This is a guest post by Mr Credit Card from www.askmrcreditcard.com. Today, he is going to write about how to make sure you have the best credit score possible before you take a loan for your next car purchase. If you want to apply for a credit card, he has got a best credit card deals and offers section which has some excellent recommendations.

If you are looking to buy a car and have to finance it, then the first thing that you should do is to make sure that you have the highest possible credit score available. You should begin the process about 6 months before you anticipate your car purchase. This is what specifically you should do.

1. Check your credit report - Every year, each individual is entitled to a copy of each of your credit report from the three major credit bureaus, Experian, Equifax and TransUnion. The place to get your free credit report is from the site www.annualcreditreport.com. The thing that you have to watch out for any errors (especially negative ones) on your report. It could be as innocent as an incorrect address. Or it could be a late payment that never actually happened. You should have them changed right away by writing to the credit bureaus.

One thing to be aware of is that there are many sites that offer you a “free credit report” (which you are entitled to anyway) and will bill you a monthly fee in return for “monitoring your credit reports”. Avoid these deals. The other thing to be aware of is that you can get your free credit report from www.annualcreditreport.com, but you will not be able to see your scores. To see your credit scores, you’ve got to buy them from the major credit bureaus. They is though one way to get a free score from TransUnion, and is to join this site called www.creditkarma.com. It is an ad supported site so you will just see more ads there. Then just buy the other two reports.

Improving your credit score - Once you know your credit scores and you have removed any incorrect but negative items from your credit report, the next step is to improve your credit score. To improve your credit score, you have to understand that certain things you do will impact your credit score.

Paying your bills on time - Paying your bills on time is very important. If you never had that problem, then make sure that you continue to pay your bills on time.

Debt Utilization Ratio - This is the ratio of how much debt you have versus how much credit lines are available to you. If you have $10,000 worth of credit lines and you are utilizing $9000, that would not look so good. But if you are only utilizing $3,000, then that is much better. As a rough guide, 30% is a reasonable debt utilization ratio.

Length of credit history - The length of your credit history is also very important. The longer your history of your credit card for example, the better it is than one you just got. So do not cancel your old credit cards.

Improving Your Debt Utilization Ratio - If your credit score needs improvement before you make that purchase, then one of the key things you have to focus on is to reduce your debt.

That could mean a few things. You might want to consider paying off more than your minimum credit card payment, or try to pay down some principal. Other things you may want to consider is asking your lender to reduce the interest rate on your loans. It could be on your credit card debt etc. If you are successful in that, you can use the savings you have to pay down debt. If you have credit card debt, one way to save on interest cost is to look for 0% balance transfer deals. There are lots of balance transfer credit cards with 0% APR offerings. That way, you can pay 0% interest for a certain period and use the savings to pay down principal.

What if you have no credit history? - What if you have no credit history? What if you are a new immigrant? Not to worry. A little bit of advance planning will help. The first thing you have to do is to build a credit history! One way to do it is to get a credit card. Though credit card issuers also look at one’s “history”, there are lots of credit cards for people with no credit history. If you are a student, most credit card issuers offer student credit cards with no annual fees even if you have no credit history.

What if I have just got out of bankruptcy? - Believe it or not, you could still get an auto loan after you have just emerged from a chapter 7 or 13. Certain dealers and brands will do that. You just have to ask and do your legwork and research. However, if you are not in a hurry, you can always rebuild your credit. One of the easiest ways to rebuild your credit is actually (yes, you’ve guessed it) to get a credit card. But most issuers will stay far away from you. What you want to get is a secured credit card.

Now up to this point, I’ve only mentioned getting credit cards to build a credit history. There are other means of doing this - like taking a personal loan. However, based on other people’s experiences, it is easier to get a line of credit with a credit card than a personal loan.

Conclusion - Buying a car is a major financial decision. If you intend to finance the car, then making sure your credit report and credit score is in tip top condition is crucial to getting the best rate for car loan. You should start working on your credit report about six month in advance of your purchase. In fact, try to do that a year in advance. That way, you will have time to improve your score if it is necessary.

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The 63rd annual IAA auto show begins on September 17 in Frankfurt, Germany. The 17th and 18th are trade days and then the show opens to the public from September 19 through September 27, 2009. Among the vehicles scheduled to be on display at the event is the new Mercedes-Benz Vision S500 Plug-in Hybrid.

“The Vision S 500 Plug-in HYBRID can drive for up to 30 kilometres solely on electricity and therefore without producing any local emissions. The efficient drive system combined with the CO2 bonus for the battery-electric driving mode enables the vehicle to achieve a certified consumption of only 3.2 litres of petrol per 100 kilometers.” Source: Daimler

This is approximately 73 miles per gallon. This is quite a bit more than the 50-mpg third generation Toyota Prius but far less than the estimated 100+ mpg rating that the Chevrolet Volt may be awarded.

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Filed Under: Auto Shows, Mercedes

Tonight’s episode of “Dan Rather Reports”, which will appear on HDNet at 8:00 pm Eastern, will focus on electric cars. Rather will get behind the wheels of the 2010 Tesla Roadster Sport. After watching Rather zoom around in the $125,000 electric supercar, Rather will host a round table discussion about the future of electric cars.

“Tesla, has just received a 465 million dollar loan from the U.S. Government and plans to use the money to build a larger, seven-person Tesla “S” sedan, which will have a 300 mile range, go from 0-60 in 5.6 seconds and will retail at around $50,000.” Source: PR Newswire

The round table discussion will feature environmental writer Jim Motavalli and Slate contributor Matt DeBord. I’ve got my DVR set to record the show as I’m looking forward to the round table discussion.

I know that I’m excited about the possibility that electric cars will experience a boom in the coming decade, but I’m curious what your thoughts are. Do you think electric cars will be a scene changer here in the US?

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Filed Under: Tesla, electric cars

Yesterday, I discussed the smart fortwo. The little two-seater was named the Cars.com Worst Car of the Decade. In the same press release, Cars.com named the most improved vehicles of the 2000s and the Toyota Prius came in at the number three spot.

“The 2004-09 Toyota Prius is a marvel — not simply because it’s so efficient, affordable and reliable, nor because it has single handedly brought about global acceptance of new and scary technology. No, it’s a marvel because even when it yielded its position to the next-generation 2010 Prius, it still reigned as the most efficient and affordable hybrid on the market. The original Prius that was sold in the U.S. — from 2001 to 2003 — was a technological triumph for its time, but it was nothing like the phenomenon that soon took its place.” Source: PR Newswire

The 2010 third-generation Prius is turning out to be quite a popular model for Toyota. The 50-mpg Prius launch is being accompanied by an ingenious advertising campaign, which includes live roadside flower displays.

Just a year ago, Prius’ domination on the market was being questioned as news about the 2010 Honda Insight was making headlines. The vehicle was dubbed the “Prius-killer” but unfortunately for Honda, its appearance on the market made just a small splash. The Prius continues to dominate the hybrid sales market and will likely do so for some time to come.

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Cars.com has released its list of the ten worst cars of the 2000s as well as the ten most-improved vehicles of the decade. The super tiny smart fortwo tops the worst cars of the decade list.

“We don’t have a problem with small cars in general (we’re big fans of the Mini Cooper), just with ones that don’t deliver on the benefits of going small. The pint-sized ForTwo sacrifices a lot of passenger space for a relatively unimpressive 41 mpg on the highway, has an SUV-like propensity to roll over, and is equipped with an aggravating sequential manual transmission. Sure, the ForTwo looks cute, but after you drive it you won’t be smiling anymore.” Source: PR Newswire

Okay, I admit the car is cute. I’ve never ridden in it as I have claustrophobic tendencies and I live in an area with a high proportion of full-sized SUVs. I’d hate to encounter one of these SUVs in a collision and so I’ve never bothered to look twice at purchasing a fortwo.

According to the safercar.gov website, the 2010 Smart Fortwo 2-Dr w/SAB scored four stars in the frontal driver rating, three stars in the frontal passenger rating, and three stars in the rollover rating. The vehicle also scored five stars in the side driver rating section but a safety concern is noted.

On paper, the vehicle doesn’t look like it is the epitome of an unsafe vehicle but the rollover rating is a little low for a passenger vehicle. Perhaps a higher fuel efficiency rating would help the smart fortwo avoid this list as the next decade comes to an end.

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In looking at the August 2009 auto sales figures, you can see that many automakers posted an increase in sales. This is in sharp contrast to the year and half of double digit declines. It is likely that the Cash for Clunkers program is responsible for a good portion of the growth but we won’t know for sure until September closes.

In addition to several automakers posting overall auto sales increases in August 2009, many hybrid models also did well during the month.

In July 2009, Toyota sold more than 19,000 Priuses. The best-selling hybrid didn’t quite meet that mark in August 2009, but the 18,886 sold represents a 45.7% increase when compared to August 2008. However, the year-to-date Prius sales are still down by nearly 21% when compared to the first eight months of 2008.

Overall, Toyota sold more than 24,000 hybrid vehicles in August 2009, up 28.6% from August 2008. In addition to the Prius, Toyota also has the Toyota Camry Hybrid, Toyota Highlander Hybrid, and Lexus RX Hybrid.

American Honda sold 4,226 Honda Insights and 717 Civic Hybrids in August 2009. The Honda Insight was not available in August 2008 but the 4,226 units sold in August 2009 is up from the 2,295 sold in July 2009. Sales of the Honda Civic Hybrid were down from the 969 sold in July 2009.

Ford Motor Company doesn’t publish separate figures for the hybrid models in the lineup but overall, Ford’s hybrid sales were up 251% when compared to August 2009. There were a total of 4,695 Ford hybrids sold in August.

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It is September 1 and automakers have begun releasing their August 2009 auto sales figures throughout the day. While growth was expected from Ford, Honda, Hyundai, Mazda, Subaru, Toyota, and Volkswagen all posted year-over-year increases. The Cash for Clunkers program has ended but the effects of the program are evident in today’s auto sales figures.

Domestic Automakers

Ford was the only one of the Detroit 3 to post an increase in sales. Ford’s year-over-year August sales were up by 17.2%. The fuel-efficient Ford Focus was one of the best selling Cash for Clunkers vehicles and several model years of the Ford Explorer were one of the most traded in vehicles. It looks like Ford’s customer loyalty paid off and helped put the company in the black for a second month in a row.

Despite the success of the Cash for Clunkers program, both General Motors and Chrysler posted sales declines. Chrysler sales were down by 15.4%. This is an increase from the 9.4% decline seen in July 2009. General Motors August 2009 sales were down by 20.1%, again an increase from July 2009 (-19.4% sales growth).

Imports

The Cash for Clunkers program was good for American Honda and Toyota. American Honda, with a bevy of fuel-efficient vehicles to choose from, posted a 9.9% increase in sales in August 2009. Toyota’s sales were up 6.4%.

Other non-domestic automakers that posted increases in August 2009 include:

• Hyundai – 52.1%
• Mazda – 12.1%
• Subaru – 51.5%
• Volkswagen – 14.2%

While hybrid vehicles weren’t a requirement during the Cash for Clunkers program, it will be interesting to see how the government-run auto stimulus plan helped hybrid sales. Check back tomorrow for the August 2009 hybrid auto sales figures.

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