Debt Consolidation – Be Careful When Trading In Your Car By: Charles Essmeier The automobile has long been recognized as the classic American status symbol. America’s millions of miles of roads and overall lack of long-distance mass transit leave the automobile as the primary method of transportation for most Americans. Because so many people spend so much time in their cars, they often use them to make a personality statement. The car is an extension of the driver. Unfortunately, the debt incurred to pay a car is also often an extension of the driver’s own financial problems. Recent statistics show that the average auto loan is issued for 101% of the purchase price. How can that be? It turns out that many Americans, in their desire to maintain status, usually trade their cars in for a new one while they still owe money on it. The high rate of depreciation on new cars means that consumers often owe more money on their auto loans than their cars are worth, and they make the situation worse by trading in that car on a new one while still owing money on the old one. They simply consolidate the balance of the old loan with the principal of the new loan. Auto manufacturers hit us with a constant barrage of advertising for the latest and greatest models of cars, trucks and sport utility vehicles, along with their latest sales techniques of rebates, discounts and add-ons. Consumers often trade keep their cars only until the desire for another one comes along and then head out to the dealership to trade the old one in. This is usually done without any regard for how much money is owed on the existing vehicle, leading to the consolidation loan that adds the unpaid balance from the old loan to the new one. It isn’t smart to owe more money on a car than it is worth. Cars are generally insured for the replacement value of the vehicle. If you purchase a car and roll $5000 of debt from the previous vehicle into the new loan, you are now driving a car that is not only worth less than you owe, but is also insured for less than you owe. Should you find yourself in an accident, you’ll have a wrecked car and a heavy debt, which is not a good combination. Here are some tips for avoiding this scenario: # Keep your loan term short. If you have to finance that BMW for eight years in order to keep the payments affordable, you should probably be shopping for a Dodge instead. Auto loans that exceed five years are generally unwise unless you’re sure that you’ll keep the car for at least that long. # Make a larger down payment when you buy. The less you borrow, the less you’ll owe several years down the road. # Keep your car until it has been paid off. This one is obvious, but few people actually do it. The least expensive way to own a car is to simply keep it until it won’t run anymore. If you keep the car longer than the loan period, put the amount of your payment aside each month to save as a down payment for the next one. When you make a decision to purchase a car, consider the length of the loan carefully. Most cars lose more than half of their value in five years or less. Try to keep your loan duration as short as possible. An automobile is a valuable tool to own, but it shouldn’t own you. About the Author: ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and http://www.homeequityhelp.net, a site devoted to information regarding home equity lending.

Inside Finance Defeating Credit Card Debt   Plan all your borrowing. Sit down and write down what you absolutely must buy over the next year, and add what you would like to buy. Total the cost. Write down a budget for each month, making sure you have listed all your regular expenses that are fixed and unavoidable, and those over which there is some flexibility. Compare that total with your income. Credit Report On Mortgage Loan   Let us see whether Credit history stop getting Mortgage loan. People have absolutely no idea what is on their credit report! Your credit report has, in the past, been something not readily available to you, or an expensive item to attain. Many people are just not aware that your credit history can determine your financial activities for your entire life. 101 For Individuals And Families   There are 101 health insurance are available for the individuals and families. Below is a combination of ten questions and suggestions that will provide the tools necessary to get a medical insurance policy that will best work for you and your family. If you do not have the time or patience to look into all of the items mentioned above, develop a relationship with an independent insurance agent that specializes in evaluating and servicing health insurance policies. Bad Credit Loans   Bad credit rating usually results from failure to pay off outstanding debts or other credit payments on time. Credit history is based on information retrieved from sources including Public records such as electoral roll information, court judgments and bankruptcies; and Information provided by financial institutions and other lenders such as banks that provide credit accounts and lending facilities. In order to calculate the potential risk in providing loans to the person, most lenders use independent credit reference agencies to gather and assemble this information since they are permitted by law to review a mortgagee's credit report before granting approval. Credit counseling   For the counseling for the credit all the counselors are all the same. In April 2005, Congress passed legislation comprising the most sweeping changes in U.S. bankruptcy law in more than a quarter of a century.