LowerMyBills.com Advises Home Owners the Benefits of Using HELOC Loans for a
Car Purchase
LOS ANGELES, March 8 /PRNewswire/ -- If you own a home with Equity, there
are several benefits to using a HELOC Loan for a new or used car purchase as
compared with a tradition auto loan. LowerMyBills.com provides the following
tips to the consumer:
* The initial HELOC rate will be lower than the traditional auto loan.
The March 2, 2005 Bankrate Weekly rate roundup of large banks and
thrifts showed the average HELOC to be 5.87% with the average 48-month
auto loan at 7.57% and the average 36-month used car loan to be 8.37%.
Given the March 2nd data, with a HELOC a consumer will get a rate that
is 1.7% lower than the new car loan average and 2.5% lower than the
used car loan average. And even though the HELOC rate is adjustable,
rates would have to rise significantly to match those currently being
offered for traditional auto loans.
* HELOCs will likely have tax advantages. Chances are very good that
the interest rate charged on the HELOC will be tax deductible.
Consult tax advisor on this.
* HELOCs offer more flexibility. A HELOC can be used as a great cash
management tool. In addition to a car loan, other debt can be
consolidated into one, flexible payment. Most HELOCs have an
interest-only payment feature that helps when money gets tight.
Conversely, when there is extra cash HELOC payments can be
accelerated, which in turn will reduce the minimum payment so long as
interest rates have not changes. And no matter how aggressively you
pay down your HELOC debt, if an emergency arises, you can as easily
tap back into your line of credit.
* A HELOC may provide some people with more confidence in the
negotiation process. Many have equated the purchase of a car with a
root canal, with many preferring the root canal. A typical car
purchase involves several transactions including financing the car
purchase, insuring the car, and trading in an existing car -- and
dealers try to make as much money as possible on each of these
transactions. The fewer transactions a buyer makes at the dealer, the
more manageable the situation will be for the buyer. A buyer who uses
a HELOC will not need dealer financing, and may not be dependent on
the dealer taking a trade-in. Insurance can easily be taken care of
prior to a dealer visit in most cases. As a buyer, having the ability
to focus exclusively on negotiating a good price for the car you want
will help you to get exactly that, a good deal.
* When a car is purchased with a HELOC, the title for the car goes to
the buyer, not the lender. With auto purchases, lenders may require
the buyer to increase their comprehensive coverage to ensure that the
lender's risk is covered, whether you agree with them or not. What
this does is increase the buyer's insurance cost. When a car is
purchased with a HELOC, the buyer decides how much comprehensive
insurance is sufficient for them.
If you would like to find the best deals on loans, please log on to
http://www.LowerMyBills.com where you can take advantage of all the great rates.
About LowerMyBills.com
LowerMyBills.com (http://www.lowermybills.com) is the premier, free online
service for consumers to compare the lowest rates on monthly bills and reduce
the cost of living. LowerMyBills.com is the one-stop destination that offers
savings through relationships with more than 400 service providers across
18 categories, including home loans, credit cards, long distance, auto and
health insurance, and wireless services. To date, LowerMyBills.com has helped
more than 500,000 consumers save over $172 million. The Santa Monica,
Calif.-based Company has been featured in The Wall Street Journal, USA Today
and on CNN and talk shows such as "Dr. Phil."
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