But first check with your lender that you will not be penalized or charged a fee for prepaying your loan.

Make extra payments to the principal

Why it can be good. Auto loans have simple interest, which means that for every dollar you put toward the principal, you pay exponentially less interest to the lender.

Who it can be good for. Anyone who has an auto loan from a lender who doesn’t penalize early payoff or payments to principal.

How to do it. Call the lender and ask how you can make extra payments to the principal only. You should do this because extra payments not to the principal means you’re paying interest — all you’re doing is giving the bank money early. If you make payments to the principal, you’re not paying as much in interest, which is very good.

Round up

If you find it difficult to save money or you don’t have quite enough cash to make a whole extra payment, check out this round-up method.

Why it can be good. You could pay off your auto loan early without changing how often you make your payments.

Who it can be good for. If you have a hard time saving money, this is a good way to do so.

How to do it. If the lender will not charge a prepayment penalty, you have nothing to lose by doing this and you can do it in two ways.

  • Simply round up your monthly payment. For example, if your monthly payment is $350, round up and pay an even $400.
  • Use an app, such as Acorns, to round up what you pay on all of your purchases to the nearest dollar and then pay that money to the auto loan. For example, if you got gas for $15.30, the app would round the charge up to $16 and $0.70 could go into your savings account. A little goes a long way and by the end of the month, you may have $50 you could put toward your auto loan.

Avalanche versus snowball

We’re not talking about the weather;these are two popular methods used to pay off debts faster. The avalanche method prioritizes paying off high-interest debt first. The snowball method involves paying off your debts starting with the lowest amounts. You can read about more debt payoff methods here.

Why it can be good. These are methods that could help you pay off all your debts, not just your car loan.

Who it can be good for. If you have multiple loans or debts, these methods may help you organize them and pay them off.

Snowball method: how to do it. This is a three-step pattern that should allow you to “snowball” your money to pay off your car loan faster.

  1. Look at your loans and rank them from lowest to highest.
  2. Then focus on that smallest loan, paying it off as quickly as you can with any extra cash available while making minimum payments on your other debt.
  3. Once it’s paid off, congratulations! You no longer have that payment to make. Choose another loan and repeat the process, using the money you would have paid on the loan you paid off.

Avalanche method: how to do it. This method prioritizes debt with the highest APR. For example, if you’re paying a higher interest rate on credit card debt than your car loan, you may be better off using any extra cash to pay that down first.

  1. Look at your loans and rank them from highest APR to lowest.
  2. Determine how much extra cash you can put toward the debt with the highest interest while making minimum payments on your other debt.
  3. Once it’s paid off, roll the money you were using to pay down that debt into the next one.

Windfalls

Regular extra payments may not always be realistic for your budget, but if you get any money outside of your budget that you didn’t count on, using that money as one-time extra payment toward the principal could really help.

Why it can be good. Any “windfalls” you have, such as a tax return, a refund, a bonus, a big tip or a pay raise, can be put toward the principal on your auto loan.

Who it can be good for. If you were not counting on the windfall, the extra money you got is just that — extra money. By using it as a payment to principal on your auto loan, you’ll save more money because the less you owe, the less interest you’ll pay.

How to do it. It might take some self-control, but use the windfall cash to pay the auto loan. The sooner you’ll pay it off, the more money you’ll have later to spend on things you’ll enjoy.

Make extra income

If your regular paycheck isn’t able to stretch any further, consider a side hustle and put the earnings toward your auto loan.

Why it can be good. A part-time job a few hours a week could add up to enough cash to make a significant dent in what you owe.

Who it can be good for. Anyone with some extra free time may be able to find a part-time job, temp work, freelance assignment or other gig.

How to do it. Depending on what you’re willing and able to do, you could sign up at a temporary work agency, look on job sites and/or talk to people you know about any job opportunities. Just remember to spend the money you make on paying off the principal of the auto loan. You can check out 15 legitimate places that will pay you to work from home and 5 ways to make extra money that don’t take much time.

Remove extra expenses

What are you willing to cut out of your budget or give up to pay off your car loan faster? Again, every bit helps, if the extra cash goes toward the principal of your auto loan.

Why it can be good. If you aren’t willing or able to make more income, spending less can be an equally good option and, as a bonus, you can keep doing it even after your car is paid off and save the money.

Who it can be good for. Practically anyone could do this.

How to do it. Take a look at your credit card statement or write down what you buy so you can see your spending habits in black and white. Then, decide what you could cut out or possibly get a better deal on — it might add up to more than you think. Maybe you could eat out once a week instead of every day. Maybe you could find cheaper auto insurance. Then apply that savings to your auto loan principal.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at jennifer@magnifymoney.com

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The Ultimate Guide to RV Loans

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

RV loans
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Whether you want a million-dollar mansion on wheels or a pop-up camper trailer that’s barely seven feet long, recreational vehicles come in all sizes. So do RV loans. RV financing varies almost as widely as the RVs themselves so finding the best RV loan rates requires some shopping around. We’ll tell you what to look for in an RV loan, where to find one and how to get the best rates.

Which lenders offer RV loans

Dealership lending partners

Many RV shoppers get a loan through the RV dealership. There are two ways to do this: through the dealership itself (which we’ll talk about later) or through a lending partner. In the second case, the dealership itself is not the lender, rather banks and credit unions that partner with the dealer are the ones that respond with potential loan offers.

Pros. It is terribly convenient to get an RV and an RV loan in one sweep, at one location.

Cons. The dealer may be able to raise your APR and take the difference as profit. They could also only tell you about the loan offer that makes them the most money – not the one that saves you the most money.

Pro Tip: Get at least one RV loan offer from a bank, credit union or online lender before letting the dealership search for a loan for you. This way you know what rate you qualify for, and you can tell the dealership to beat it.

Dealership in-house financing

Dealerships themselves may have a financing company that lends to customers “in-house.” Also known as “buy here, pay here” financing, in-house lending is usually only offered to people who can’t get financing elsewhere.

Pros. For people who can’t find financing anywhere else, it can be a relief to have an option and get a loan offer.

Cons. “In-house” financing is known to be predatory and can have APRs above 20%.

Pro Tip: If you are offered in-house financing at a sky-high rate, it may be better if you waited, saved up your money and improved your credit before financing an RV.

Banks, online lenders and credit unions

Large and small banks and credit unions may be willing to finance an RV, but you might not know that if you only receive loan offers from the dealer. A dealer may not partner with the particular bank or credit union you want to apply to, which means you’re unknowingly limiting your loan options. You may also be able to get a customer rate discount if you apply directly with the bank, credit union or online bank where you already have an account.

Pros. The main benefits of financing with a large bank or online lender are the 24/7 customer service and the advanced apps they may offer. The main benefits of financing with a credit union include potentially lower rates, though you would have to meet its membership requirements.

Cons. You may need to do a separate application for each bank and / or credit union you want to apply to.

How to apply for an RV loan

On almost any loan application, you’ll need to write out how much you want to borrow, what you want to buy, in addition to who you are, where you live, where you work, how much you make and how much rent or mortgage you pay.

What the lender looks at about you

Your credit score. It’s a grade of how well you’ve handled credit — how well you repaid loans, paid bills, etc. It’s a number between 300 and 850. The higher the number, the better. You may not have a credit score if you’ve never taken out a loan before. For more information, you can check out this guide to understanding your credit score.

Your credit history. This is a record of how much you’ve borrowed for what and how well you’ve paid loans back. Potential lenders see it as a good thing it you have paid other loans on time.

Your debt-to-income ratio. This measures the amount of your income that goes toward debt each month. A high debt-to-income ratio may be a sign that you don’t have enough money to make payments on an RV loan.

Your down payment. How much money are you putting down? Zero or $10,000? A down payment could show the lender how well you manage and save your money, and how much you are willing to invest of your own money, upfront, in the RV.

Your collateral. You may be able to get a better deal on an RV loan by putting your house or other substantial asset you own as collateral.

What the lender looks at about the RV

What is the RV’s age and mileage? A new RV may be a less risky investment as it is probably less likely to break down and its depreciation rate is more predictable. The older and more mileage an RV has, the more risky it may be.

The price of the RV. How much is that RV, $3,000 or $300,000? A used RV may be riskier but will typically cost less.

The value of the RV. How much is the RV actually worth? That is, are you overpaying or are you getting a good deal? To find out how much an RV is actually worth, you can use a free, online industry guide: NADAguides.

Trade-in information. If you have an RV to trade in that is worth more than what you owe on it, it can act as a down payment.

What the lender looks at about the loan you want

How much you want to borrow. Overall, how much do you want to borrow for the RV? Is this amount more than or less than what it is worth?

Pro Tip: Don’t forget, you may want to finance sales tax, government registration fees and dealer fees into your RV loan. Gear, such as hoses for freshwater and wastewater, may be included in the price of your new RV — if it’s not, try negotiating so the dealer throws them in for free.

How long you want to borrow. How long you want to borrow the money is an important factor. Usually, the more money you borrow, the longer the loan term and the lower the APR. Despite the lower APR, the amount and the term mean you’re paying more in interest to the lender. Note that a loan advertised with a very low APR may be a variable-rate loan, meaning the rate could go up and down over time. If it is a variable-rate loan, consider the pros and cons before you sign.

How to negotiate

Don’t focus on the monthly payment. A small increase in a monthly payment can mean a big change to the bottom line. If you get a good deal on the overall price, you’ll get a good monthly payment.

Shop around. Do not solely rely on the dealer and trust them to give you the best loan offer. Get at least one RV loan offer from a lender directly so you know what you qualify for and then tell the dealer to beat that offer.

Pro Tip: It does not hurt your credit to apply to multiple lenders any more than it does to apply to one as long as you do all applications within a 14-day window.

Ask for a tier bump. When you are talking to the lender representative or the dealership salesperson, ask them for what’s known as a tier bump. Potential lenders use your application to determine your credit tier. The higher the tier, the more likely you are to get a loan and to get a good loan rate. Reasons you might deserve a tier bump include a good credit history, low debt and a steady job.

Think carefully about add-ons. Don’t simply say “yes” to add-ons such as an extended warranty, GAP coverage, interior protection and tire warranty. These things are usually an afterthought to the RV itself, but they can cost thousands of dollars. Potential buyers should also factor in the other costs of RV ownership: insurance, fuel and maintenance, not to mention overnight or RV park fees.

RV loan rates and terms

RV loan offers you may receive will depend on your financial situation, the lender and the RV. To give you an idea of what’s out there, here are the highest and lowest advertised rates we saw as of this writing.

  • One of the lowest advertised rates we saw was 4.29% for a new RV loan ranging from $5,000 to $100,000 for 24 to 84 months.
  • One of the highest advertised rates we saw was 15.04% for 84 to 120 months for any amount greater than $100,000.

Depending on your financial situation, however, the APR may go up to your state’s highest legal limit, which is 25% in some states.

Terms for RV loans can be nearly as long as home loans, up to 20 years. Of course, unlike a home which you hope will appreciate in value, RVs generally depreciate. The good news? Not all RVs are super pricey — nearly a quarter of RV owners have a conventional travel trailer, which range in price from $8,000 to $95,000, according to the RV Industry Association.

Who RV loans are best for

Large RV loans are best for people who have a high credit score (750 or greater), an established credit history, low debt-to-income and a significant amount of assets that could be used as collateral. These assets could either be real estate property, stocks and bonds, a pension or other such property.

Alternatives to RV loans

There are many alternatives to RV loans. If you could get money to buy the RV in a cheaper way other than taking out an RV loan, Eric McClain, CFP at McClain Lovejoy in Birmingham, Ala., says you should consider it. “Consider your assets and credit sources and utilize the cheapest money available when possible,” McClain said.

  • Full-timer loan. If you will be using the RV as your primary residence and live in it full time, you may be able to get a “full-timer RV loan.” Talk with a tax professional about potential tax benefits for buying and using an RV as a residence — you may be able to take advantage of the same tax deductions as a traditional homeowner.
  • Vehicle loan. If the RV has a similar price to that of a regular vehicle, you may be able to get a vehicle loan for the RV. Be aware that vehicle loans usually have shorter terms than RV loans, so you may have to make larger payments.
  • Personal loans. If the RV you want is inexpensive, a few hundred dollars, you may not be able to get an RV loan for it. An alternative may be a personal loan. You could use our personal loan tool to compare lender requirements and offerings.
  • Home equity loans. If you own a house, or have almost paid off your house, you may be able to get a home equity loan or a home equity line of credit (HELOC) at a lower rate than an RV loan. Keep in mind that if you were to default on these loans, you could jeopardize your primary residence.
  • Cash. “Cash is king” as the saying goes. If you have enough cash to afford what you want, why pay interest on a loan?

If you’re caught trying to choose whether to finance or pay cash, Bernard Kiely, CFP, of Kiely Capital in Morristown, New Jersey, advised paying half in cash and financing the other half. He explained that if you withdraw cash for a large purchase, from a stock market investment, for example, and the stock market goes up 5%, you’re going to kick yourself. But, he says, “If you go half way, you’re right no matter what happens.”

RV loan refinance

If your financial circumstances, particularly your credit score, have significantly improved since you originally signed for your current RV loan, consider looking into refinancing. You may be able to save more money by refinancing than you otherwise would by making early payments. Many places that offer RV loan financing also offer refinancing and you could even ask your current lender for a refinancing offer. Not all lenders will refinance their own loans, but some will in order to keep your business.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at jennifer@magnifymoney.com

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