Your rates of bank

A good price on a car or truck is no deal at all if you don’t like the vehicle.

Each year, I drive between 50 and 70 new vehicles. These come from the manufacturers’ press fleets and I drive many of them for a week in the sort of everyday situations that most drivers experience.

I rate them not only for fuel economy and performance, but for their overall value and the driving satisfaction they deliver.

So, with the 2008 model year officially coming to a close — and with manufacturers and dealers slashing prices — here are some of my picks for vehicles you should consider purchasing. My picks include sedans, crossover SUVs, full-size SUVs and even a sports car.

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Dear Terry,
My FICO score is 500 and I was supposed to take over my girlfriend’s car, a 2005 BMW 645 that she agreed to buy for me on the assumption that I would get financing in three months. We owe $57,000. I can’t get financing, but I make $130,000 a year. What can I do?
– Robert

Dear Robert,
I won’t ask how someone who makes $130,000 a year has such a low FICO score. But to address your main question, there are subprime lenders who may be willing to make you a loan. Expect the interest rate to be as high as 21 percent, which could mean payments well above $1,000 a month. (more…)

What a strange summer.

Gasoline prices skyrocket above $4 a gallon and car buyers scramble to switch to smaller, more fuel-efficient cars — or stop buying new vehicles altogether.

Meanwhile, Detroit manufacturers pull back or stop offering leases because of huge losses on SUVs and pickups.

Then, gasoline prices slowly start to fall back below $4 a gallon.

So what does the future hold for consumers?

Some clues started to surface this week.

Chrysler — the manufacturer that gave its dealers a week’s notice before pulling all leases starting Aug. 1 — has started doing what it can to make its vehicles more affordable by cutting sticker prices, by as much as 40 percent on its Dodge Ram 1500 pickup.

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Dear Terry,
I co-signed a car note for my son and he is five months behind on the car. Do you have any suggestions for him to bring the car note current? Neither he nor I have all the money to bring it current. He could do weekly payments, possibly.
— Mary

Dear Mary,
If your son is five months behind, I’m surprised he still has the car. (more…)

Although the price of gasoline is heading downward to levels that are merely outrageous rather than insane, consumers are still rightly concerned about various issues.

Here are two questions raised by readers that cover important issues worth explaining in greater depth:

Does driving on ‘empty’ hurt the engine?

Dear Terry,
With gas as expensive as it is, I’ve been driving my car until the gas light comes on. But this goes against everything my dad taught me. (more…)

Dear Terry,
I am leasing an ‘08 Honda. I needed it when I leased it, and the finances weren’t tight like they have become now. How can I lower the payments from $500 a month to maybe $400 or $425?
— Pedro

Dear Pedro,
Your only option would be to buy out the lease and then finance the car with a conventional loan with a longer term that would result in lower payments.

But that’s not going to be easy.

First, you’ll pay a penalty in interest and other costs for early termination of the lease, which means you would probably have to pay more than the car is worth now.

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Dear Terry,
We are thinking of buying a new car. Would it build my credit if I apply for a car loan separately instead of doing a joint loan?
My husband has a 20- to 30-point higher credit score, so he is getting a better interest rate. But I would still like to apply for a loan in my name as I am thinking that would help build my credit history.

Am I right in assuming that? Or am I wasting a few dollars every month just thinking I am doing the right thing by not taking the car in my husband’s name?

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You’re driving down the street with the gas gauge pointing to empty. Scanning the prices on the boards at the gas stations, you notice that the national brands are all around $3.25 a gallon for regular.

Then, you approach Joe’s Gas ‘n’ Go. To your delight, good ol’ Joe is selling regular for $3.15.

You think about stopping at Joe’s, but wonder: “How good is the gas? Will using Joe’s bargain gas harm the performance or reliability of my car?”

The short answer is “no.”

At a time when motorists are trying to shave even a few dollars off their fuel bill, shopping some of the lesser-known brands may be a good idea.

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Dear Dr. Don,
We have an auto loan with CitiFinancial at 16.99 percent. The loan is in both my husband’s and my name. I called CitiFinancial to see if there is something that can be done about this.
I was told that I have a simple interest loan and it has to stay like this until the end of the loan, unless I pay it off early.

We pay nearly $1,600 in interest every year and I just think this is ridiculous. Is there anywhere else I can get this auto loan refinanced at a better rate?

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Dear Terry,
I’m currently paying 16.9 percent on a loan for a used ‘07 car, but I’m sinking fast in payments. I bought the car in October 2007 and am financing for roughly seven years.

I’m not too keen on keeping the car, so if I can sell it, that would be my best option. But at this point, I’m almost prepared to voluntarily repossess it. I’m still young and don’t have many accounts open, but I don’t know what to do or who to turn to.
– Tara

Dear Tara,
You don’t say what your credit is like or whether you’re current on the car loan. If you’re current, you should try to refinance your loan. For a 2007 model car, you should be able to get a loan for about half what you’re being charged now. (more…)

For all the bad news that seems to come out daily about the automobile industry, it’s a boom time for some manufacturers and their dealers.

Honda dealers are reveling in the stampede of buyers looking for fuel-efficient cars. Sales of the subcompact Fit sedan are up 53 percent over a year ago, and the Civic was the best-selling car in the United States in May.

Toyota is doing equally well with its Corolla and, of course, its Prius.

Some dealers are reporting that they have almost no backlog of fuel-efficient cars and that it’s not unusual for cars to be snapped up on the same day they’re unloaded from the transporter.

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Dear Terry,
I have a 2007 Dodge Charger R/T. We are way upside down on the car and have a high payment. I want to know what options, if any, are available to get a cheaper payment.
The Blue Book value if it is in great condition is $23,000 and — get ready for this one — we owe $41,000 because we were also upside down on the previous two vehicles we purchased. All that has been added to this one and I would like to refinance it and try to get a cheaper payment. Is that even possible?
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