Posts from the ‘Automoblie Industry’ Category

Synopsis of Auto industry

It was way back in 1769 when a steam-powered automobile was created for transport purposes. The next important year was 1806, when cars were running on fuel gas and was powered by internal combustion engines. Later electric cars came into the industry during the 20th century; however it became popular only in 21st century when consumers and government were more concerned about low-emission vehicles.

Phases in automobile industry:

  • Steam automobiles…………………….Cugnot Steam Trolley
  • Electric automobiles…………………..The Henney Kilowatt
  • Internal combustion engines…….Benz Patent Motorwagen
  • Veteran era……………………………………Renault Voiturette
  • Brass/ Edwardian era…………………Ford Model T, Mercer Raceabout, Bugatti Type 13
  • Vintage era…………………………………..Austin 7, Bugatti Type 35, Lancia Lambda, Cadillac V-16
  • Pre-World War era………………………Alvis Speed 20, Ford V-8, Bugatti Type 57, Volkswagen Beetle
  • Post-War era……………………………… Morris Minor, Jaguar E-type, Ford Mustang, Datsun 240Z
  • Modern era……………………………………Toyota Corolla, Range Rover, Mercedes-Benz S-Class, BMW 3 Series, Ford Taurus

The largest automakers in U.S are General Motors Corp., Ford Motor Co. and Chrysler. U.S ranks third after Japan and China under the list of world’s top 20 motor vehicle producing countries.

The future of cars is overloaded with high end technologies which are eco-friendly and cost effective for customers. The auto manufacturers are spending a lot of money in R & D (Research and Development) to create a product that is safer, sustainable, energy efficient and less polluting. Alternatives to fuels like hydrogen cars, electric cars, compressed-air cars, etc are entering the market to give high mileage at low cost which is beneficial for owner of the car and environment too.

Latest technologies like BMW’s Turbosteamer, Regenerative braking, Installation of Vortex is used which helps in saving energy and thereby cost. To improve the quality and strength of automobiles, the auto manufacturers are replacing steel with materials like fiber glass, carbon nanotubes, duralumin and carbon fiber. Few other technologies like platoons, automated highway systems and vehicle infrastructure integration enhances road safety and traffic flow.

Automobile industry was deeply affected by recession which recently occurred. However, it is reviving and it will soon come back to normal in the near future.

Take a look at this PPT : Synopsis of Auto industry

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Auto makers show signs of revival

U.S automobile industry has faced several bankruptcies in the past one year that led to significant losses. While General Motors (GM) paid off all their debts (around $4.7 billion) recently, Chrysler Group also showed an operating profit of $143 million in the first-quarter itself. Addition to this Ford Motor Co. closed with the highest point since January 2005.

The three market players are showing positive signs of industry improvement which makes automobile industry out of recession phase. End of 2008 was a time when these market giants had cut down their production, laid-off employees and held themselves back from paying incentives. They were also trying to make product-line improvements.

Currently, auto makers are focusing on high quality hybrid and electric cars which are safer, sustainable, fuel efficient, etc.  This was not as simple as it sounds. GM had received aid of $50 billion from U.S government and Chrysler received $12.5 billion and a 20 percent share of Fiat SpA which made it simpler for them to come out of bankruptcy.

With sales rising, bankers and lenders are now ready to increase the flow of money in market by granting loans to facilitate people who desire to own a vehicle. However, one must always be aware of what credit score is and what the individual’s score is. It is highly essential when we apply for loan as this is the only medium which gives a vague idea to the bankers about the borrower’s credibility.

Now when market is reviving back, we must search for a source of income which is sufficient enough to fulfill all our needs and also enough to pay all our bills. If one payment is missed, it can put a mark on your credit score card which later will cause barriers in availing loans. Hence, start planning your personal finance as soon as possible and if you don’t then be prepared to face any difficulties that may come your way to a comfortable life.

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Filing Bankruptcy OR Loan Modification

Repossession affects credit score, build up additional banking fees, and will only add to financial turmoil in your life. Do Not Blame The Economy For Repossession!!!! You are in a this situation for a reason because, YOU FAILED TO COME UP WITH NECESSARY FINANCES

…….Then how to avoid repossession?  Which is the best option that I have?

Its My CAR
  • Filing for Bankruptcy
  • Loan Modification / Loan renegotiation

Filing For Bankruptcy
Your last and final option to avoid repossession is filing bankruptcy which is the worst options that you have. We recommended that you avoid this at any cost.  You would end up in a better situation by selling your vehicles to pay off your repossession bills than you would by filing for bankruptcy.
……….Bankruptcy is not “finance-ending,” but it certainly will wreck your credit for awhile.

Loan Modification / Loan renegotiation
Its never recommended that you avoid your creditor. Keep in touch With your creditor (who gives you a monetary loan). Keep in close touch and talk about your situation.
If not contact Loan modifier or a renegotiator, who works directly with lenders to modify loans, extend terms or reduce payments.

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What’s CARD Act?

“The Credit Card Accountability Responsibility and Disclosure Act of 2009 or Credit CARD Act of 2009 is a federal law passed by the United States Congress and signed by President Barack Obama on May 22, 2009”.                         Source:  Wikipedia

The CARD Act is approved to protect card holders from the unfair practices, sudden hikes in interest rates and changes in terms and conditions usually done by credit card companies. Following is the extract summary of the bill:

  • Credit card holders must be given protection against sudden hike in interest rates. A minimum 45 days notice must be provided to all card holders for any changes in interest rate so that they don’t feel cheated.
  • Regular payers must not be penalized by credit card companies. If a customer is regularly paying all his/ her bills on time for six months continuously, they must be charged their previous interest rate and not the hiked rate.
  • Credit card holders must be informed 21 days before the due date of their bill payments to avoid penalties.
  • Credit card companies usually mention some confusing terms such as ‘fixed rate’ and ‘prime rate’ as it is misleading for credit card holders. It is important that they set proper definitions of those terms.
  • The CARD act also gives the right to card holders to set a credit limit for their card. This will avoid over-spending and thus credit card companies will not be able to charge for non-payment.
  • Fair allotment of payments must be done by the credit card companies. The debts which have a higher interest rate must be cleared off first and then other bills.
  • The act also limits the amount of ‘over-the-limit’ fees that are usually highly charged by credit card companies to gain profit.
  • Vulnerable consumers will be protected from fee-heavy subprime credit cards.
  • Under this act, congress must collect the data on industry profits of credit card industry and present every year.
  • The credit card holders will have the right to get an explanation of the minimum amount he/she has to pay against the debts and interest charges.
  • A credit card cannot be issued to teenagers i.e. below 21 years or if issued they must present a co-signer who can give a guarantee to repay the debts.
  • Banks must provide a reason for participating on college campuses and at university-themed events.

Under the CARD act people will get a chance to improve/ raise their credit score. The rules under this act automatically helps card holders to pay timely as they will be more aware of their limits, interest rates, etc and they can avoid paying penalties resulting in improvement in credit score. A high credit score in itself has many benefits for availing loans. Thus, you can get a loan at a lower interest rate as you would have paid off all your debts on time.

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Credit flow has increased

In a latest news’, the Fed informed that consumer borrowing has unexpectedly increased.  Most of it was student and auto loans. Non-revolving debt, which includes automobile, mobile-home and boat loans — and excludes credit cards — rose by $6.6 billion after a $4.9 billion gain in December.

The credit flow has increased due to government funded recovery last year in the auto loan securitization market. This allowed lenders to increase their cash flow by selling their loans to investors. Credit availability was a major issue in a car business as it didn’t allow customers to purchase new/ used cars from auto makers and sellers. But now it seems that the retail credit is improving which is attracting investors in this market.

It’s high time for people to fulfill their dreams of owning a vehicle. With lack of income and loss of job, Americans had their purchase plans on hold. However, an individual’s credit score is a significant factor to avail an auto loan with a low interest rate.

Commonly people agree to pay higher interest rates but find it very challenging to repay it back. They delay or miss out on monthly payments which ultimately results in repossession of the vehicle. People who are under such situations must immediately contact a loan modification service provider. Their expertise in the modification industry can help the clients lower their payments for up to 50% by term extension.

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Auto-makers focus on Quality

With countless controversies and recall crisis, Toyota finally decides to take effective steps for improvement in quality of the automobiles. Toyota is a giant in the auto market and has incurred losses due to frequent accidents of its cars reason being poor quality.

Scientists of NASA space and aeronautics will be helping Toyota analyze its electronic throttles to check if they are behind unintended acceleration.

It is important that people who are planning to purchase a vehicle feel secured. Quality is one of the most important factors why people pay higher prices. Toyota, world’s largest automobile maker has to recall around 8.5 million vehicles globally in the past few months. After this incident they have realized that apart from monetary losses, their brand reputation and customer confidence is seriously hampered.

The actions that Toyota is taking on quality focus are of high priority. Regaining their lost customer and prospect’s confidence must be their only motto now. This reminds of some of our clients who came to us saying that they need auto loan modification as they spent a lot of money to check the quality of their vehicles.

They wanted to pay lower monthly payments to save some dollars every month. Thus, we successfully completed their loan modifications by negotiating and renegotiating with the banks and other financial institutions and finally helped our clients pay less.

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Automobile Industry is back on track

In a recent news, J.D. Power’s executive director of forecasting, Jeff Schuster announced that the U.S auto sales increased significantly during the first half of the month of March. It is predicted that the sales will remain strong for the rest of the month too. This positive change is due to Toyota’s Motor incentives which will help enhance auto sales by 23 %. U.S. sales of cars and light trucks will reach 1.09 million in March.

It is a great news that automobile industry in back on the road of recovery. The badly hit industry had led many auto makers, dealers and customers suffer bad debts, repossessions and monetary losses. As truly said, every cloud has a silver lining, the U.S. auto industry finally is earning some positive figures in their pockets.

An auto loan comes along with high interest rates and EMIs which is a headache for the borrower. U.S culture encourages people to take loans for purchasing expensive cars, flats and other luxuries. But when time comes to pay them off, Americans find it too difficult to bear the pressure. As you know time, money and job is as uncertain as death. If you fail to pay off your debts and installments timely, then you may suffer from car repossession or home foreclosure.

We need to understand before hand that repossessions and foreclosures can be a black mark in our credit score cards and can lead to many problems for our future loan plans. It’s better to start your loan modification procedure at an early date which will help you reduce your car payments and extend terms of contract by negotiating and renegotiating with your respective banks and lenders.

As negotiation is a skill not possessed by everyone, you need a loan modification service provider that gives a professional approach towards your payment problems and find the best solution for you and the loan provider. The service providers explain their client’s situation and provide convincible reasons for the non-payment of dues to banks and various financial institutions. Banks usually consider their proposal and agree to extend the term of contract. This helps to lower your monthly payments which is a blessing in disguise during your bad times.

Hence, we must start planning for our future now and modify our loans in a manner that best suits our situation.

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