Auto Loans Information and Savings

UpdatedDec 1, 2010

1 min read

Key Takeaways:

Avoid financing a car you cannot afford
Know your credit score before getting an auto loan
Compare banks, credit unions and the dealer's finance arm loan offers before securing a loan

Getting an Auto Loan

Shopping for auto loans can be confusing. Buying a car is one of the biggest purchases you will make, so it is important to make a plan before you make a decision. Remember, the person selling you the car wants to make the sale; it is up to you to make sure that you have done your homework so you can make the best purchase necessary.

Everything You Need to Know About Auto Loans

The first thing you will need is a budget. Don't buy more car than you can afford. You will need to decide whether a used car or new car is better for you. You will also need to choose between buying a car and leasing one.

When looking for auto loans, you should know your credit score before you start shopping for a car and for auto loans. The more knowledge you have about your credit situation, the less likely you will have a finance officer stick you into a worse auto loan than you deserve.

Auto loans are offered by different sources, such as banks, credit unions, and the dealers' own finance arms. Make sure to shop around, to get the lowest interest rate and a payment you can afford.

Use Bills.com as your online resource for learning more about auto loans and to find a lender who best fits your needs.

10 Comments

AAlexis McCormick, Oct, 2022

Hi, I have an auto loan for 17k I have 38k saved in the bank. When I called to see what the pay off for the vehicle was if I were to pay off early. It was exactly what I owed on the car as they built the interest into the loan I guess. So it would not be cheaper to pay off early. What do I do from here? I want to keep full coverage on the car as it’s a nice car. At the same time I work from home and hardly drive 15 miles a week. So I’ve also been considering doing liability. Okay thoughts???

TTed, Oct, 2022

Hello Alexis, This is Josh I am the Moderator of this space. Are you sure they did not just prorate the remainder of the month? How would you know if they added additional interest? If you are going to pay the total sum amount regardless weather you pay now or later, it may be wise to invest your additional savings. Keep aside the remainder of the cost in savings in case of a rainy day to reduce risk. What do you mean by doing liability?

SSheila Morrison, Jul, 2020

On April 21st my husband bought a new car in the state of Texas. On June 14th, he passed away from a heart attack. I did not cosign on the loan and it was in his name only (both car and loan). I am trying to give the car back to the lender because I cannot make the $657 a month payment. His estate will not be able to cover the debt. Can the lender force me to pay the difference of what they sell the car for and what was owed on the loan (we had not had it long enough to even make one payment). And if I don't pay, will it affect my personal credit?

DDaniel Cohen, Jul, 2020

Sheila, my condolences on the passing of your husband. I am not a lawyer so the information I share is not to be considered legal advice.

Did your husband's estate go through probate? Or did the two of you have a written an agreement to own property together as "survivorship community property," where community property can transfer to surviving spouse without probate?

I believe it is possible that you could be responsible for the debt as Texas is a community property state. Short of a judgment against you that would come about only after you were sued as a result of a lawsuit, I don't believe it will affect your credit, as it shouldn't be present on your credit report if the loan was solely in his name.

I strongly recommend that you speak with an attorney to make sure there are no loose ends and that you make the best decisions at a very tough time for you.

BBill, Feb, 2014

I hope you can give me some advice or help in what to do about my situation. I bought a 2012 Chevy truck, brand-new, and got it financed with GM financial. My credit is not the greatest — in the high 500s. I am paying high interest and would like to refinance the truck to a lower interest rate and to lower my payments. My payment is $830 a month, which is not the easy to make, and I can't find a bank or credit union to refinance the truck. I would appreciate any kind of help you could offer.

BBill, Feb, 2014

If you owe more than the vehicle is worth, lenders may not want to refinance your loan. They may also shy away from refinancing your loan because of your credit score. If that is the problem, focus on improving your credit score so you qualify for a refinance.

If other debts press in on you, use the Bills.com Debt Coach tool to learn your options for resolving your other debts.

EErika, Apr, 2013

My husband and I went to get a car for me to drive to work. I could not get an auto loan or be a cosigner with him, so we got the car in his name only. We agreed the car would be mine, I would make the payments, and when the car is paid off he would sign it over to me. I paid the down payment and 58 of the 60 payments. He separated from me in November and took the car with him so I told him he had to pay the remaning two payments. I think it's unfair I have paid for 95% of the car! About a year prior to our separation, he totaled my car. Then three months later he got a job. We were sharing the new car for at least 9 months. It was frustrating to share the car, but he felt like he had priority with the car just because he had a job. Sometimes I needed the car to drive to dr appts, etc., where his parents couldn't take me (I had to carpool with them). He threatened me to quit his job if he couldn't get to work. He talked about getting his own car for months but never did anything. He constantly complained that the accident wasn't his fault. I still think I should have gotten the car because I paid for it. It's completely unfair that I paid for it and he gets to drive it. Is there anything I can do - either to get the car or get some money from the car (to pay my current new car off)?

BBill, Apr, 2013

Talk to a lawyer who has family law experience in your state immediately. When a couple divorces, each person is not allowed to possess whatever property they feel entitled to. The law doesn't work that way.

What I am about to write is an oversimplification, but it help illustrates the point I just made. If you live in a community property state and divorce, each spouse gets half of what the couple bought with the money each earned while married. If you live in a common law state and divorce, the rules are even simpler: Each spouse gets what they bought with their earnings.

There are many exceptions to the rules I just mentioned, and facts in each case matter. That is why you need to talk to a divorce lawyer who will analyze your finances and can advise you to your rights and liabilities.

EErika, Apr, 2013

Thanks. Is North Carolina a common law state as you referred to?

BBill, Apr, 2013

Regarding family law, North Carolina is a common law state.