September 2012 Auto Loans FROM PAGE 1


loans and the Annual Percentage Rate (APR) for which you qualify. The APR is a required disclosure showing the total cost of the loan, including interest charges and many fees, expressed as a yearly rate.


Consider getting “pre-qualified” by


a bank or credit union for a specific loan amount. “This doesn’t mean you have been approved for a loan,” explained Joni Creamean, Chief of the FDIC’s Consumer Response Center. “But it will help you know approximately how much you can afford to spend on a car and how much it will cost you in finance charges before you get to the dealership.”


If you are trading in a vehicle,


research how much your car is worth. “The more you know about the car’s current value before you go into the dealership, the more likely you will be to get a good deal on the trade-in,” said Heather Gratton, an FDIC Senior Financial Analyst.


At the Dealership If you have been pre-approved


for a bank loan, consumer advocates suggest keeping the financing decision separate from the negotiations on the price of the car. If you negotiate the vehicle price with the dealer before discussing a possible trade-in and financing, it is easier to see if you are getting a good price on the car.


Be cautious about offers to “pay


off” anything you owe on a car to be traded in. A car dealer might advertise that it will pay off the balance of the loan on your trade-in vehicle, no matter how much you owe. However, if you have “negative equity” — you owe more on the car being traded in than it is worth — the promise to pay off the entire loan may be misleading. Instead of being paid off, the amount you owe on your trade-in may be rolled into your new loan, deducted from your down payment, or both. The result would be an increase in your monthly payments and, most likely, a major jump in the total cost of the loan after factoring in the interest to be paid.


If you still owe money on a car that


you plan to trade in, consider waiting to make the new auto purchase until you have paid off your existing loan. “Then, when you buy a new car you will not have to borrow as much money and you will pay less in interest over the life of the new loan,” explained Luke W. Reynolds, FDIC Acting Associate Director for Community Affairs.


Remember that, as with the price


of the vehicle, the interest rate and other financing terms offered are typically negotiable. “Instead of relying solely on a dealer’s rate quote, you should speak with multiple lenders about the APRs they can offer you and let them know you are comparison shopping,” suggested Keith Ernst, an Associate Director of the FDIC’s Division of Depositor and Consumer Protection in charge of consumer research. He added, “Explore any opportunities to lower your financing cost with


www.hamptonroadsmessenger.com


each lender by asking about options such as different repayment periods or discounts for setting up automatic payments.”


Many auto dealers offer discounted


loans (such as zero-percent financing) or cash rebates on car purchases, but usually not both. You may sometimes find the dealership financing more advantageous than bank financing.


Make sure you understand what


any additional products you agree to purchase will or won’t do, and how much they cost. The prices of those extras will be added to your original loan amount and will increase your total financing cost. Remember that products such as extended warranties or credit insurance (which could cover loan payments if you die, become ill or unemployed) are optional purchases. If you are interested, you don’t have to buy them at the dealership. You may be able to find a better or cheaper offer elsewhere.


Read the contract carefully before


you sign it. Federal law requires lenders to tell you the terms of a loan, including the APR and the total cost. Federal and state laws also prohibit unfair, deceptive and/or abusive business practices. “Before signing any loan documents, you should fully understand all the aspects of the transaction,” said Ernst. “Verify that anything that was told to you is reflected in the agreement, including the treatment of a trade-in.”


Don’t rush into making a decision


to buy a car or accept financing. Perhaps you’ve read in the news about reports from consumer groups that people sometimes mistakenly believed that a car purchase and dealer financing were final. The reports suggest that these consumers signed contracts or attachments (with titles such as “Special Delivery Agreement,” “Rescission Agreement,” or “Supplemental Agreement”), took the vehicle home, and then days or weeks later were asked to return to sign a new financing agreement with a higher interest rate or other less-favorable terms. Consumer groups refer to these as “yo-yo” scams.


The FTC has been seeking public


comment to help evaluate the extent to which these concerns are found in the marketplace. To avoid falling for a scam — or just getting into a deal you don’t want or don’t understand — be careful to read through all the terms and conditions of any documents you are asked to sign.


“If you are unsure the loan is


finalized, you may want to leave the car at the dealership and continue to comparison shop until the financing process is complete,” added Gratton. “This way you can be certain about the final financing terms.”


Need help with


your bottom line? Advertise in the


Hampton Roads Messenger Call (757) 575-1863


The Hampton Roads Messenger


Henry Cisneros: U.S. Should Make “Life Long Homes” A Priority


BY JUDITH GRAHAM What will it


take for Americans to age successfully in place, rather than have to bounce


from


home to assisted living to nursing home and so on? This


question


has immediate importance for policy makers and families as an estimated 10,000 baby boomers turn 65 every day.


It’s the subject of a new book,


Independent for Life: Homes and Neighborhoods for an Aging America, (University of Texas Press) authored by more than a dozen leading experts in aging and housing and co-edited by Henry Cisneros, a four-term mayor of San Antonio and former of the U.S. Secretary of Housing and Urban Development.


Cisneros, who now runs a company


specializing in urban real estate, spent an hour discussing his thoughts about aging in place with Kaiser News Service reporter Judith Graham. That interview has been edited for length and clarity.


Q: You start this book talking about your elderly mother. Tell me about her.


Henry Cisneros: My Mom and


Dad bought the home across the alley from her mother’s home in 1945. It was a lower-middle-class neighborhood of civil service workers -- all Latinos. It had the feeling of a Norman Rockwell picture, only all the faces were brown.


My Dad passed away in 2006 at


age 89, having had a stroke some years before. But my Mom, 87, lives there still. The house is essentially the same as it was, with some adjustments. We put a ramp on the side of the house leading to a deck. We raised the toilet, lowered the sinks, created a walk-in shower. Changed the lighting in the den so my Dad could read. Put in window guards, an alarm and outdoor lighting for my Mom because the neighborhood is somewhat in decline.


Q. Do you see her often? Henry Cisneros: I try to visit her


about every second or third day, but I talk to her every day by phone. She is a classic case of a person aging in place. She’s a healthy, lanky, tall woman who’s always been physically strong. But in recent years she’s started to slow down. She manages all her own affairs. I don’t think there’s a tractor strong enough to pull her from that house.


Until recently, on three sides, all


her neighbors were her age or older. The lady to the left died this year at 97. The lady to the right went to a nursing home and died in her late 80s. And the lady across the street died at 90-plus. All stayed in their homes until very late. Aging in place in that neighborhood means older women living on their own.


Q. What lessons do you take from


your mom’s experience? H.C.: Seniors fear being unable


to communicate, being lonely, feeling insecure. Especially people who all their lives have had other people around them -- family, neighbors -- and now they go entire days and never see anybody.


Imagine being older, a step


slower, a bit more fragile. Add to that being lonely, edging to depression and unsure about how you’re going to get everything done that you used to do--but wanting above all to stay in your own home and keep on being independent. That’s hard.


Q. What kinds of policies do you think are needed?


H.C.: First, I’d like to see us


commit as a nation to creating lifelong homes. Only 4 percent of the 65-plus population goes to a nursing home. Most are at home for a long, long time. We should make this a priority, just as


LIFE LONG HOMES PAGE 6


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