All About Financial Matters

Archive for September, 2007

Much like the bad credit home loan market, the bad credit automobile loan market is a crowded and competitive arena.  If you find yourself in the position of needing a bad credit automobile loan use caution in selecting your lender.  While most lenders dealing in the bad credit car loan sector are honest, there are those who skirt the law with predatory loan practices.  Knowledge is the best defense against these dishonest loan agents.
 
Know more about your own credit than the lenders do.  Arm yourself with a recent credit report and FICO score.  If a lender says he has different information about your credit than you do, ask him for his sources.
If at all possible deal with a financial institution where you already have a banking relationship.  Many banks and credit unions will help you apply for “second chance” programs.  They know that when they help their customers in the short run they will retain the business of those customers in the long run.

Be Careful With Who You Apply With - Be extremely cautious when responding to any solicitations from bad credit lenders no matter how those solicitations are received.  Do not give any sensitive personal information to a lender until you have checked the company out with the Better Business Bureau.  The best course of action is to initiate contact with a lender yourself from a list you have compiled through the Better Business Bureau and personal references.
Don’t be embarrassed by the fact that you are having to inquire about a bad credit automobile loan.  Many lenders make more money off of their bad credit customers than off of their more credit worthy customers.

Find out the current interest rates - Interest rates fluctuate from day to day, so check them often.  Depending upon the state of your credit you can expect to pay from as little as 2% above the average rate to as much as 17% above the average rate.  Rates above this are in many cases illegal.  Watch out for lenders who charge the legal rates but tack on an assortment of finance charges and prepayment penalties.

Research The Price of Your Car - When you have narrowed down your car choices, research the value of the different models.  The price of a car being financed with a bad credit loan may be a little higher than the same car for a good credit loan, however, the difference should only be a few hundred dollars not a few thousand dollars.  You can become trapped in loan if the dealer inflates the price to the point where the car is financed for more than it is worth.
Just as you will shop for your car, shop for your lender and let all of them know that you are talking with more than one company.  If you think a lender can do better, state your case and ask for different terms.

Any reputable lender will put its proposals in writing with all the blanks filled in.  Further, you should always be allowed ample time to read all of the loan documents.  Walk away from any lender who pushes you to sign something that you haven’t had time to read.
 
There are compromises you will have to make because you need to obtain a bad credit auto loan.  These compromises don’t include being taken advantage of by a predatory lender.  A bad credit auto loan should be a stepping stone to reestablishing your credit not a trap that may result in additional credit difficulties.

To view our recommended bad credit auto lenders, visit this page:

The tech sector will continue to be the place to make money but it is also a sector that can be quite volatile. One major mistake and you can find yourself on the sidelines looking in.

Over the last two weeks, I have been noticing several key bellwether technology stocks warning of slower growth or reduced expectations. The problem is when the NASDAQ is rising as it has been in 2006, you really have to take a step back and evaluate the current situation.

Internet advertising king Google Inc. (GOOG) recently warned investors to expect slower growth. The stock sold off and investors started to question the valuation of the tech sector.

It was the first warning ever by Google and shows that no company is immune to bad news. Of course, Google executives subsequently tried to reassure investors that all was not bad and that it would eventually become a $100 billion company.

The reality is Google appears to be giving out mixed signals and in fact is just trying to do some damage control, especially when the stock has seen tens of billions of dollars in market-cap vaporized. The truth of the matter is there clearly are some growth issues. And if the advertising cycle reverses or slows, Google could be heading much lower than the current price.

Just last week, another Internet bellwether stock, Yahoo Inc. (YHOO) warned investors to expect lower revenues in its first quarter, something that should be viewed a red flag to investors.

Research in Motion (RIMM, TSX/RIM) made a downward revision in its Q4 earnings to between $0.64 and $0.64 per diluted share, down from the previous forecast of $0.76-$0.81. Q4 revenues were axed to between $550 million and $560 million, down from $590 million to $620 million. The consensus Street estimate was $0.78 per diluted share on revenues of $608.6 million according to Thomson First Call.

RIMM attributed the decline to uncertainty regarding its e-mail service in the United States, but it may also signal market share gains by its rivals.

On Monday, bellwether Texas Instruments (TXN), the top supplier of mobile phone chips, gave the market a mixed message. Texas increased the lower end of its profit range for the first quarter to $0.31 per share, up from the previous low end of $0.29 per share. The problem was the top end was left unchanged at $0.33 per share, something the market was clearly not happy about, with some selling in the stock in after hours trading on Monday.

The point is the market wants to hear good news and Texas failed to provide it. Even on the revenue side, the new range of $3.22 billion to $3.35 billion was marginally light on the top end compared to the previous range of $3.11 billion to $3.38 billion provided in January.

So despite the strong sentiment towards the NASDAQ and tech stocks this year, the recent reports from some of the key bellwether stocks may make you want to take a pause.

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George Leong is the founder of Investornomics.com ( investornomics.com investornomics.com) - a provider of independent stock and option trading commentary. He has a degree in finance/economics and offers over 15 years of research experience in investing and trading.