The Importance of Making On-Time Payments

Life can be tough enough without complications due to being late on car payments.

Some dealers and related finance companies use payment devices to keep you from starting your vehicle if you are late on your payments. You don’t need that trouble.

Other dealers will jump at the opportunity to repossess your vehicle if you are late. You don’t want that worry.

Late payments can lead to late payment charges and they will increase your interest expense, raising your overall cost of buying the car. When money is already tight you don’t need to be making it worse.

And there are many, many economic disadvantages of having bad credit, ranging from higher interest cost, higher insurance cost, limited dealers that will sell to you, and possibly making it harder to find a job.

All of these problems can stem from bad credit resulting from late car payments and repossessions.

What are the advantages of paying on time? There are many:

Improve Your Credit

If you have bad credit, it should help you improve your credit, especially if you buy from Integrity Auto Finance whose affiliated finance company reports to all three major credit bureaus.

Reduce Your Interest Cost

When you are late interest continues to accrue on the principal that should have been paid.  This has a compounding effect, causing future payments to go more to interest and less to principal so it takes longer to pay the note off.

Avoid Late Payment Fees

When you pay late you can be subject to late payment fees.  These can be expensive.  For example, if you are late on a $200 payment and there is a $20 late payment fee, it looks like just a 10% fee ($20 is 10% of $200).  But the effective cost of the payment can be much higher.  For example, if you finally pay the late payment fee after 15 days the cost is 240% [($20 / $200) time 365 days / 15 days].

Earn Goodwill with the Finance Company

There may come a time when you have a hardship and really need to reduce or defer a payment.  When that happens some finance companies will just say tough luck, you owe us the money, make the payment.  Integrity Auto Finance’s affiliate Dealers Finance Co. is different.  They will look at your payment history and evaluate whether you are serious about making your payments.  In most cases it is an easy decision to help when a customer has, up to the time, consistently made payments on time.  On the other hand, if the customer has consistently paid late and been difficult to contact, chances are the finance company will be less lenient.

Earn AutoPay Rewards

Integrity Auto Finance’s affiliate Dealers Finance Co. has a program to encourage customers to enroll to have payments made automatically each time, taking the worry out for the customer.  While enrolled the customer is eligible to reduce their interest rate by one point for each year they remain enrolled, down to a stated minimum.  The customer also earns payment credits that can be used to pay for maintenance, service, and / or used as a down payment on a trade-in.  AutoPay Rewards are the opposite of late fees.  AutoPay Rewards reduce your cost.

Buying a car you can afford and setting up payments that you can make automatically will help you avoid the worries that come with getting behind and paying late, and in the worst case, getting repossessed.  It doesn’t need to be hard.  You just need to be careful, check out who you are doing business with and discipline yourself to remain true to your budget and your goal to establish better credit and have fewer worries in life.