Imagine the car of your dreams on the car dealer’s showroom floor when a salesman comes up to you and says, “I can get you into that car and have you drive it away for just $320 a month!” The offer sounds fantastic, the monthly payment is manageable, and you can have the car today! What’s not to like about this? Evidently many Americans agree with this philosophy of cheap monthly payments to the tune of 40% of all new car loans financed in the second half of this year.

But if you have ever heard the saying that “there is no free lunch” this is especially true for car loans with low monthly payments. Although you may pay less from month-to-month, you also have to consider that you’ll be paying off your loan on an extended payment schedule in exchange for the low payment plan.

As an example, if you bought a mobile phone for only $10 a month, this initially sounds like a good deal. But if you found out that the payments last 7 years, that $600 phone would have cost you $840 at the end. (No phone company does this...so far.) So even if a car dealership spends hours with you in trying to get you a suitable loan, the low payments aren’t what you should be focusing on as much as how long the loan schedule is and what sort of interest you’ll pay on the life of the loan. More...

Getting rid of your damaged car may not be as difficult as you think if you understand what your options are. If the damage isn’t extensive, you can always repair it and sell it. If you were involved in a car accident and you received a claim check from your insurance company, you can use this against the costs of fixing the car. But if your car is wrecked or damaged so much that it isn’t drivable, this presents a different set challenges.

If you are planning on selling it to private parties, one thing to consider is whether your car is a popular model or not. If you own a damaged Toyota Camry or Honda Accord, you’ll be getting a lot more money for your vehicle when compared to a Ford Fiesta, for instance. But it will be a while before anyone takes you up on your offer. You may get phone calls from car salvage companies or junk yards that will offer you very low bids for your car.

If you own a popular model car, you may want to consider selling it off in pieces, otherwise known as “parting it out.” It may surprise you that parting your car out will get you considerably more money than selling it whole. But selling the car piecemeal can take a long time and will require you to be diligent in advertising your car and fielding questions from potential buyers. To some, the extra money gained by selling the car off in parts isn’t worth the time and the trouble. More...

Businesses that buy used cars via the Internet or online have been around for awhile. These firms make selling your car easier than if you walked into a car dealer for trade-in value. But if you do decide to go the dealership route be prepared to have your car seriously undervalued. You won’t get anywhere near Kelley Blue Book figures because the prices listed there are the numbers you’ll see when selling to private parties.

The second reason why you won’t get top dollar at the car dealership is a matter of economics. The people there have to offer you less than Blue Book value because they need to resell it on their lot for a profit. If they buy your trade in at full “retail” price, they won’t make enough money to justify the trade in purchase.

It may be more convenient for you to buy a new car and trade in your old one at the dealership for a one stop shopping experience, but you may sacrifice hundreds or even thousands of dollars on the value of your used car. But if you are seriously considering an online business that buys cars, you should know a few things before you do it. More...