My Perfect Automobile » Financing

Tesla Guarantees Resale Value of Model S

Larry Bell — Tue, 07 May 2013 12:35:04 +0000

Tesla Model S

Tesla Motors will revamp its leasing and financing plans in order to guarantee that its new Model S electric sedan will have the best resale value in the industry. The company’s CEO and founder, Elon Musk, noted that the change came as a result of feedback from buyers and media reviewers. Musk pointed out the flaws in the previous plan and noted, “We’re fixing it and, moreover, upping the ante by providing the best resale value guarantee in the automotive industry.”

Tesla Motors: Video

See the short video clip above for a condensed biography of Elon Musk, founder and CEO of Tesla Motors. The piece features a few live interview questions with Musk, during which he gives his overall views about the future of electric transportation, space travel and the computer culture. Many industry insiders credit Musk’s attitude for the company’s success. Persevering through some turbulent early years, he and his dream have come full circle. The Model S was the best-selling electric car in the month of April and will likely keep up the brisk pace throughout 2013.

Tesla Model S Financing

The first version of Tesla’s guarantee offered buyers a resale value that was certain to be above that of the Mercedes-Benz S550. The reworked financing guarantee says the Model S resale value will be higher than any premium sedan that is, “made in volume.” Tesla needed to put it that short qualifier in order to exclude certain custom and collectible cars whose selling prices are often astronomical and not tied to the larger marketplace. Another change to the company’s financing arrangement included much longer loan terms, which allow owners to purchase a Model S and have lower monthly payments.

For more about Tesla Motors, maker of the Model S, visit the company’s official website:
http://www.teslamotors.com

Larry Bell

Larry Bell + is My Perfect Automobile’s Genius Author, but we call him ‘The Expert‘. Here is his full Blog: My Perfect Automobile. Larry lives in San Jose, CA and is also the Expert Author. Larry is a lover of the Automobile as well and shares a passion for Concept, Hybrid and Electric Cars…

Car Loan Basics

Larry Bell — Mon, 25 Feb 2013 22:26:50 +0000

About Car Loans

Income and Credit Rating are Key Ingredients

The two main ingredients for obtaining an auto loan are proof of income and credit rating. Those two factors work together, and will be used by the lender to determine the interest rate you end up paying and the total amount that you will be able to borrow. Thus, the higher your provable income, and the higher your credit rating, the more money you can borrow, and the lower the interest rate you can get.

Standard Loan Application

A typical loan application in most U.S. states will include your social security number, name, address, employer data, monthly income, phone number, how long you have lived at your current address, and whether you own or rent your living space. Some loan apps ask a bit more or less than that, but those items are the basic boilerplate of the standard application for a vehicle loan.

Get Pre-approved if Possible

Generally, it is to a buyer’s advantage to get pre-approved for the loan from a bank or credit union. Before shopping, your financial institution will determine how much money you are eligible to borrow and at what interest rate. After that, you are ready to shop for cars, knowing exactly how much you can spend. With a pre-approved loan in hand, you can buy from a dealer or a private seller. Also, you can even compare your bank’s terms with the dealer’s special offers and take whatever is best for you. A buyer’s greatest advantage is getting pre-approved for a loan. That way you are able to shop for a vehicle as if you were buying for cash, since the loan amount and interest rate are already set.

Used Sales Outnumber New by More Than 3-to-1

Remember, at least 40 million used cars are sold in the U.S. each year, compared to 12 million new cars, which means that for every new car sold, 3.3 used cars are sold. Some banks and credit unions will charge slightly more for loans on “person to person” auto purchases, which means that you will pay a bit more to use your pre-approved loan for the purchase of a privately sold used car. The crucial step is to discuss all the details with your bank reps during the pre-approval process.

Larry Bell

Auto Insurance Secret: 4 Real Ways to Save Cash

Larry Bell — Tue, 30 Oct 2012 18:10:51 +0000

Auto insurance is important: An $8,000,000 Maybach Exelero

Amid all the overblown Internet advertising, there actually are solid, reliable ways to reduce the amount of money you pay for auto insurance. One expert summed it up in four words, “graze, raise, shop, drop.” What at first sounds like a crazy song lyric is really sound advice. Grazing refers to choosing, as in car shopping. When you buy a new car, keep in mind that you will pay a higher insurance premium for a more expensive vehicle, especially one with lots of extras. If you buy only as much car as you need, your insurance costs will be minimized.

Auto Insurance: Video

One of the best-kept secrets in the world of auto insurance has to do with credit scores. Your score directly impacts the rate you pay for car insurance. The expert financial planner from USAA explains all the ins and outs of the situation in the following short clip. Besides getting your rates down and your credit score up, she advises how to secure better financing on your next car purchase. While credit scores are just one aspect of getting a better deal on car insurance, their importance cannot be understated. Keep in mind that even in the most favorable cases it takes several months to raise credit scores, so start early and be patient.

Auto Insurance

Raising your deductible can be an immediate cost-cutter, especially if you can afford to cover the first $1,000 of an accident’s expense. If so, consider upping your deductibles and you might save a bundle. Drop unnecessary coverage, especially if you own an older car. Finally, shop for a better policy. Companies and rates change constantly, so consider using an independent agent to help you locate a better bargain on your insurance needs. There is no reason to skimp, but remember that deals are out there. You just have to shop for them.

Auto insurance laws in the U.S. vary from state to state, and can be quite complicated. The following informational website covers the topic’s many aspects clearly and objectively:
http://en.wikipedia.org/wiki/Vehicle_insurance_in_the_United_States

Larry Bell

New Car Buying: 3 Things You Must Know

Larry Bell — Tue, 24 Jul 2012 21:18:37 +0000

New car in 1972! Lamborghini Jarama

Many new cars are sold during and just after the summer months as dealers look to clear out the prior model year’s inventory. Before you decide to purchase a new car, there are three things you should ask yourself. First, are repair costs for your current vehicle getting too high? If the answer is yes, move on to the next question, namely, “Is my car as safe as it needs to be?”

With each passing year, new cars get additional safety features, and your present ride may have fallen behind the times when it comes to keeping you and your family as safe as they can be. Finally, try to decide if you really need a new car based on realistic data, like whether you have a larger family now than when you bought your old car.

New Car Buying: Video

The video clip above is literally packed with valuable information about buying a new car. The editors at Edmunds have put together a brief tutorial that goes into minute detail about what exactly you need to know in order to get the best price on the car you want to purchase.

It’s all about the money, and the place to start is with the car’s true market value. One of the editors from Edmunds shows you how to go about that task. If you are going to finance the car, the narrator advises, know precisely what you can afford and then test various monthly payment plans based on down payment, interest rate, and loan term.

New Car Safety

Buying a new car almost always entails a safety upgrade. More, and more effective, airbags are just one of the many new safety features added to vehicles on a regular basis.

For a good synopsis of how to buy a new car, see the following resource page from Edmunds:
http://www.edmunds.com

Larry Bell

Car Insurance Mystery Solved

Larry Bell — Wed, 27 Jun 2012 01:03:25 +0000

Insurable Asset: A Rolls Royce Phantom

One of the most common questions that insurance professionals hear is about coverage on new cars. If you sell your old, unsafe car and buy a safe, but new, automobile, what happens to the insurance cost? The bottom line is that it will almost certainly go up. The secret lies in the way the insurance companies set rates.

Almost half the cost of car insurance is tied to theft and crash coverage. In other words, if your new car is stolen or damaged, the insurance company must write a much bigger check to replace or repair. Older cars don’t cost nearly as much to replace since they have lost a good deal of their value over time, through depreciation.

But keep in mind that all new cars are not the same when it comes to insurance cost, since safer models can be covered for much less. In general, the better a vehicle’s safety rating at the Insurance Institute for Highway Safety, the lower your insurance expense will be. You can visit the site (it is linked below) to discover the specific safety rating of any car sold in the U.S. It just takes a small bit of planning to select a new car that has a great rating in the safety department. In addition, you will save a bunch of money in the long run.

For the keys to solving many other auto insurance mysteries, see the very informative website of the Insurance Institute for Highway Safety:
http://www.iihs.org/

Lincoln MKZ hybrid

One of the most fun sections of the IIHS site is listed under the major heading, Laws and Regulations, where you can click on any of the 50 states and find out that particular jurisdiction’s laws on DUI, texting, red light cameras, seat belt laws, and speed limits. This comes in especially handy if you are planning a long road trip on which you will pass through several states. Things like helmet laws and child restraint rules change practically every time you cross a state line. Happy traveling.

Larry Bell

Hot Trend: Tire and Rim Protection Plans

Larry Bell — Sat, 16 Jun 2012 06:55:35 +0000

Nice wheels: Rolls Royce Phantom

Tire and wheel protection policies are one of the biggest growth areas of the automotive field. Due to the high cost of certain custom rims and tires, dealers who offer plans have seen a doubling of business in the past five years. This year will be the third straight time that annual expenditures on road repairs have declined, which is bad news for drivers who want to keep their tires and wheels in top shape.

The most popular type of plan that U.S. dealers offer is the five-year tire and wheel plan. For a low price, which can either be paid all at once or on a monthly basis, typical plans cover repair and replacement, as well as balancing, labor, and mounting.

If you take the time to choose the perfect tires and rims for your car, it is important to know how to properly clean them. You can take the easy way, soap them up with a sponge, and then use the garden hose to rinse. But for a professional look, do it the way the pro shops do, using the right types of brushes, cleansers, and dryers. The following video link will walk you through the process. It’s easy to have a bright, shining set of rims if you wash them correctly. Here’s how:

If you would like to know a bit more about tires, rims, and wheel covers, see the following information page:
http://www.ehow.com/about_4588522_wheel-rims.html

Probably the lowest cost way that you can add to your car’s look is with a set of new rims, or even a new set of tires. Some of the factory-issued tires and wheel covers that come with new cars are mediocre at best, thus leave a lot of room for improvement. To get a better idea about the different types of tires and rims available, see:
http://shop.myperfectautomobile.com/

Larry Bell

Five Reasons Hybrids Hold Resale Value

Larry Bell — Fri, 02 Dec 2011 14:56:04 +0000

2012 Ford Fusion hybrid

There has been a lot of press coverage lately about the resale value of hybrid cars and trucks. At first, the data was unclear, but as more manufacturers issue hybrid models, and as the market ages, an unarguable trend has developed: Hybrid vehicles do not depreciate as much as non-hybrids. This fact is confirmed by objective studies of automobile depreciation rates as well as on-the-ground reports from dealerships and individual sellers.

Reason one: Hybrids cost less to operate, mostly due to low gasoline usage. Owners are aware of this obvious fact, as it is the key advertising point of most marketing campaigns.

Reason two: Demand for hybrids is typically high since (used) supply is so low. Because only a tiny fraction of all cars are hybrid models, those searching for quality used vehicles often are happy to find just one such car for sale in their geographic region.

Porsche Panamera 2012 hybrid

Reason three: The cost of oil is uncertain. This point is often misunderstood. Consumers like to know that if gasoline prices shoot up, as they have a tendency to do, economic catastrophe can be avoided by owning a hybrid car. It is not the price of oil, per se, but the uncertain future of its price.

Reason four: Because early hybrid cars were considerably more costly than other models, owners tended to be older, more financially affluent, and more responsible drivers. All of which leads to higher value retention of a vehicle.

Reason five: Hybrid vehicles are high tech, mechanically sophisticated products. Such items always retain more of their original price over time, due to a higher initial value.

While most very recent studies have shown hybrids to have about a 5 percent edge in resale value, other factors more than offset the initial higher cost of such vehicles. Typical comparisons focus on gasoline savings, but often ignore higher resale price, lower lifetime maintenance, and lower insurance premiums. That last fact is something of a new trend, as the large insurance carriers are noting that hybrid drivers do not file as many claims as other drivers, mostly because hybrids are heavier, safer vehicles.

The bottom line is that hybrid cars and trucks are a wise financial investment, regardless of your thoughts about their environmental advantages, which are numerous.

If you would like to learn more about typical price ranges for used hybrids, see our companion piece, entitled, “What To Pay for a Used Hybrid.”

Larry Bell

What To Pay For a Used Hybrid

Larry Bell — Tue, 22 Nov 2011 19:31:59 +0000

Ford Escape Hybrid 2007, on the lot

Keeping in mind that hybrid cars and trucks tend to hold resale value better than non-hybrids, shopping for a used vehicle of this type might be a little frustrating. However, it needn’t be that way, provided you are armed with some key pieces of data. The internet, along with reliable traditional sources of used car information, can be your best friend in this quest. Any used car shopper should have access to the Kelley Blue Book website, as well as NADA and Edmunds. Since the three use different methods to calculate used car prices, you will get a realistic price range for the used hybrid you seek.

Do Your Homework

Also, remember that hybrid automobiles are relatively new, thus the market bid and ask prices for used models will be wider than for non-hybrids. A very useful, if generalized, rule of thumb to begin your pricing is called the Fifteen-Eight rule. Take 15 percent off the original price of the car for the first year of its life, and 8 percent each year thereafter. This will show you a ballpark number, and while it is just a rough estimate, at least it is a place to start. Next, call some dealerships that are selling the year, make, and model you seek in order to determine an average asking price figure.

If you have ever used Craigs-list, go ahead and pick a few random cities around the U.S. and check to see if anyone is selling a hybrid car similar to the one you want. Countless websites feature used cars for sale, so do not neglect that resource. This data will help spell out the so-called private party asking price, as opposed to the retail ask price of a typical dealership.

2008 Lexus hybrid. Solid resale value.

Hone In On Price

Kelley, NADA, and Edmunds will yield a wealth of price data. Kelley, for example, shows retail, private party, and trade-in prices. Make sure to print out all the price data you come up with to use as a negotiating tool. If a dealer, or individual, sees that you have done your homework, they will be less able to bump up their asking prices. In addition, when looking at the used car, carry a clipboard and write down every little flaw you can locate, from tiny paint scratches, to torn seat upholstery.

Used hybrid automobiles will tend to be well taken care of, will show less engine wear, and typically will have higher asking prices than other cars. Be ready to pay at least three to seven percent more for the fact that the car you seek is a used hybrid.

Larry Bell

Canada Alt Fuel Incentives Now $5,000

Larry Bell — Sat, 12 Nov 2011 02:26:21 +0000

It pays to drive green in Canada

The Canadian Environmental Minister of British Columbia has announced that alternative fuel vehicles will now be eligible for a $5,000 direct financial incentive, which is to come out of a $17 million government fund set up for that specific purpose. The rebate goes to any consumer who purchases an electric, fuel cell, hybrid, or natural gas vehicle, with the program beginning in December of this year. A government spokesperson said the main goal of the plan is to reduce air pollution, with the added benefit of reducing the cost of transportation at the same time.

Dealerships Love The Plan
The province’s Department of Energy and Mines listed a more detailed set of aims, including the development of alternative vehicle infrastructure, higher employment, and a general improvement of the economy. Canada’s larger automobile dealerships are keeping a close eye on the new incentive offering, hoping that it will spur sales of the new electric and hybrid models on their lots. An overarching goal of the entire plan, however, is to reduce carbon emissions.

Some dealership owners have gone on record as predicting that the rebates will certainly influence sales figures for the month of December, but will have a much greater impact for calendar year 2012. One of the larger dealers in B.C. has said there is already a huge pent-up demand for electric and hybrid cars, and the new government program will most likely increase the number of consumers who want to buy alternative fuel vehicles.

EV demand way up in British Columbia

Infrastructure Creates Jobs
Car makers who sell electric, hybrid, and natural gas cars typically open up supply lines into regions where there is solid, reliable infrastructure and consumer demand. The environmental contingent in B.C. looks at every green car sold as one less polluting vehicle on the streets. In the whole mix, though, the key is infrastructure.

While many areas of the U.S. struggle to get electric charging stations in place, B.C. has been at the forefront of a nationwide effort in Canada to get the systems in place before cars land in showrooms. So far, it’s working, as the province has become a magnet for green companies that are in the transportation business.

Larry Bell

Financing Your Alternative Fuel Vehicle

Larry Bell — Sun, 02 Oct 2011 02:22:34 +0000

Electric cars for sale

When researching the cost of owning an alternative fuel car, drivers are inundated with data about state and federal tax rebates, comparative fuel savings, better resale rates for used electric and hybrid cars, and a host of other dollar amounts that are then summed and subtracted from the cost of the green vehicle’s sticker price. Rarely, however, do consumers take into account the potentially significant savings on the loan itself. Many credit unions, banks, and independent finance corporations offer so-called “green loans,” that can end up saving a buyer a huge chunk of cash on that new Nissan LEAF, Toyota Prius, or similar vehicle.

Save Some Green

Talk with your banker or with your credit union personnel and you will find that green car loans are very advantageous, offering lower down payments, lower interest rates, a smorgasbord of flexible repayment choices, and sometimes even a waived loan origination fee. It depends on what your specific bank offers, but most of the major financial institutions do have the preferred terms for fuel-efficient autos, so you might have to inquire to find out.

Priceless: A Citroen electric racer

There are some rules of thumb, however, that are common across institutions. The car you are buying should be no more than two years old; otherwise, lenders look at it as a higher risk asset. So, stick to the newer vehicles. Next, whatever you buy must put out less than 375 grams of carbon dioxide per mile. Keep in mind that this means the vehicle of your dreams must achieve an EPA greenhouse rating of seven or more.

Credit Worthiness Matters Too

If you do not go into the deal with at least a decent credit rating, you might not be able to get all of the components of the green loan packages. If you have the required level of verifiable income, have been in your current residence for more than a year, and score passably on the major credit agency reports, you should have no trouble saving a ton of green.

Larry Bell