Category Archives: Charge-A-Car Tips

Five Ways to Lower Your Monthly Car Payments

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Change is a vital part of life, but it’s also something that’s largely out of our control. When you initially finance your vehicle, you’re looking for the best way to accommodate your current lifestyle. But jobs, relationships, and the economy all change over time, and you might be stuck making monthly payments that are no longer in your best interest. 

Fortunately, Charge-A-Car is here with steps you can take to lower your monthly car payments. Many of these suggestions involve tips to finance your vehicle before purchase. All are designed to save you the maximum amount for the remainder of your loan term.

Refinance Your Car 

Refinancing is one of the most practical and common methods of securing a lower monthly payment. We touched on life changes that can adversely affect you – but there can of course come positive change as well! For example, if your credit score has increased since you took out the original loan, you should be able to qualify for lower interest rates. If you’re attempting to refinance and multiple lenders have calculated your rate as the same (or worse) as your original rate, it might be time to look into elongating your loan term. Speaking of… 

Extend Your Loan Term 

By negotiating for a longer loan term, you’ll pay less each month: a 72-month loan involves smaller payments than a 60-month term, 60 months is cheaper per month than a 48-month term, and so on. This makes longer loan terms ideal if you’re living paycheck-to-paycheck. You will ultimately wind up paying more over the duration of your longer loan term due to compounding interest rates – but if your immediate focus is on surviving month-to-month, a longer loan term might give you the breathing room you need above all else right now. 

Put More Money Down 

If you have the means to do so, don’t be afraid to add a little extra to your initial down payment. Chances are you’ll thank yourself for it within a few months. The more money you put down up front, the less you’ll have to finance, and the lower your monthly payments will be. This, in turn, leads to less total interest. It may hurt in the short term to put down $2,000 on a $10,000 loan – but when you factor in the accumulated interest you’ll ultimately be avoiding, all you’re doing is saving your future self a lot of money. 

Find the Lowest APR

One surefire way to lower your interest rate? Shop for a low interest rate at the outset. Auto loan APRs vary based on your credit history, but they can also depend on what lender you’re working with. Before purchase, do your research to make sure you’re getting a reasonable APR figure. According to Experian’s State of the Automotive Finance Market Report for the third quarter of 2023, the average interest rate for a used vehicle is 11.35% (up from 9.38% a year ago). Follow market trends and carefully consider whether you want to invest more than the average rate. 

Sell or Trade Your Car 

Want to pay the lowest amount possible each month? How does zero dollars sound? Well, it’s simple – all you need to do is sell your vehicle! Selling your vehicle is the one foolproof way to get rid of monthly car payments altogether. As long as the car’s value covers the rest of the loan, you’ll start anew with a fresh slate – and this time, you’ll be able to enter the car buying process with our pre–financing tips in mind. 

If you’re looking to trade in your vehicle, Charge-A-Car is the place to go. We’ll draw you up a fast, free estimate of what we’d pay for it. And while you’re here, browse our inventory for your next vehicle, which we’ll help you finance on the spot! Give in to change and discover what a more financially secure future looks like here at Aurora’s used car headquarters.

Presenting the Car Buying Dictionary

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The used car buying experience can sometimes feel like it’s operating with its own language. Gap insurance, loan-to-value, negative equity… understanding all the terminology thrown at you can be intimidating.  

Here at Charge-A-Car, our goal is to make the car buying process as simple as possible. For that reason, we’ve assembled this convenient dictionary to break down some of the auto jargon you’ll encounter on your car buying adventure.

Down Payment: 

A down payment is a lump sum of money you give to the dealer upfront before purchasing the car. At virtually all buy here pay here (BHPH) dealerships, a down payment is required to get approved for a loan. If you’re able to put down an amount larger than the minimum required, it means lower monthly payments moving forward.

A down payment at a BHPH is typically around 20% of the car’s selling price. Since BHPH dealers rarely run credit checks, this amount may be higher than at other dealerships, to help mitigate the sellers’ risk. Fortunately, a higher down payment means lower interest rates for the duration of your loan.

Gap Insurance: 

Gap insurance – also known as loan gap coverage – is an optional car insurance coverage. In the event that your car is damaged or stolen and you owe more than the car’s depreciated value, gap insurance is there to help cover the difference. It’s called gap insurance because it helps pay the gap between the depreciated value of your car and what you still owe on it. 

Because the average used vehicle depreciates quickly – 20% after driving it off the lot and 10% in the first month of ownership is the general barometer – it’s not unusual to owe more on a loan than your vehicle is worth, making gap insurance a crucial investment. 

Interest Rates: 

Interest rates – or simply loan rates – are what you’re charged every month as part of your loan agreement. A percentage of the total loan, interest rates represent what you pay monthly in addition to the base amount. Many buyers choose to finance with longer-term loans in order to reduce interest rates, with average loans landing between 70-80 months. 

Loan-to-Value Ratio: 

A loan-to-value ratio (or LTV) is the total dollar value of your loan divided by the actual cash value of your vehicle. For example: if you take out a $25,000 loan to buy a $30,000 car, your LTV would be 83%.  

LTV changes over time as you pay off your loan. That can be largely attributed to the vehicle depreciating as it ages and racks up miles. LTV also naturally declines as you continue to pay off the loan, lowering the loan portion of the ratio. 

Monthly Payments: 

Perhaps the most straight-forward term here, monthly payments are simply the amount you’re paying towards your loan every month. What’s important here are the guidelines you should follow to make sure you’re not biting off more than you can chew. The average monthly payment for used cars is approximately $533. In general, no more than 10-15% of your monthly take-home income should be spent on your monthly payments. 

Negative Equity: 

Negative equity is when you owe more on your car than it’s worth. For example, if your loan amount was $30,000 and you still owe $15,000 – but your car is only valued at $10,000 – $5,000 is your negative equity amount. Many factors can cause negative equity, including low down payments or putting excessive mileage on your vehicle. 

For more info on how to bridge this divide, see “Gap Insurance.” 

Experience Great Deals, Redefined 

Transparency is of the utmost importance to us at Charge-A-Car. We’ll work with you through every step of the financing process, breaking down each component and defining each term. After all, used car buying should be a pain-free experience. Schedule your test drive at Charge-A-Car today, and drive into tomorrow with a clear path forward. 

Fix or Flip? How to Handle a High Repair Estimate

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We’ve all been there. You encounter an issue with your vehicle, dutifully take it to a garage or dealership, and are rewarded with a repair estimate that blows past your budget. Inevitably, the question enters your brain: do I bite the bullet and pay for repairs, or is it time to trade my vehicle in for another ride? 

It’s a genuine dilemma, because there aren’t necessarily right or wrong answers. But with Charge-A-Car‘s help, you can make an informed decision and proceed accordingly. 

Step One: Analyze The Cost 

First off, don’t beat yourself up over a large repair bill! Even for drivers who are as diligent with their self-maintenance as possible, some high-priced repairs are unavoidable. No automobile is designed to last forever, and wear-and-tear items like belts and brake rotors inevitably need to be replaced. Then there are battery failures, which almost always cost a pretty penny. 

Keep in mind that it’s almost always less expensive to repair your car than buy a brand-new car, and it’s often still cheaper than trading for a newer, used vehicle. But when you’re dealing with a big-ticket issue such as a failed transmission or blown motor, and the estimate surpasses $5,000, it could be time for a big decision. 

Step Two: Weigh the Pros and Cons 

For the sake of this example, let’s say you’ve just been handed a $5,000 service estimate. It’s a daunting number, making the decision to fix or flip more overwhelming. Before the situation can snowball, break it down into a list of pros and cons. Then, after considering every factor, decide which side you fall on. 

Pros for Fixing: 

  • FIX if you’re saving for a brand new car and are confident the repair will keep you on the road in your current vehicle for another year or two. If a new car still seems like a viable option afterwards, you’ll hopefully have saved enough to make it possible.
  • FIX if you’re planning to trade for a comparable vehicle. Although trading for a used vehicle may be cheaper than paying for the fix, there’s no guarantee that any vehicle you trade for won’t come with its own set of issues. Check CarFax.com or a similar source to check the vehicle’s history before deciding. 
  • FIX if the car means a lot to you. Seriously, don’t discount sentimental value. If the car was a gift from a loved one or a dream car you worked hard to afford, don’t give up on it just because a calculator tells you you’re making the right move. You may wind up regretting it. 

Pros for Trading Up: 

  • FLIP if your current car has been experiencing recurring issues. If you’ve been making frequent trips to the garage recently, it’s most likely time to move on from it. 
  • FLIP if the repair bill is more than half the value of your vehicle. Consider trading up at this point, as the next issue you encounter could lead to a total loss.
  • FLIP if your current car is seriously lagging behind in modern safety features. If your car lacks emergency braking, collision detection, blind-spot monitoring, or other modern safety amenities, consider trading up to a more recent model for the sake of your own safety. 

Step Three: Make the Call 

Ultimately, the decision to fix or flip is your own. If you’re still having doubts or have questions, our team of professionals will guide you to the right path. Value your trade with Charge-A-Car today, and if you decide it’s time to flip, schedule a test drive! We’ll settle the finances before you drive off our lot, ensuring you some much-needed peace of mind as you drive towards life’s next destination. 

The Advantages of Buy Here, Pay Here Dealerships

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When car buying, there are more options available to you today than ever before, from manufacturers and models to payment plans. Unfortunately, transactions at traditional dealerships can be complicated by several cumbersome factors – especially with the economic uncertainty that surrounds everything today. Thankfully, there’s help to be found. 

Buy Here, Pay Here dealerships include several inherent advantages. They don’t traditionally involve credit checks on loans, instead using income verification as part of the sale. This makes them ideal for people with average, bad, or no credit and people who recently filed for bankruptcy. If you’ve recently become financially independent and don’t have much in the way of a credit history, Buy Here, Pay Here may also be the route for you. 

Read on to find out why you might benefit from making your next auto purchase at Charge-A-Car! 

Credit Where It’s Due 

Traditional car transactions require a credit check in one form or another. It’s a proposition that has gotten increasingly complex thanks to our precarious economy. Unfortunately, it can take some people years or even decades to claw themselves out of an unfavorable credit history. 

We believe that no person is solely defined by their past, and that everyone has a right to the road. Whether you’ve got negative credit or have recently filed for bankruptcy, Charge-A-Car can put you behind the wheel today without having to drudge up your credit history and enter a lengthy loan process. 

Start Me Up 

Perhaps you’re just starting out, looking to establish your financial identity anew or for the first time. If so, chances are you don’t have much of a credit history to speak of. It can be intimidating to wade into the waters of car ownership regardless, but Charge-A-Car is the perfect entry point: a reasonable dealership that you can trust. 

We’re confident when we say we offer the best Buy Here, Pay Here plan in Missouri. We put a warranty on every vehicle we sell, a system we stand behind. Here at Charge-A-Car, the customer truly does come first, and that’s the mantra we’ve proudly staked our reputation to here in Aurora. 

The Trade Deadline Has Not Passed 

Think your car is too old for a trade-in? It may be time to think again. Buy Here, Pay Here dealerships are generally more flexible than traditional dealerships when it comes to the status of older vehicles. Remember, Buy Here, Pay Here is all about keeping your options open. So even if you’re doubting the condition of your old car, bring it by and explore those options! 

For more information on valuing your trade, simply follow this link.

Quick and Easy 

Make your car buying experience simpler than ever with a dealership where you can buy your car and get financed at the same time. Stop by Charge-A-Car today, and we’ll have you behind the wheel of your new ride in no time.

By applying now, you can get pre-approval for financing on your next vehicle! Schedule a test drive and discover the road to car ownership is more wide-open than you could’ve envisioned.