When you walk into a dealership, you won’t be there long before a salesperson asks how you intend to pay for your new car.

When the dealer starts in, just explain that you intend to pay in cash. Saying you’ll be paying in cash doesn’t mean you’re going to open up a briefcase with bricks of money inside, it just means that you’re not interested in dealer or manufacturer financing.

In some cases (if you have perfect credit if the car is about to be replaced by a newer model) dealer-sponsored financing might be a good deal, but most of the time it isn’t. You can usually find better deals on car loans at credit unions and banks.

Telling the dealer that you’re not interested in their financing takes away an opportunity for the dealer to pad the deal with an extra profit. Dealers make money on charging you, so they have ways of slipping various extra fees and charges into your financing arrangement. Forgoing dealer financing also allows you to focus on the features and purchase price of the car you want — a far more important and useful task than focusing on the monthly payment figure.

After declining financing, your next task is negotiating the purchase price of the car. Some survival tips:

Resist the temptation to lease. Leasing is basically an extended car rental. When you lease a car, you must return it at the end of the lease or buy it from the dealer at a predetermined price — usually higher than what you’d pay for a similar used car. When you take a loan out to buy a car, you pay down the loan and then the car is yours, free and clear. The only payments you’ll have to make after that are for gas, repairs, and insurance.

Lots of people lease. Smart, respectable people lease. It’s not a terrible thing to do, but it’s not the best way to keep a car because you’re always making payments. Lease a car for three years and, when the term expires, you need to look for a new lease or shell out thousands to purchase the car you’ve been driving.

Consider factory certified pre-owned cars. “Certified pre-owned” is another term for “used.” But these cars do come with extra assurances about the car’s condition. Going pre-owned can be a really smart move because most cars lose 18% of their value in their first year. A certified pre-owned car is one that has been inspected and fixed before it goes on the market, and comes with a manufacturer-backed warranty like new cars do.

Size up your future car loan. Once you decide you want a new car, the first thing you should do is figure out how many cars you can afford. Calculate this amount before you go shopping; don’t let a car dealer influence your decision.

Figure out how big a loan you should get. A good rule of thumb: Your monthly car payment should be no more than 20% of your disposable income. That means that after you’ve paid all your debts and living expenses, take one-fifth of what’s left. That’s your maximum monthly auto expense. Ideally, this number should cover not only your car payment but also your insurance and fuel costs.

Decide how long you’ll give yourself to repay your car loan. A monthly payment is, essentially, the amount of your loan, plus interest, divided by the number of months you have to pay back the loan. The more months you have to pay it back, the lower the monthly payment will be. But stretching out a car loan too long—or any loan, for that matter—will ultimately cost you a truckload more in interest payments.

For example, say you take out a $20,000 car loan at 5%. If you borrow the money over four years, your monthly payment will be $460.59. At the end of four years, you’ll have paid $2,108.12 in interest.

If you borrow the money over ten years, your monthly payment will only be $211.12, but at the end of 10 years, you’ll have paid $5,455.72 in interest.

Keep your loan term to five years or less (three is ideal) and you should be in good shape. If the monthly payments are too much even for five years, the car you’re looking to buy is probably too expensive.

Consider all pools of money. Should you sell investments to pay for the car instead of borrowing at 7%? That’s a tough call; usually, we’d say no. Do not spend any of your tax-sheltered retirement savings (IRAs, 401(k)s), as you’ll pay through the nose in penalties and taxes and rob from your future. As for taxable investments, consider whether cashing out would have tax implications (you’ll pay 15% on capital gains for investments held longer than one year; investments held less than a year are taxed at your ordinary income-tax rate) or whether you may need that money for something else over the next two to three years.

Should you take out a home equity loan to pay for a car, since the interest of those loans is tax-deductible?

Many people think home loans are the perfect way to finance the purchase of a new car. But the length of the term for a home loan — most require payments over at least 10 years, with penalties for early repayment — will send your total costs through the roof, even after the tax savings. Borrow for no more than five years, lease (if you must) for no more than three. If you’re considering a home-equity line of credit to pay for your car, remember that most HELOCs have a variable interest rate, so it’s possible your payments will rise over time.

How to Find the Best Auto Loan

You’re going to show up at the dealer with your own loan, but where should that loan come from?

Begin by getting a sense of the prevailing rate for a new-car loan. Focus on is the APR or annual percentage rate offered by each lender. The APR is the annual cost of the loan or interest rate. With this number, you can cross-compare loans from one lender to another, so long as the duration of the loans is the same.

You’ll probably get the best deal at a credit union— a members-only, nonprofit bank that can offer lower-cost loans than a traditional bank can. But check out rates at traditional banks and online-only car lenders such as YouAutoMotive Auto Loans.

Don’t be distracted by dealerships offering rebates or zero-percent financing if you obtain your loan through them. “Zero-percent financing” means you are not charged any interest on the loan. So if you were buying a car that cost $24,000 and you had a 48-month car loan, your monthly payment would be $500, without any added interest. A rebate is a money taken off the price of the car. Rebates are also called cash-back deals.

Here’s the thing about those offers: The money you save via interest and rebates is probably coming from somewhere. If you qualify for 0% interest (and most people don’t, as it’s given only to people with near-perfect credit), your dealer won’t budge on the sticker price. If you take the rebate, you won’t get a rock-bottom or 0% interest deal.

That’s why splitting up the financing and purchasing of your car is a good idea: First, you can shop around for the best credit-union car loan, and then you go to the dealer and focus on negotiating the purchase price of the car. Bundling the transactions can lead to lots of stress and added expense — you may be so focused on financing costs that you the punt on the purchase price — to keep them separate.

If you do choose dealer financing, be extra vigilant about what you agree to, and what you’re signing—it’s not uncommon for dealers to add in various unnecessary fees (rustproofing, extended warranty) that fatten their bottom line. Question everything that wasn’t explicitly discussed during negotiation, and don’t be afraid to walk away.

There are some easy ways to catch a break with your dealer when negotiating the price of your car. Timing can be everything:

Shop early in the week. Weekends are prime time for dealers. But if you show up on a Monday, a salesman may be more motivated to cut a deal because business will be slow for the next few days.

Shop at the end of the month. Car dealers get monthly bonuses if they move enough metal. If you show up on the 30th and your salesperson is two cars short of a bonus, he or she may cut you a better deal so to make numbers.

Shop for a car that’s about to be replaced/discontinued. Pretty simple logic here: Things that are about to be considered “old” sell for less. If you’re looking at a 2008 Honda Accord and the 2009s are about to arrive at the dealer, you usually can get a bargain. If the 2009 model is completely new and different from 2008, you’ll save even more. (Who wants to be seen driving the old-looking model? Smart, frugal people, that’s who.) And if Honda decides the Accord isn’t selling much anymore and kills it after the current model year? (OK, fat chance, but this is just an example.) Untold riches await. As do potential maintenance headaches — remember, some cars are unpopular for good reason.

You’ve likely heard about the benefits of refinancing a home loan. With today’s low interest rates, those who have enough equity in their home and the credit required for a refinance could lower their monthly payments considerably.

But did you know that, similarly, you could lower your car payments by refinancing your auto loan?

A common misconception about auto refinancing is that it is similar to home refinancing in complexity and requirements, says Phil Reed, the senior consumer advice editor at auto information website Edmunds.com. The process is actually much simpler, in terms of both qualification criteria (there is more emphasis on the applicant’s credit than on the balance and value of the car, according to Reed) and the time and costs involved.

Here’s what you need to know about auto refinancing and how to determine whether it could help you save.

Are you a good candidate?

Thanks to today’s low interest rates, anyone who purchased and financed a car a few years ago could potentially find an auto loan with a lower rate. A few general guidelines:

* Is your current interest rate significantly higher than what you could get today?

In the fourth quarter of 2008, a 48-month new auto loan issued by a commercial lender averaged 7.06%. Today, the average rate on a 36-month used-car loan is 5.47%, according to Bankrate. And the average rate on a 48-month new car loan is 4.89%.

“Most people aren’t aware of the interest rates’ impact to their monthly payment,” says Reed. Edmunds and other online resources offer basic calculators that allow you to quickly determine just how significant a lower interest rate can be on a monthly loan payment.

* Has your credit score improved?

You could save even more if your financial situation has changed for the better – and your credit score is higher — since you took out that original car loan.

As with any loan, you do need good credit to qualify for auto refinancing. However, the criteria is far less stringent than that associated with home loans, says Reed. According to FICO (the company that calculates the widely-used FICO scores), you need a FICO score of 720 or more to qualify for the best auto loan rates. On a $25,000 36-month loan at 4.784% (the national average as of March 30, 2011), your monthly payment would be $747. On that same loan, you’d have a $828 monthly payment if your FICO score was between 620 and 659, which would put you at an average 11.762% interest rate, according to FICO.

* Are you in a lengthy loan (five- to eight-year term)?

Jack Nerad, executive editorial director and market analyst for Kelley Blue Bookadvises anyone in a lengthy auto loan (with an original five- to eight-year term), to research auto refinancing.

Many people only pay attention to their monthly payment when purchasing a car and have no idea how much of that payment is interest. The longer the term of the loan, the more interest you’ll fork over to the bank until it’s paid off, even if your monthly payment seems low. Refinancing into a loan with a shorter term will lower the total amount of interest you’ll pay, even if it doesn’t considerably lower your monthly payment.

Avoid Refinancing Your Auto Loan If:

* Your existing loan has a prepayment penalty or the new loan is fraught with fees that would negate the potential interest savings.

Anyone seeking an auto refinance should completely understand the details behind the new and existing loan terms, says Reed.

* Refinancing will extend the life of your loan.

Unless you’re seriously in danger of missing payments or defaulting on your loan altogether, avoid refinancing into a loan that would extend your current one. Your monthly payment may go down, but you’ll end up forking more money to the bank or dealer’s financing arm over the life of the new loan.

How to Get Started

Unlike refinancing a mortgage, auto refinancing is quite painless, according to Reed. It can often be handled online, and might take just one or two hours to complete. The first step is to understand your current loan terms (check your monthly statements for the interest rate, remaining balance, and payoff amount) — which you already should have done to determine if you’d benefit from refinancing to begin with.

Reed also advises informing your current lender that you are actively seeking a better deal. They may be willing to refinance your existing loan and save you from switching to a new a lender. As with any rate-based loan, negotiation is always an option, but Reed acknowledges that particularly when dealing with large banks, auto refinancing interest rates may be fairly fixed. Further, the person you are dealing with may not be authorized to make sweeping changes to your loan agreement.

Where to Look?

Don’t ignore dealer finance programs, either. They are currently subsidized by auto manufacturers, making them a potentially competitive resource,

If you’ve ever had to buy car insurance for teens, you know coverage can be brutally expensive.

That’s why it’s especially important for parents of teen drivers to compare prices from multiple insurance companies and look for discounts. Our research uncovered rates for families with a teen driver that ranged from about $1,200 per year to more than $20,000.

Car insurance for teens and their families

To give you a rough idea of how much it’ll cost to insure your teen driver, we looked at rates in the eight most populous states for a family with and without a teenager behind the wheel of two popular models. Here’s how much it cost to add a teen to an insurance policy:

ANNUAL INSURANCE PRICE INCREASE TO ADD A TEEN DRIVER

How to score cheap car insurance for teens

If that sounds like a lot of money, a wide variety of discount are available that can help soften the financial blow of adding a teen driver to your policy. Amounts vary by state and company, but “up to” 10%, 15% or 25% off is a pretty common refrain.

Here are some ways to save money:

• Add the teen to the parents’ policy rather than putting them on their own policy. NerdWallet’s research has shown it’s much less expensive to add a teen to a policy with parents.
• Get good grades. Families with students with a B or better average in school are frequently eligible for car insurance discounts.
• Take driver’s training. Young drivers who took a driver’s education course were less likely to get a traffic ticket, less likely to have an accident and less likely to be in an accident resulting in injury or death than those who didn’t, according to a 2015 University of Nebraska-Lincoln study.
• Leave the car at home. Some insurers offer a discount if the student is attending school at least 100 miles away from home and doesn’t take a car. (Students are still covered when they drive while at home on breaks.)

There are many extended car warranty programs to choose from but it can be a bit tricky to find a “reputable” plan to suit your needs. The best way to choose a reliable extended car warranty program is to find a company that makes the following criteria…

1. Make sure the company is in business for 10 years or more. This assures you that they are not only in the business of selling coverage but also successfully paying claims.
2. You want to choose a company that has an A+ rating with the Better Business Bureau and perhaps more importantly, is accredited by the BBB which holds them to a much higher standard of excellent business practices and customer service.
3. You want the warranty program to be directly underwritten by a US-based insurance carrier holding at least an A rating with an industry rating service such as AM Best or Standard & Poors. This will assure you that if any part of the claims administration process fails the underwriter will directly pick up all claims if needed.

There are also many different levels of coverage available for your vehicle. These levels are Power train, Major Component Plus, High-Tech Component, Component Type Bumper-To-Bumper, or Exclusionary Bumper-To-Bumper coverage. Depending on the age and mileage of the vehicle all or most of these levels could be available. It is important to look through the different levels of coverage for any companies you are considering side-by-side to make sure that you are purchasing the best coverage available for your needs. Do not rely on plan names such as Platinum, Elite, or Gold as they do not always correctly define the level of coverage you are purchasing. Some less than reputable companies will take a very basic plan and label it with a very fancy name. You want to look at the actual list of what is covered to make sure you are getting what you’re paying for.

All in all, an extended car warranty is an excellent investment and can save you thousands of dollars over the term of the coverage. To begin researching the different types of coverage you can visit Auto Advantage and see what the choices are. It is a great idea to fill out the quote request form and let them send you the specifics including coverage details and pricing.

For me, not a day goes by that I do not receive some type of unsolicited telemarketing phone call or piece of mail trying to sell me something.

Unfortunately many of the companies that do direct marketing have a terrible reputation and are generally very poorly rated with the Better Business Bureau. The reason for this is most higher-quality companies do not participate in direct marketing as they generally get enough business through traditional marketing methods. And no business is this more true than in the auto warranty business. There isn’t a single company we have found that direct markets warranty plans that actually has an insurance company underwriting their business. This is the gold standard for determining whether a warranty company is reputable and upstanding. These unscrupulous marketing companies are simply sham companies set up to scam you out of your money. Unfortunately this also goes for auto warranty companies that advertise on the radio or cable television. No “reputable” auto warranty company does any type of television or radio ad.

Purchasing an auto warranty is actually one of the best financial decisions the vehicle owner can make. The way to protect yourself and make sure that you purchase an auto warranty from a company that will be there to pay claims when the need arises is to make sure that you follow certain criteria. Some of the things to make sure of are…
• Be certain that the auto warranty company is in business for 10 years or more to assure that they are successfully paying claims, not just selling warranties.
• Check to make sure that the company is not only A+ rated by the Better Business Bureau but also an accredited BBB company.
• And perhaps most importantly, you want to make sure that the warranty company is backed and insured by a United States-based insurance carrier that has at least an A rating with AM Best. This means that even if the warranty company itself goes out of business your claims will still get paid directly by an underwriter.

The bottom line is you need to do more than just get a quote and assume the plan is a quality auto warranty program. You should always do your research to make sure that you know what you’re getting yourself into. An excellent place to start is one of the most reputable companies in the industry, Auto Advantage Inc. who have been offering automotive warranties and roadside assistance since 1979.

It is wise to buy an auto warranty when investing in a new car. New car warranties can provide four kinds of coverage for your car:

1. The first kind of coverage that you can receive is basic coverage, or a bumper-to-bumper warranty. This kind of warranty provides coverage for the parts of the car from the front bumper to the back bumper.

2. Another kind of coverage that you can receive is a power train warranty. This provides coverage for the parts that make the car run. Such parts include the engine, the driveshaft, the drive axels, and the transmission.

3. In addition, your auto warranty can cover corrosion and rust. This will cover the rust-through problems that you may encounter later on.

4. A final kind of coverage that you can receive is roadside assistance. This is a service that may be given to you when your basic warranty is active. It offers professional assistance when you find yourself stranded on the side of the road due to a vehicle breakdown. It offers many beneficial services such as lockout assistance, refueling assistance, flat tire assistance, and towing.

If you wish to become even more familiar with the details of the coverage that come with your auto warranty, look at your warranty booklet or owner’s manual. If you still do not believe that you are receiving enough coverage and that you want more, it is smart to purchase an extended auto warranty for your car that will suit all of your needs.

The New Year is a time for resolutions. Have you thought about the things you could do to make your home more energy efficient? How about changes that you will ACTUALLY DO?

It isn’t necessary to invest a lot of time and money to make a difference. Little changes such as switching to energy efficient light bulbs add up. Here are some simple, inexpensive measures that you can do to ensure you homes remain energy efficient, warm and comfortable.

Install programmable thermostats

Investing in a programmable thermostat allows homeowners to monitor the indoor temperature of their home remotely via a smart phone or online. By keeping the temperature low when no one is home and programming the thermostat to increase the temperature when everyone is home, annual heating costs can be reduced anywhere between 5 and 15 percent, according to the U.S Department of Energy (DOE). The same principle can be applied during summer months to help save on cooling costs.

Replace air filters

Replacing the furnace’s air filter every three months can also help create a more comfortable environment; a clogged filter can reduce the unit’s overall efficiency and lifespan.

Weather strip and caulk doors and windows

For less than $100, weather-stripping for windows, a door sweep strip and some caulking can help fill any air leaks to limit energy loss.

Install low flow shower heads

For maximum water efficiency, select a shower head with a flow rate of less than 2.5 gpm. Choose from two basic types of low-flow showerheads: aerating and laminar-flow. Aerating showerheads mix air with water, forming a misty spray. Laminar-flow showerheads form individual streams of water.

Use auto turn-off power strips

Smart power strips automatically turn off electricity to all the things you don’t need. The new generation of power strips has quietly evolved to confront the energy usage problem head-on, without losing any of those old winning personality traits like lots of outlets and surge protection.

Install CFL or LED lights

An average American household can save over $200 per year by replacing incandescent bulbs with compact fluorescent (CFL) or LED bulbs.

While hybrid electric vehicle sales make up a small percentage of total vehicle sales in Canada, big incentives and increased competition within this segment have increased sales over the past several years. There are a number of financial and environmental reasons to consider making your next vehicle purchase a hybrid one. To assist you in making this decision we’ve compiled some essential questions you might want answered before buying a hybrid.

1. How does a Hybrid Vehicle Work?

A Hybrid electric vehicle (or HEV) combines the benefits of a conventional internal combustion engine with those of an electric motor. Hybrid vehicles have on-board computers that constantly calculate when to make use of the electric motor, the gas motor, or a combination of the two to achieve maximal fuel efficiency. Most HEVs use the electric motor at low speeds and revert to the gasoline engine at speeds above 30 km/h, or when the electric battery runs low. The gasoline engine is also used in combination with the braking action of the vehicle to recharge the hybrid’s batteries as you drive.

2. What about Plug-in Hybrids?

A plug-in hybrid differs from a traditional HEV in that it makes exclusive use of the electric motor in normal driving scenarios and makes use of the gasoline engine only to extend vehicle range by recharging the battery when it runs low. As the name suggests, the electric battery is also recharged by connecting it to an external power supply. Plug-in hybrids can achieve even better fuel economy than traditional hybrids, especially in city driving scenarios where the electric motor is the sole power supply. Statistics show that plug-in hybrid vehicles use between 40 to 60 percent less fuel than a conventional gasoline vehicle of the same type.

3. Why do Hybrids cost more?

In a word: batteries. The material cost of state-of-the-art lithium ion batteries and engineering costs associated to developing hybrid systems significantly increase the cost of producing a hybrid vehicle. These costs are passed on to the consumer and result in a price up to 20% higher than a comparable gasoline model. The good news, however, is that these extra costs are steadily decreasing, and most experts believe that the price of a hybrid or electric vehicle will match that of a gasoline model within the next 10 years. Some manufacturers even offer cash incentives on their hybrid models.

4. Will buying a Hybrid car pay for itself in savings?

The financial payoff of owning a hybrid will depend largely the vehicle, your driving habits, and the price of fuel. The savings achieved by driving a fuel efficient hybrid will increase as the price of gas increases. Additionally, driving a hybrid will yield better efficiency for city drivers, where the electric motor is used most frequently. This benefit is even more apparent with a plug-in hybrid, as a city driver may often use no gas at all. We recommended that you research the environmental policies of your local, provincial and national government, as there are often cash and tax incentives available to hybrid vehicle owners.

 Want to get the best bang for your buck when looking for a used car deal? It comes down to three factors: What you buy when you buy, and where you buy it.

What you buy will have the greatest impact on the used car deal that you get, and if you make your purchase at the right time you can save big.

It’s an interesting time to buy used, with the average retail used car price reaching a new record high in the first quarter of the year across the broad market, but with low prices in some segments and an increasing number of lease returns set to drive prices down across the board. According to automotive researcher Edmunds.com, the rate of three-year leasing grew 27.1 percent between 2012 and 2013. Those cars leased in 2013 are now flooding the used car market.

In many ways the record high transaction price is more of an indication of the type and age of vehicles coming into the used market, rather than the trend for any single model. SUVs and high-trim pickups make up a growing portion of the lease segment, and their return into the used car market is one factor skewing the average used car market price upward.

Most cars and trucks coming off lease are only 3 years old, and they’re being returned in great shape to avoid excessive wear charges, and they have low miles to avoid excess mileage charges. Those attributes also contribute to their higher prices in the used car market. In short, used cars today are newer than they have been and therefore more expensive.

What to Buy

To find the best deals, look where the new car market is heading and go the opposite way. Sales of compact SUVs are hot right now, and many of those buyers are moving to them from sub compact, compact, and midsize cars. Low fuel prices and the steadily improving economy have increased the demand for truck and SUVs, while sales of smaller cars have languished.

“Interestingly, some of the less popular segments in today’s market were the most popular leased vehicles in 2013: mid-size cars, compact cars and entry luxury cars,” said Edmunds analyst Ivan Drury in a recent press release.

That means it’s a great time to be looking for cars like the Honda Civic, Hyundai Sonata, Mini Cooper, Acura ILX, or Cadillac ATS. Those smaller cars and midsize sedans are being returned in excellent condition with low miles when their leases end, but the supply is outpacing the demand, creating opportunities for buyers.

More opportunities come from owned compact and midsize vehicles that are being traded in as down payments on SUVs and crossovers, though they’re likely to be older with higher mileage.

When to Buy a Used Car

Seasonal trends can also create chances to get a great used car deal. Typically, used car prices are at their lowest in the early winter, with dealers looking to reduce inventory just before the end of the year. Prices then typically climb through the spring and summer months before starting to decline through the late fall.

If you’re looking for a specific vehicle, you can learn from some annual trends. As summer approaches, demand for convertibles naturally rises. When winter nears, prices for all-wheel drive vehicles, crossovers, and SUVs climb. Buy a convertible in the late fall or an SUV in the spring, and you can save some money.

Fuel prices also have a great impact on buying behavior and used car prices. The current surge in SUV and pickup buying is being driven in a large part by cheap gas prices. That has also reduced the demand for small vehicles and alternative-fuel cars and trucks. With cheap gas and a redesigned Toyota Prius recently arriving on the market, it would seem to be an excellent time to buy a three-year-old Prius or any of the other hybrid models available.

When fuel prices start to rise – and they certainly will at some point – many trucks and large SUV owners will start to see their total cost of ownership dramatically rise. Those thirsty cars and trucks will begin to flood the used market.

Pickup trucks are an interesting segment of the market. There are two typical buying groups, including those who buy their trucks for work, use them hard, and keep them forever. The pickup lease customer, on the other hand, often has a higher trim level truck with more high-tech features. The fancier trucks typically depreciate at a much faster rate, even though very few ever leave the pavement or do much hard work. The technology that was expensive when the lease was signed isn’t state of the art three years later when the lease expires, and used car buyers don’t put as much value on the extras as new car buyers do. The premium trucks can offer excellent value when purchased on the used market and are durable enough to have long lives with their second owners.

Where to Buy

Franchised new car dealers, on the other hand, have the greater overhead that you will help pay for with a higher price on your used car purchase. Many also offer certified pre-owned cars that come with a certain level of inspection, refurbishment, and often a warranty and special financing opportunities, along with a higher price tag.

U.S. News & World Report’s used car site offers a number of tools for shoppers including rankings and pricing tools, plus a search system that can find cars and trucks in your area. Find out how much car you can afford using our calculator, and be sure to have your own financing lined up before you step foot in a car dealership.