The cost of auto loans across the country has risen regularly. For example, auto financing companies declined to comment how a family ends up spending $122,000 for the vehicle that was originally valued at $71,148. Here is an excerpt from research conducted by consumer reports:
“John Van Alst, an attorney and expert on auto lending at the National Consumer Law Center, a consumer advocacy nonprofit that represents low-income consumers in car-related issues, says people with low incomes and lower credit scores face the most difficulty with affordability. The data, he says, illustrates the lengths to which low-income borrowers often must go to buy a car.
‘Lower-income people spend a higher percentage of their budget on cars out of necessity,’ he says.”
To read more and see the alarming scale at which auto loan debt is rising throughout the United States, please see the article below from Consumer Reports.
We receive calls from people who have paid more for a used model of a car than if they purchased a brand new model of the same vehicle. To add, we also receive calls from people who do not realize they are to make payments every two weeks instead of every month. Understanding your loan terms is important. Now you are probably wondering, how do I avoid overpaying on my car loan?
The time to realize that you are overpaying for an auto loan is before you sign any of the paperwork finalizing the deal. You are in control. You do not have to agree to the dealers terms. And Truth in Lending requires that the terms be disclosed to you in writing before you sign in a form that you may take away with you. The article listed above explains, “dealers and lenders may be setting interest rates based not only on risk—standard loan underwriting practice—but also on what they think they can get away with. Studies show that many borrowers don’t know they should, or even can, negotiate the terms of a loan, or shop around for other offers.”
For more information about how to shop for a car loan, check out this article from Consumer Reports: https://www.consumerreports.org/car-financing/how-to-shop-for-a-car-loan-a2742917735/.