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What Happens to the Extended Warranty When You Trade-In?

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Extended warranties aren’t the same as an original factory warranty. Warranties typically follow the vehicle, not the driver, however, this may not be the case with a service contract.

Difference Between a Warranty and an Extended Warranty

An extended warranty typically doesn’t follow the vehicle the way a factory warranty does, nor does it stick with you after you make a trade.

An extended warranty is different from an original warranty and is generally found on used vehicles. They’re a separate purchase that you can make at a dealership, through a third party, or from your insurance provider. Extended warranties are also known as service contracts, and you need to read the fine print carefully before you sign on the dotted line.

A factory warranty is an agreement that the manufacturer is going to cover the costs of certain repairs. The specifics vary. However, original manufacturer warranties typically come as either bumper-to-bumper coverage or powertrain coverage and follow the vehicle for a certain number of miles or amount of time.

Why Opt for an Extended Warranty?

When you’re purchasing a used car with an extended warranty, it can give you peace of mind and could save you money in the long run.

Knowing that you may not have to pay out of pocket for things that go mechanically wrong with your vehicle can be worth the extra cost – paid as a separate monthly premium, or rolled into your auto loan contract.

All extended warranties have contract specifics, some allow for you to get unexpected repairs done at a number of locations, while others may require you to use a certain group of repair shops, or return to the dealership service center for repairs.

Some third-party service contracts may even require you to pay for the repairs yourself, and send you a reimbursement later. Other warranties cover things to a certain extent after you pay a deductible for the rest.

Do You Need an Extended Warranty?

If you’re considering financing a used car, or have recently purchased one, you may be wondering if an extended warranty is worth it for your vehicle. Before you jump into the fray and purchase a service contract, be sure to ask yourself the following questions:

  • Is my car still covered under an original manufacturer warranty? Some vehicles come with warranty coverage built-in. This can either be leftover from the original warranty or perhaps coverage that’s included with a certified pre-owned vehicle. If coverage exists on your car, you may not need an extended warranty. That being said, you need to compare your warranty timeline to your timeline for keeping the car.
  • What’s the specific coverage timeline? Some warranties have coverage that begins when you take ownership of the vehicle, while others state they begin on the date the car was originally sold. For example, if you’re getting a 4-year-old vehicle with 90,000 miles on it, and are offered a service contract for seven years or 100,000 miles from the original date of sale, you only have coverage for four years or 10,000 miles, whichever comes first.
  • What’s covered under this warranty? Not only do you need to ask yourself if the peace of mind is worth it, but you also need to know if a likely breakdown is going to be covered. Be aware of issues other drivers have had with the type of vehicle you’re purchasing, and see if they’re covered under a powertrain warranty or bumper-to-bumper coverage.
  • Do I need to pay for repairs out of pocket? It’s important to check the details of your warranty coverage before you accept it, and that means knowing whether or not you’re expected to pay for repairs upfront and wait for the service contract provider to reimburse you. In many cases, reimbursement can take longer to get to you than expected, so in this case, you still need to have a rainy-day vehicle repair fund on hand.What Happens to an Extended Warranty When You Trade-In a Car?
  • Can I cancel the coverage? Not all warranties can be canceled if you’re no longer using the service, but if you can cancel yours, you’re likely to see a prorated refund for amounts you’ve paid. If your extended warranty is rolled into your car loan, you should see a slight decrease in the overall total of your loan amount, though your monthly payment is likely to remain the same.
  • Will I keep up the regular maintenance on my vehicle? You might end up eating the cost of repairs anyhow if you’re not keeping up with the terms of your extended warranty. In some cases, the contract outlines that you must keep up with regularly scheduled maintenance intervals to ensure proper vehicle operation. If you don’t, you run the risk of the warranty becoming void, which means repairs that were deemed preventable may not be covered at all. Keep in mind that service contracts don’t cover things that wear out over time, such as brakes and tires, and don’t cover regular services like oil changes.
  • Do I need this now, or can it wait? You don’t have to make the decision to purchase an extended warranty the day you get your car. Since the service contract isn’t something required for financing, you can weigh your options and choose the warranty that’s right for you, whether you go back to the dealership and ask for one, or find one yourself elsewhere. Just know that warranties vary depending on who you’re contracting through, the make, model, age, mileage, and condition of your car.

Ready to Trade-In Your Vehicle?

Now that you know an extended warranty isn’t something you have to fret over when trading in your vehicle, you can settle into the knowledge that peace of mind can be purchased for a new-to-you-car at any time, in most cases.

If you’re struggling with bad credit and need to find a vehicle that meets your needs, we want to help. At Auto Credit Express, we have built a coast-to-coast network of special finance dealerships that are signed up with subprime lenders that work with borrowers in many situations, including bad credit, no credit, and even bankruptcy. Don’t wait any longer to find the dealer you’re searching for, simply fill out our auto loan request form, it’s fast and free!

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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