Car Buying Questions - Tip #4 Making Changes to Financing
Tags: auto payments, Car Buying Questions, financing, new car
So you bought your new car and didn’t have much time to research financing. You get home and do some checking to see if you got a good deal or not and you discover you could have gotten a better interest rate from another financial institution. You now find yourself upset and mad over the fact you could be paying less for your new car. Another situation you may find yourself in is you bought gap coverage or an extended warranty and either decide you don’t want anymore or found it cheaper somewhere else. The initial thought running through your head is that it’s too late and you can’t do anything about it, but you are in luck. After purchasing a new car you have a three day period to make any changes to your financing. So you can get new financing or make changes to the existing financing. I found myself in the situation of purchasing gap coverage and finding out the next day I could get it for a lot less through my insurance. I was initially upset, but luckily my insurance agent informed that I have three days to make any changes. I called the dealer and requested to remove the gap coverage. They did it without any hassle. The only thing that needed to be done was to come in and resign the paperwork, but this was a minor inconvenience to save me a thousand dollars!
Todd Jordan said:
Jan 05, 09 at 4:09 pmThanks for sharing the three day information. I’ve known about this but long forgotten it. One thing you mentioned is talking with your insurance company. A good part of what we’ve done with each purchase is discussed it in detail with our insurance before/during/after.
Great series.
Gregg said:
Jan 06, 09 at 1:21 pmOne thing to also look for in a loan is if it is simple interest or front-loaded. With front-loaded it is essentially worked into the loan so if you pre-pay, you are STILL paying the interest!
Also, I’m not certain what you are referring to as gap insurance - I’m not too knowledgeable about insurance, but my insurance agent said they would automatically cover a new car even if I hadn’t reported it for some period of time. I added the new car as soon as we signed, though.
Another to keep in mind is that it takes a pretty good change in rates to make too much difference on car loans. Don’t burn that small difference in time getting TOO many loan quotes. It’s also pretty cheap to refinance car loans if you find out too late you were really ripped off…again, important the original is a simple interest loan.
Kelly said:
Jan 06, 09 at 6:54 pmGregg, you are correct, most insurance companies will cover your new car automatically for a short time before reporting it. Gap insurance is a little bit different than full coverage on a car. Cars significantly depreciate the minute you drive them off the lot. If you get into an accident that results in your car being totaled and the amount you owe is more than what the car is worth, you could have a major loss. Gap insurance is an extra rider on your policy that will cover this difference in case something like this happens.