Green auto loans, what is the deal and how do they work.

The planet is going green! Well that is not true but at least you can do your bit with Green auto loans.  What are green auto loans? How can you qualify? Is it a good deal or simply a marketing gimmick to take cash from the environmentally responsible? This article will attempt to answer these and other questions you need to know to get the most out of green auto loans, or not, whatever might be your choice.

First of all, why go green at all. Well unless you were a member of the Bush cabinet you know that the emission of carbon dioxide to the atmosphere increases the percentage of carbon dioxide in the atmosphere increasing the greenhouse effect of the atmosphere. The greenhouse effect is a wonderful way to keep the world nice and warm allowing life in our beautiful planet. When the balance of gases that cause the greenhouse effect is set out of sync the world heats up causing extreme weather, increase of the water level and other dangerous consequences.

So now we have dealt with the obvious let’s answer the interesting questions.

What are green auto loans? Green auto loans are loans that are offered at a discount price if a certain car type or model is bought. These incentives are provided by the Government and Private finance companies alike. One bank offered a 0.5% discount on their auto loan interest rates for all clients that bought a “green car”. They defined green as a car that does 25 miles or more per gallon in the city. These incentives are great. The lending company looks good, the borrower saves on fuel, earns bragging points and can show off how even his auto loan is green and ultimately we give our planet a small but welcome break.

Is it a good deal or simply a marketing gimmick to take cash from the environmentally responsible?

It all depends what you consider a good deal. Depending on the requirements set by the government or company providing the incentive the vehicle you must buy to qualify will cost much more than the 0.5% interest break can justify. Even inserting the saving you will make on fuel it might be difficult to justify the loan as a normal financial investment. However as a socially responsible it is a sweet way of saving on some of the cost of buying a green car.

The next question is what kind of cars qualify as “green loan cars”?

As we said the incentives vary from country to country or bank to bank and you will need to make sure you understand the conditions of the program. To get a detailed report of fuel economy tips and a guide of the green cars on the market visit www.fueleconomy.gov there you can get a comprehensive analysis of the car models you are interested their fuel consumption and carbon fingerprint as a whole. Going green and saving money, a beautiful combination you should not miss.

How to get the best auto loan deals with poor credit.

Although many choose to ignore their credit rating the fact is that our credit score affects us in more ways than we care to notice. Our credit rating can affect our chances of being granted a house, a car, adoption, and even our jobs. This is never as clear as when we try to get an auto loan. The reason for this is that cars by their very nature are extremely bad investment, very useful and fun to use, but ultimately a bad investment that depreciates in value faster than milk on a summer day. The consequence is that banks and finance companies are very wary to who they lend money to buy a car. The reason is that if the borrower defaults payment getting the car back might not pay for the  capital lent to the client. What does all this mean to you and me? Well if your credit score is low it means that most “kosher” lenders are going to tell us to take our business elsewhere. What can we do when that happens?

What can you do when you got bad credit?

Not much is the unfortunate answer. Apart from paying top dollar for your auto loan. That is the honest answer. When you see, bad credit, no problem or “your job is your credit” adverts, beware. There is a reason why they will take anybody and everybody on. The reason being they charge such outrageous interest rates they can afford the occasional borrower not paying his loan. It does not stop them from repossessing his car though! The best thing you can do when you have bad credit is to try and improve it. Getting an auto loan is actually one of the ways of improving your credit score. Buying an inexpensive car you can pay off quickly will go a long way to proving you are a new man/woman and should be upgraded to premium customer.

Tips for subprime / bad credit customers.

So you have bad credit and you still need a car. How do you go about getting the best deal possible. My first piece of advice is to find your own finance, do not rely on the car dealer. They have an interest in you paying the highest interest and fees possible. It is much better to get a pre-arranged finance deal with a bank or finance company. You can always do your best to shop around and see if the auto dealer can improve your deal. Just one piece of advice on getting finance from the auto dealer, apart from don’t do it, make sure you sign a contract that states your finance is approved and arranged. A favorite “trick” of dealers is to inform you weeks later that your finance fell through and that you will have to do with their second option for financing which of course is much more expensive.

Paying over and above the average because of bad credit is painful, however remember every payment you make on time is a month closer to good credit status.