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Auto loans on Independence Day

[Jul 4, 2011.]


Writing in Saturday's Coloradoan, Sara Gilbert, who works in credit counseling, suggested:

While our 2011 Independence weekend holiday generally means families getting together for barbecues and parties (especially with Fourth of July falling on a Monday this year), it also is an opportune time for families to come together to discuss their credit and debt in the second half of the year.

Now, it's true that all families are different, but really? Your blogger is already regarded by his relatives as a cantankerous old bore. If he suggested that an Independence Day barbecue was an appropriate opportunity for a financial planning seminar, he'd be bombarded with burger buns, assorted garnish and empty beer cans. Come to think of it--and knowing cousin Joe--not all the cans would be empty. Maybe they do things differently in Colorado.

Time for reflection

Of course, the deeper point that Ms. Gilbert was making was a valid one. Independence Day falls roughly halfway through each year, so it's a good time to ask yourself two questions:

  1. Are you achieving your financial goals for the year?

  2. If not, what can you do to get back on track? Or,

  3. If so, should you now set new, more ambitious objectives?

Auto loans a priority

Ms. Gilbert also highlighted the need to prioritize auto loans (and other secured loans, such as mortgages) over unsecured debt. If people don't pay their mortgages, they could lose their homes. If they don't keep up with their auto loans, they could find their cars being driven away by repo men or women. Imagine how you'd cope without a car. Would you be able to get to work, do your shopping, deliver the kids to where they need to be?

Back in May, The Washington Post explored the importance of prioritizing different sorts of debt. It quoted the Housing Initiative Partnership's Johanna Anderson on the subject:

A credit card bill should not be paid until after all those other things can be paid. People in trouble need to think of credit card companies as ... little yapping dogs. They'll be calling all the time and sending letters constantly, but their bite is not that bad.

Certainly not as bad as losing your car.

Shopping for auto loans

Last Thursday, WALA-TV, a Fox affiliate, aired some advice on its Studio 10 show to those who are shopping around for auto loans. Most of what was said was common sense, but there were a couple of stand-out observations:

  1. Think twice before financing your new car using a home equity loan. If you get into trouble, you could end up losing both your vehicle and the roof over your head.

  2. Shop around for the best rate, terms and requirements.

You can start following that second piece of advice by finding competitive quotes for auto loans on this website.


About Author:

Peter Andrew has been writing about -- and for -- business for more than two decades. For the last couple of years, he has found himself increasingly specializing in the U.S. financial sector.

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