Arm yourself with knowledge when shopping for an auto loan

Companies, such as dealerships or other lenders, may offer military rates or discounts to bring you into the showroom, but that doesn’t mean the financing offer is the best one you can get.  We’ve also heard that some companies may inaccurately promise benefits under the Service members Civil Relief Act (SCRA) to military customers. If you move and need a vehicle right away, your circumstances may mean that you  make a rushed decision and not shop around for the best financing. 

  1. Reductions of interest rate under the Service members Civil Relief Act. We’ve heard from service members who were led to believe it was okay to sign for a loan with a high interest rate since they were active-duty and therefore, the SCRA would drop the interest rate to 6 percent. Unfortunately, that  is not true. If you take out a loan to buy a vehicle after going on active duty, the SCRA interest rate cap will not apply – that cap is only for pre-service loans. You can find out more about your rights under the SCRA here. 
  2. Permission from your lender to take your vehicle overseas. If you think you might be assigned overseas, make sure before you sign the auto loan contract that your lender will allow your vehicle to be taken out of the country – many won’t.  If your lender has that restriction and will not waive it, then you should reconsider borrowing from them.  Shipping companies usually require your lender to write a letter of approval before they will accept your car for overseas shipment. Don’t be left with a big problem at the last minute because the fine print of your loan contract says you can’t take the vehicle with you.
  3. Special military interest rates or discounts. If you’re offered a rate or promotion based on being a member of the military and you decide it’s the best financing for you, make sure you receive that rate in the final paperwork. You shouldn’t agree to anything at signing that you didn’t agree to beforehand. If the company tries to change the loan terms at the last minute, you can refuse to sign the paperwork and continue to shop around for the best auto loan for you.  Remember, interest rates and terms are negotiable until the contract is signed.

 

If you’re struggling with a high interest auto loan payment, you may be able to refinance your loan for a lower rate by contacting your loan servicer.  If your current loan servicer can’t help you – shop around! Always remember to stay focused on the total cost when shopping. Lower monthly payments for a longer period can cost you thousands of dollars in interest. 

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Does Your Warranty Include Wear & Tear Coverage?

When purchasing extended coverage for your vehicle is important to understand what the coverage does and does not cover. One of the main items that some “shady” companies will exclude from coverage is breakdowns of covered parts that have failed due to wear & tear. A wear & tear failure is a breakdown of the part has not completely failed but is no longer working the way the manufacturer intended to. This means that if a covered part has not completely failed, but is beginning to fail but has not stopped working completely or broken into pieces they would exclude it from their coverage.

It is important to know the difference between wear & tear items and scheduled maintenance items. Scheduled maintenance items are not covered by any extended automobile warranty. Examples of scheduled maintenance items are oil changes, tune-ups, tires, wiper blades, batteries, etc.

All “reputable” auto warranty companies will include breakdowns of covered parts that have failed for any reason including wear & tear. All Auto Advantage auto warranty programs include breakdowns due to wear & tear.

 

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Does An Extended Auto Warranty Cover Overheating?

When you are choosing an extended auto warranty program is important to look through the various exclusions of the policy you are purchasing. Most reputable auto warranty providers make their inclusions and exclusions clear and concise and have no mixed wording to confuse a repair shop or customer. However, some of the shadier companies out there, typically without a direct underwriter to get out of many different claim situations.

Overheating is a good example of this. Some companies will exclude any repair, even if it has nothing to do with the vehicle overheating if there is any sign that an overheat has occurred. More reputable providers will cover the failure of any covered part as long as owner negligence did not close the failure. Owner negligence in reference to a vehicle that is overheated would be if a driver would continue to operate the vehicle even after the gauges or warning lights have come on. This would obviously cause additional damage to the vehicle from continued operation after the overheat and would not be covered by any warranty program. So in conclusion, it is not overheating that is not covered by a quality auto warranty program, it is the damage caused to the vehicle by the continued operation after the vehicle has overheated.

To be sure you get one of the highest quality auto warranty is available you can request a quote from Auto Advantage or other A+ rated and BBB accredited warranty companies.

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