(WTNH) – How much do you pay for your car loan? If you haven’t paid it special attention, you may be paying a lot more than in previous years. We stretch your money with what a report found.
For many of us, our vehicle is one of the necessities of life. You pay what you owe, to get the family where they need to go and get to work on time.
But one Consumer reports investigation revealed that you may be paying too much for your auto insurance and not knowing it.
Here are a few takeaways you might want to know about.
Consumer Reports found that consumers who may have similar finances, incomes, and vehicles paid a large difference in their loans. One paid 4.9% APR and the other 14.1%.
The important thing to remember is the good credit rating you are told to follow, maybe it won’t get you your best loan. Remember that you could be paying thousands more over the price of the car with a high APR on the loan.
The survey also found that many people had obtained loans that they could not afford. As a rule of thumb, you shouldn’t be spending more than 10% of your income on auto debt. It poses great financial risk, including default. But Consumer Report found that nearly 25% of borrowers spend more than that.
Other findings include:
- Income verification was rare
- Common delinquencies and repossessions
- About 5% of borrowers or 1 in 20 have been affected.
At the end of the day, be your own advocate. Be honest with yourself about what you can afford.
Some experts have said that the funding you get has more to do with your combat readiness when you walk into the showroom, rather than your financial history. If you don’t know what to do, recruit a friend or an expert to accompany you.