Category Archives: Car Buying, Auto Loans and Financing

5 Reasons Buying Out Your Lease Makes Good Sense

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With the end of your auto lease just around the corner, you’ve got some decisions to make. But before you start stressing about your current mileage or scratches on the bumper, you may want to think about buying out your lease. Would it make more sense to keep your car instead of turning it back in like you originally planned? In many cases, yes.

There are numerous benefits to buying out your lease—but first, a word of caution: Traditionally, dealerships have taken a hands-off approach to the buyout process, allowing consumers to deal directly with the corporate finance department or the leasing company. However, optional insurance and warranty products have given dealers an opportunity to increase their profits by facilitating the buyout process and including add-ons. These extras can come with a steep markup, making the final price more expensive than it should be.

Before agreeing to any buyout terms, it’s important to remember a credit union can routinely offer lease buyouts with lower rates and convenient payment terms. It’s worth your time—and potentially a lot of money—to get details on the financing options available.

Still wondering whether a lease buyout is right for you? Here are five points to consider:

  • Ownership has its advantages.
    Let’s be honest—the peace of mind that comes from not worrying about mileage overages and wear-and-tear penalties is a big deal. When you own the car outright, you no longer have to feel that growing sense of dread commonly associated with the end of a lease term.
  • Car shopping is a hassle.
    You’ve already gone through the frustrating highs and lows of car shopping. Why do it again? You probably selected your car after a thorough process of weighing pros and cons. If it was the right car for you then, there’s a good chance it’s still the right car for you now.
  • Better the used car you know (than the used car you don’t).
    This may seem obvious, but you’re already familiar with your car. If you had to start shopping for a different used car, there would be questions about how the previous owner cared for it. If you buy out your lease, you ARE the car’s previous owner. There are no unanswered questions about the car’s maintenance history or other people’s driving habits.
  • No more guessing games.
    At their core, auto leases are all about variables. A car’s market value ebbs and flows based on supply and demand. Lease rates may be higher the next time you come to the end of a term. By opting for lease buyout loan, you can lock in a great interest rate and a convenient payment plan for the life of your loan.
  • You have more leverage than you realize.
    Have you ever thought about what happens when you turn your car back in at the end of your lease? The leasing company is left with a used car, and they’re not in the used car sales business. In many instances, they would rather negotiate a good buyout price with you than go through the trouble of selling the car at auction or to a dealer.

Ready to look into a lease buyout?

You can fill out an online application here, learn more on our website, or call the Loan Department at 732.312.1500, Option 4.

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms and conditions may apply. Actual rate may vary based on credit worthiness and term. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. A First Financial membership is required to obtain an Auto Loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties.

Don’t Get Scammed into Paying for Vehicle VIN Etching

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Several weeks after purchasing a pre-owned car, the buyer noticed a charge of $398 that he didn’t recognize. It was labeled as Protection Plus Etch in his sales agreement. He made a quick call to the car dealership and confirmed that he’d been charged for glass etching. Wait, what? “Etching” is a security add-on where a unique code or vehicle identification number (VIN), is etched into the vehicle’s windows.

“The add-on will help identify the car if it was ever stolen and could even lead to discounts on auto-insurance,” the dealer assured him. The gentleman was certain he’d not been told about this service at the time of sale. Worse, when he checked with his insurance company they said that they offered no such discount.

To be clear, etching vehicle windows is not an outright scam, but the practice is of questionable value. There’s a good chance that your insurance company does not offer discounts for window etching on your vehicle, or if they do – that it’s not a substantial amount.

Still think there’s some value in this procedure? Don’t pay a few hundred dollars to the dealership for something that you can do with an $18 kit from Amazon.

If you recently purchased a vehicle, go back and check your sales receipt. Did you unknowingly pay for such a service? The dealer will claim that their etching comes with an insurance policy that will cover a certain amount should your car be stolen and not recovered within a certain amount of time (usually 30 days). Ask to see the details of this policy. If the dealer cannot produce the policy details, demand a refund.

Wondering what else you might have paid too much for? First Financial offers a free review of your deal to see if you are eligible to receive a lower interest rate or lower monthly payment. Some members have saved hundreds, even thousands of dollars in interest by taking a few moments to do this.* Fill out the form below to schedule a free in-person or over-the-phone appointment, to see how much you may be able to save!

Fill out this form to see if we can save you money!

Learn more about First Financial Auto Loans, our Lease Buyout Program, or apply online 24/7.

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms and conditions may apply. Actual rate may vary based on credit worthiness and term. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. A First Financial membership is required to obtain an Auto Loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties.

The Pros and Cons of Leasing a Vehicle

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Have you ever thought about leasing your next car? If the thought has crossed your mind, here are a few pros and cons of leasing a car.

Pro: Lower monthly payments
Generally, lease payments are lower than car payments and if you’re used to having a payment, this probably sounds great to you.

Con: No equity
When you sign a lease, you’ll have to make payments over a defined period of time. When that time is up, the car goes back to the dealer. At this point, you’ll have a decision to make. You can either enter into a new lease or you’ll have to buy the car.

Pro: Repairs are usually covered
Since you’ll only have a leased car for a handful of years, it will more than likely be covered by a factory warranty. This will save you from having to shell out big bucks for repairs while you have the car.

Con: Mileage limit
How many miles do you drive each year? If you drive over 10-12k miles a year, you’ll probably face some sort of penalty fee at the end of your lease term. Be mindful of this, because those extra miles can really add up.

Pro: A new car every few years
If you’re serial leaser, you probably love driving a new car. This is a definite advantage of leasing over buying. Buying and selling cars can be a hassle, so if you love driving new cars, leasing can be a great option for you.

Con: Fees for damages
When you turn in your car at the end of your lease term, the dealership is going to want to sell it. If there are any dents or scratches to be repaired, you may want to get them taken care of before you turn in the car. A little ding in the door isn’t a big deal if it’s your car, but with a lease, you’ll probably have to pay a fee to get it repaired.

Leasing isn’t for everyone. There are definitely advantages and disadvantages to leasing vehicles. Do your homework and decide what is the best option for you.

Have you leased a vehicle and you’ve gone over your miles or excessive wear and tear? First Financial can help you buy out your lease and help you save! With our Lease Buy Out Program, you aren’t stuck with a big lump sum payment. We’ll help you keep that car you love.* Get started today.

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms and conditions may apply. Actual rate may vary based on credit worthiness and term. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. A First Financial membership is required to obtain an Auto Loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties.

Article Source: John Pettit for CUInsight.com

 

4 Tips to Make Car Buying Easier

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If you want to save yourself time, money, and a few headaches when purchasing a vehicle – be sure to follow these steps.

Do your homework.

The last thing you want to do is show up unprepared. Sure, you may find a car you like by walking around the lot, but that can backfire. Study up, look at as many different makes and models as you can online first, and try to be sure you’re getting the car that satisfies your heart and your wallet.

Know before you go: Check out our YouTube video on buying a car in 5 easy steps.

Use your credit union.

Once you know which car you want to purchase, head to your local credit union and find out what kind interest rate you can get on a loan. With this knowledge, you’re now ready to go to the dealership and make a deal.

If you’re in the market for a new or used vehicle, stop by First Financial and apply for an Auto Loan with us! We have the same great low rates whether you plan on purchasing a new or used vehicle.* To apply, click here for our online application or stop into any branch location.

Shop on a Tuesday.

Car dealerships are usually busier on the weekends. By shopping in the middle of the week, you’re going to get more attention and better service. This may not necessarily translate to a lower price, but it will definitely speed up the process and make it easier to get done.

Remember you’re not buying a cheeseburger.

When you have a craving for a Five Guys cheeseburger, you go to your nearest Five Guys and you eat a cheeseburger. It wouldn’t make sense to drive one town over for the same cheeseburger at roughly the same price. With a car, things are different. There are a lot of factors (including the salesperson you deal with) that can determine the price you’re going to pay, so driving 20 minutes to a neighboring dealership may be worth your time and money.

If you are a First Financial member, be sure to visit our Preferred Dealerships. The right car and offer is out there for you!

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms and conditions may apply. Actual rate may vary based on credit worthiness and term. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. A First Financial membership is required to obtain an Auto Loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties.

Article Source: John Pettit for CUInsight.com

 

The True Cost of Your RV

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Question: We’d like to get an RV instead of going on vacation this summer. It’s always been a dream of ours. In addition to the cost of purchasing the RV, what hidden expenses should I expect once we own it?

Answer: Buying or renting an RV can be an enjoyable way to travel and see the country from sea to shining sea without checking into a motel room even once. But before you make that decision, take into account these hidden and additional costs:

Fuel. Plan on about 8 to 15 miles per gallon. If your water and sewage tanks are fully loaded, you’ll spend more on fuel. If you travel light, you can get better mileage. But in the middle of that range, it’s still going to cost about 38 to 40 cents per mile in fuel costs alone, assuming diesel prices of $3.50 per gallon. Some areas have higher fuel costs than others.

Also, not only will driving use up gas, but your generator will also consume fuel if you aren’t plugged into the grid. If you’re using an electric heater or the air conditioning while you are stationary, or if you enjoy hot water, you will have to run your generator. The more you use it, the higher the costs will be. Some may use propane rather than electricity, but propane isn’t free either.

RV Park Fees. Lots of people use the free parking in Walmart parking lots, but if you want to stay at an RV park, plan on spending between $30 and $50 per night. This is usually a little less than you’d pay for a budget hotel, but be prepared to pay it pretty often. RV folks tend to be out on longer trips than non-RV people, who may only pay for a hotel for a few days or a week. You can usually get a discount from RV parks if you pay by the month.

Insurance. Because there are a number of specialized underwriting factors, see if you can find an insurance carrier or agency that specializes in RVs. For example, a typical auto policy has very limited benefits for replacing lost, stolen or destroyed personal belongings in a car. You will need higher limits for an RV than for a standard truck or sedan. You will also need specialized ‘full-timer’ insurance for when your RV is stationary. This coverage provides similar protection to homeowners’ insurance. But if you still have an unwheeled residence, you’ll also need to maintain home coverage on it.

Note: In most cases, you need insurance even if your RV is a trailer. Ask your agent about “trailer insurance.”

Maintenance. Save early and save often for maintenance issues. Towing costs alone will be significant if you do have a breakdown. It takes a heavier duty tow truck to haul an RV – and it may have to be hauled a long way to find a mechanic capable of fixing it! Maintenance costs are all over the map, but can easily run thousands of dollars. New tires alone cost $300 each (roughly $1,200 to change them all).

Once you’re aware of these factors and feel, as many people do, that the benefits and savings far outweigh the costs, start shopping for your RV. First Financial can help you purchase an RV with our RV loan program. We have great low rates plus:

  • Financing on your new or used RV up to 120 months
  • Up to 110% financing
  • Loan Payment Protection
  • Easy online application

Click here to learn more and to apply today!

*A First Financial membership is required to obtain an RV loan and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.

Will Paying Off My Car Loan Help My Credit Score?

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Credit-Score-325x222There are a lot of different kinds of credit out there. One of the most common forms is the auto loan. Though we are all itching to pay off our long-term debts and own something free and clear, there are a few precautions to know about before racing to get that statement to read zero.

To determine if paying off your car loan will help your credit score, it is important to understand several factors that go into your credit score.

Multiple facets of FICO

First, it’s important to understand the components that make up your FICO credit score. There are five key elements that are used to makeup that all-important number:

  • 35% of your score is weighted toward your payment history
  • 30% is weighted toward the amounts owed on your credit cards
  • 15% is devoted to length of credit history
  • 10% is generated by new credit
  • 10% comes from types of credit used.

The relative importance of each category depends on the consumer themselves.

If you have an auto loan that you’ve been diligent about paying, you’ve benefitted from that 35% devoted to payment history. By paying it down, you are also contributing to that 30% element of amount owed, since theoretically you are decreasing your credit utilization rate. However, if you’ve been increasing the balance on other forms of credit, that may cancel out some of that good behavior.

If you have a 3 to 5 year car loan, you also have length of credit history going for you. The new credit category doesn’t really apply in this scenario.

Types of Credit

But what’s interesting is the 10% weighted to types of credit used. On a positive note, a car loan alters the types of credit you have, assuming you have things like credit cards or even a mortgage.  However, if you pay it off, you may eliminate this type of installment loan as a type of credit used (this is a very different type of credit than a credit card).

Your ability to pay installment accounts, in addition to others, demonstrates that you are responsible and diligent enough to plan your finances around all these different types of credit.

The Biggest Factor

Weighing against all this, however, is a large factor that requires you to look more holistically at your credit lifestyle. A general rule of thumb is that if you can pay off a debt of any kind, in full, do so (with the exception of a mortgage).