Are you thinking for filing a bankruptcy? What happens to your car?

No one likes to think they might have to declare personal bankruptcy, but if it happens to you, there are things you should know about keeping or acquiring a car.

Thinking for Filing a Bankruptcy?

Keeping a car

If you own your car outright, you can keep it if its fair market value is $5,650 or less. If it’s worth more than that, the bankruptcy trustee is required to sell off the vehicle. The Ontario Executions Act permits a bankrupt to keep one personal-use vehicle as long as its value is under $5,650.

If you bought your vehicle with a loan or on a lease, you have two options when you file for bankruptcy (or for a proposal). 1. You can keep the car, and continue making your loan payments on it; 2. You can give up the car, and anything that is owed to the lender after the car is sold will be included in the proposal or bankruptcy.

Acquiring a car

What about getting a car loan after you’ve filed for bankruptcy? This is by no means a slam-dunk, but it can be done. To find a car loan while in bankruptcy, you can try your bank. It might offer you a loan on condition that you agree to the direct deposit of your pay cheques. There are also Ontario auto loan companies that do financing for bad-credit consumers.

Here are some tips on how to get the financing you need:

● Have a look at your credit profile, and see how you can make it more positive. You have the right to correct any misinformation or to add a note explaining your circumstances.

● A car loan company may give you approval, but you can expect the interest rate on a bad-credit loan to be higher than the best-customer rate, since consumers in bankruptcy are regarded as high-risk borrowers. In these circumstances, be sure to calculate how much of a monthly payment you can afford. When approaching the car loan company, have a monthly payment range clearly in mind. And be realistic about what you can afford!

● Shop around. Make sure your lender is reporting to the credit bureaus regularly. You will be repairing your credit and elevating your credit score. Also, make sure your monthly payments are fixed, not variable. Payday loan outlets are not reliable in this regard.

● You may have to make a down payment, and no matter how much your take-home pay is, you will likely only be approved for a loan under $15,000. If you’re eyeing a car that’s pricier than that, you’ll need to make a bigger down payment.

● Once you’ve been approved for a bankruptcy car loan, consider eventual refinancing. By making all your payments on time, you could qualify for lower interest rates even after a year.

For information about PRUDENT VALUE CARS, visit our web site: www.prudentvaluecars.com 

Should You Buy Your Car New or Used?

Buying a car is one of the biggest purchases you’ll likely ever make. The first question to start with is whether to buy a new vehicle or a used one. Each option has its advantages.

Buying a Smaller Car in Ontario?

WHY TO BUY NEW

Made to Measure — You get to pick the kind of car that you want — with all the latest features and accessories that you want.

Unblemished History — A new car has no wear and tear on it. It’s not been damaged in accidents or suffered ill effects from a history of road usage.

Warranty — You get the manufacturer’s warranty with (at least) a full three years on it. (Yes, you can buy warranties for used cars, but the best warranty you can have as part of the purchase price is the one that accompanies a new vehicle from the automaker.)

Maintenance — A new car won't require maintenance until you’ve driven it several thousand km, and even then only an oil change and tune-up should be necessary. You won’t have to replace the battery, brakes or tires for at least the first few years.

Safety — The newest cars are more likely to have the latest safety systems available, whether mandated by legislation or demanded by consumers.

Higher Fuel Efficiency and Lower Emissions — Newer also means better in terms of Km per liter and eco-friendliness.

Financing — Banks offer lower interest rates on new cars because they are usually worth more and haven’t begun to depreciate.

Convenience — When you’re looking for a new car, the salesperson can do most of the legwork in seeking the model you want. But if you’re looking for a used car, you have to do all the searching, whether on the Internet or in used car lots.

WHY TO BUY USED

• Price — If you don’t have a budget for a five-figure purchase, then buying a used model will mean you’re getting the most car for the least cash. For less than one-half the price of the average new car, you can buy a three- or four-year-old used car that has more room and features than a comparably priced new one.

• Depreciation — A new car will lose a significant chunk of its value the moment you drive it away from the dealership. With a used car, there’s no such concern.

• Insurance Rates — As with financing, insurance rates are impacted by how old the car is, but this time the used model tends to be less expensive.

• Choice — While you can’t order a used car built to your specifications, to order, buying used may enable you to acquire a model, option package, or even wheel design that’s no longer being made.

Ultimately, the decision on whether to buy new or used comes down to issues such as affordability, reliability and safety.

For information about PRUDENT VALUE CARS visit www.prudentvaluecars.com

How to get lower rates on your car insurance?

Car insurance is one of the major costs of owning and operating a vehicle. So, how do you get the best rates available?

First thing to know: Rates will vary not only on who you are, (for example, a male teenager), but also on your driver record. Certain groups, such as first-time drivers, will have to pay higher rates as will drivers who have had accidents or traffic tickets. Both of these groups are assessed as higher-risk motorists.

However, even if you have a poor driving record, you should still seek out the lowest cost car insurance for your particular circumstances.

Canvas the major car insurers

One web site which is really helpful in accessing a wide range of insurers in your locale is: www.insurancehotline.com.

The insurers on this web site will tend to be either national or even multinational firms. But at least by finding out the rates of the major car insurers first, you will have a sense of how much the market is charging for someone with your traffic history. Always be up front about your traffic history, otherwise you may be charged a higher rate than you were originally offered. Use these rates as a basis of comparison when you find other deals.

Check out benefits as well as rates

Be sure to compare not only the premiums charged but also the services and benefits offered by the insurer. Also, ask about rate discounts which are not always advertised, but could be offered if you ask.

For example, rate discounts may apply if:

· you are a senior or a member of the military

· you are a graduate of a driving academy

· you keep your car in a garage or a locked yard.

Search the internet

The internet has taken the drudgery out of comparison shopping for many products including auto insurance. The Web has also been a boom for niche marketing. This means that instead of an inflexible national or multinational insurer, you might instead find a smaller insurer better able to help you at a lower rate. Just be careful that the firm is reputable and conscientious about settling claims.

Remember, if a deal sounds too good to be true, it probably is.

For information visit www.prudentvaluecars.com

Snow Tires Mean Safer Driving and Saving Money

It’s that time of year again - time to pay attention to the first snowfall of the winter and buy a set of winter tires for your car.If you think they’re a costly investment, think again:: they’re much less expensive than getting into a car accident would be.

Best for snow, slush and ice

Don’t make the mistake of thinking you can get through winter unscathed by continuing to use your all-season tires. Winter tires are much better at getting your car through snow, slush and ice. They give you that extra traction, braking and handling that you need when driving in winter weather.

Winter tires have specialized rubber compounds and tread designs to cope with the cold weather. The tread stays flexible, preventing snow buildup and maintaining traction on ice.

Tests done on ice demonstrate that even at the slow speed of 24 km/h, vehicles with winter tires stopped from 1/2 to a full car-length sooner than the same vehicles with all-season tires. If your car isn’t equipped with winter tires, you’re more likely to fishtail in corners and spin out of control on icy patches.

If you’re concerned about the price of winter tires, then do some comparison shopping. You can go to a warehouse store, check prices on the Internet and travel across the border to the U.S. You might be able to benefit from shopping rebates offered by manufactures.

But don’t wait for the first big snowstorm of the season. You don’t want to face the premium prices that will await other motorists who left their tire-buying too late.

Four winter tires, not two

It may be tempting to save money by buying just two winter tires, but that’s a bad idea. It can cause your vehicle to spin unexpectedly because of the greater grip of the two winter tires.

When you do put on winter tires, be sure to maintain them. Keep them properly inflated so that you get the best wear. When you take them off, store them in plastic bags that are stacked horizontally.

Don’t assume that other features can offset the lack of winter tires. ABS (Anti-Lock Brake System), traction control, and vehicle dynamics control systems are limited by the grip your tires can provide.

There’s a faulty assumption among owners of SUVs and other 4WD vehicles that they provide all the safety necessary when driving on ice. Not so. A 4WD vehicle will help you get started from a full stop and will partially help you around corners, but it won’t enable you to stop or slow down more quickly.

Remember: winter tires are a motorist’s best friend in ice and snow.

For information about PRUDENT VALUE CARS, visit our web site: www.prudentvaluecars.com