Only about 20% of consumers opt to lease their vehicle.  A decade ago, that percentage was much higher, over 30%, but the post-millennium surge of dealer offers like 0% financing and cash-back incentives made buying more enticing.  Before we get into why an auto loan is better than a lease, let’s review the advantages of a lease:

Leasing Advantages

1. Driving a New Car Every Two Years
2. Lower Initial Cash Outlay
3. Lower Maintenance Cost
4. No Negative Equity

Negative equity, known colloquially as being “upside-down” on your auto loan, means that you owe more than the car is worth.  This is due to depreciation.  Sadly, in 2008 nearly 30% of trade-ins carried negative equity, and the average debt on such vehicles was nearly $4000.  Many consumers are just afraid of getting themselves into such an upside-down situation, and so forego financing altogether.

These benefits aside, leasing comes with some distinct disadvantages.

Leasing Disadvantages

1. No Chance to Build Equity
2. Only Cheaper in the Short-Term
3. Mileage and Wear & Tear Restrictions
4. Neverending Cycle of Car Payments / Never Paid off

A last but important disadvantage to leasing is no sense of ownership.  Speaking from personal experience, that highly sought-after new car smell, ever-present in leased vehicles, can end up turning on you, making you feel like you’re driving a rental vehicle (and by some definitions you are).

Additionally, a leased vehicle is never paid off.  Even the longest-term auto loans are paid off in 5-6 years.  In the same way you wouldn’t want to rent an apartment or house your whole life, forking over thousands of dollars a year to a landlord instead of putting money toward your own stake in the property, you don’t want to be making payments on a vehicle that you will never be able to drive free of charge or resell.

For these reasons, we recommend applying for an auto loan instead of leasing.  That said, if you absolutely have to drive a new vehicle every two years, and you love it always to be a new one, then an auto lease might be the way to go.  Often you can get more car for the money.  But remember:  80% of US drivers choose to buy their vehicle because they know it’s the best choice financially.

Some months ago, we started getting emails from consumers who had been contacted by phone from a telemarketing company calling themselves “auto loans network.”

Our website and service is in no way associated with that telemarketing campaign. The similarity in names is simply an unfortunate coincidence.

When you fill out an application on our site, you should be contacted by an auto loan lender regarding your approval status.  You should never receive unsolicited phone calls, and the calls you do receive should be from a REAL person, not a voice recording.

In any case, writing this article with the title we gave it should probably start moving us to the top of the search results when anyone searches for “auto loan network scam.”  This is a double-edged sword.  On the one hand, we, as a company, want to distance ourselves as much as possible from this telemarketing campaign.  At the same time, we want to defend ourselves.

If you want an auto loan, we urge you to use our site and our site alone to apply for one, and not lend credence to unsolicited telemarketing campaigns.

So you need a new car, or at least you want one pretty badly.  But you’ve been rejected for a line of credit before, or you’re afraid of being rejected.  First off, don’t get down about it.  Studies show that nearly 23% of Americans have bad credit (a credit score of about 620 or below), and we know from experience that nearly every auto loan applicant is anxious about getting approved.  We urge you to be consoled by the fact that if you’re reading this, you’re already in one of the best spots for getting approved.

How to Get your Auto Loan Line of Credit Approved

• Use the Internet. More specifically, use our website.  When you fill out our application form, your credit request is “pinged” to a vast network of lenders, thereby maximizing your chances of securing the right loan you need for the car you want.
• Be Honest. When you complete any application form, online or offline, be as honest and accurate as possible with the data you enter.  Why?  Lenders often use sophisticated technology to double-check your answers.  If you say you live in Arizona but your Home Phone Number is from North Carolina, a red flag will be thrown and your chances of approval will be crushed.  Same with email and SSN.
• Be Open to Dealer Finance. If you have poor credit, dealer financing or a buy-here pay-here dealership may be your best option.  Yes, the interest rate will be higher, but the minimums for credit score and income are typically much lower than those for a bank or credit union.
• Cosigners and Down Payments. If you can either secure a cosigner or put down a substantial down payment (10-20%), then lenders are much more likely to approve your loan.

Ultimately, it’s best to remember than lenders, dealers, banks, and other financial institutions that extend credit are incurring risk when they lend a consumer $5, $10, $20, or $30+ thousand dollars to buy an automobile.  You, as a consumer, want to make them as comfortable as possible giving you that amount of money. This only maximizes your chances of auto credit acceptance.

We really do the rest of the work for you.  We work hard to offer you the most vast network of potential lenders available.  Don’t go filling out paperwork all over town — our service can put you in touch with your most optimal local lender given your vehicle needs, credit, income, and a zillion other factors.  That means the perfect match between lender and borrower, which means the best deal.  That’s the magic of The Auto Loan Network, right at your fingers.

According to Google Insights, the number of searches for “online auto loan” has climbed 130% in the last year.  Here’s why:  the economic downturn, so hard-hitting to the automotive industry, has put dealers under greater financial stress.  Not only are consumers buying fewer cars, it’s harder for them to get their credit approved.  For most, gone are the days of walking onto a lot and getting approved right off.  Increasingly, prospective car buyers are turning to online resources to compare financing options and secure their auto loans.  Web-based auto loan services like ours increase efficiency, ease of use, and chances of approval over more traditional means.

How Auto Loans Work Online

Real transparency between business and consumer can be hard to find on the internet, especially in the realm of financial services.  At The Auto Loan Network, we go against that tide.  We realize that you, the consumer, has the right to know how this process works, and why it’s advantageous for you.

The Process of Getting an Auto Loan on the Web

1. Your Search Query: you search on one of the major search engines on a keyword that describes your needs, such as “car loans for people with bad credit,” or “auto loans in seattle,” or “online auto loan.”
2. Your Landing Page: you click on anywhere from 1 to 10 search results that come up.  Maybe you click on a paid advertisement like those in your sidebar, or maybe you click in the “organic” results (the listings in the middle of the page).  Websites have tried to optimize their content, architecture, and marketing strategy to make sure they appear when you search for a keyword relevant to their service offerings.
3. Your Application: you fill out an application form like this one.  This is, most accurately, a pre-qualification form.
4. Your Lenders: the data you enter into this application form is sent to the company’s network of lenders in real-time.  Those lenders decide whether you seem like a good candidate for an auto loan based on all kinds of factors, such as your zip code, income, credit, down payment, and other factors.  The decision-making matrix each lender or dealer depends on their needs at the time.  Banks usually look for consumers with better credit, buy-here pay-here lots for the opposite.
5. Your Loan Approval: if a lender accepts your application, then you will be contacted by them either by phone or email, maybe both.  At this point, you have a very good chance of getting the loan you need.  The terms of that loan, the interest rate, and the locations where the loan is good all depend on the agreement you make with the lender.

Most auto loan websites, ours included, are not lenders themselves.  If you choose to apply directly to a single lender, you don’t maximize your chances of approval.  And therein lies the great advantage of applying for an auto loan online:  approval maximization and credit acceptance.  You only have to complete one short application (takes about three minutes), and you will be granted access to innumerable lenders in real-time, thereby increasing your chances of approval (and decreasing the number of times your credit report has to be pulled).

Most auto loan websites just throw a lot of marketing copy at you.  They put up stock images of pretty women and handsome men in flashy yellow or red cars that only 1% of the population can afford.  Then they try to sell your data to credit repair companies, debt consolidation companies, and other ways of making more profit.  We don’t do this.  We sincerely try to get your auto loan approved.  If you opt-in to our email newsletters, we will send you various offers (not too often) for other services in which you might be interested.  Things like auto warranties, vehicle price comparisons, and credit reporting services.  But not without your approval, and you can unsubscribe at any time.

The economy has hurt the online auto loan industry as much as any sector of the market.  That said, at The Auto Loan Network we try to bring a level of transparency and customer satisfaction heretofore unknown in the industry.  You can choose to apply at one of the flashier sites in the search engine results, or you can apply through the most optimized lender network in the industry, who is not afraid to tell it like they see it.