Best Financing for Used Cars
In recent years, more people are buying used cars than ever before. A recent article in The Washington Post states that over 40 million used cars are sold every single year in the United States alone. If you’re thinking of buying a used car, you’re making a smart decision. You’ll be able to save some serious cash without compromising on quality. Plus, your life will be much easier when you can drive on your own schedule, as opposed to relying on public transit. Still, used cars aren’t always cheap. Many still find it difficult to afford a used car. Need help figuring out how to pay for your own? Read on to learn about the best financing for used cars.
Apply for an Auto Loan
Of course, one of the most popular options when it comes to the best financing for used cars is to apply for an auto loan.
To avoid making a mistake, make sure you do your research.
For example, ensure you’ve calculated the total cost of the loan — starting with the APR financing rate. The lower the loan’s APR percentage, the better off you’ll be.
Additionally, be sure to look at the repayment terms of the loan and decide which option is better for you. Would you rather have higher monthly payments, but a shorter loan term? Or, would you be able to better handle a longer repayment period with lower bills each month?
In general, the shorter the repayment term of the loan, the better off you’ll be.
Finally, consider how much of a down payment you’ll be able to make when you purchase the car. A good rule of thumb is to pay at least 15% of the car’s total value at purchase to avoid getting in over your head at the start of the loan.
Where Should You Apply for an Auto Loan?
Of course, to get the best financing for used cars, you need to know where to look.
Finding the right institution and lender can make all the difference in your car loan. Now is not the time to avoid doing your research.
The good news?
There are tons of different lending options available.
Let’s take a quick look at some of the most popular.
Many people choose to begin their search for the best financing for used cars at the bank.
Keep in mind though, that most banks will only agree to give car loans to those who have a good credit score. However, if you have a stable credit score, you’re in luck.
Often, the banks offer some of the best rates out there.
While many list the current rate options on their website, the best thing you can do for yourself is to go into a branch and speak directly with a representative. That way, you can be certain you have all the information you need.
Video – New Versus Used Car Purchase Tips
Online Lending Companies
If you’ve already started your used car financing research, you’ve probably realized just how many online lending companies are out there.
This means that you can shop around until you find the best rate, and may even be able to use your research to help you get a lower rate from the lending company you’d prefer to work with.
Some lending websites will connect you with several potential lenders, meaning you’ll already have some options to compare and contrast. Others will simply let you apply for a loan directly online through their website.
One thing to make sure to ask about is an online loan’s initial fees. Make sure you’re aware of any potential prepayment penalties, as well.
You need to make sure it’s not going anywhere it shouldn’t.
Credit unions usually operate at lower costs than banks, as they are often nonprofit organizations.
This means that, while you may get a better rate than at the bank, you often need to be a member of the credit union to get the deal.
However, there are a few credit unions that make their offers available to the public. So, if you’re interested in this financing option, you’ll need to do a little research first.
The Car Dealership Itself
This might be your most convenient option, but it’s not always the best bet. Often, used car dealerships will mark up their rates so that they can benefit from the terms of your loan as well as the bank.
This should be a last resort — and only an option to pursue if you’re ready to do some serious negotiating.
What Else Should You Know?
Of course, a loan isn’t the only option you have when it comes to buying a used car.
Thanks to this post, you know some of the most popular options when it comes to finding the best financing for used cars.
Especially if you can afford to make an investment, it’s always nice to be able to avoid taking on debt if possible.
Keep in mind that whenever you apply for credit, your overall credit score will temporarily drop.
If you have the cash in hand, it’s better to buy the car upfront. If you’re concerned about how you’ll manage after such a large purchase, consider using the car to make some extra income!
Sign up to become a driver with agencies like Uber or Lyft to help you earn some extra cash on the side.
You’re Now an Expert in the Best Financing for Used Cars
Now, you’ll be able to easily get around — without taking on major debt.
Of course, it’s likely that how to find the best financing for used cars isn’t the only question you have when it comes to managing your money. If you need additional financial advice, and want to ensure you’re planning for your future properly, you can rely on us for help.
Check out our blog to learn more about how to save your money, and how to stretch every dollar to its limit. Before you make your next big financial move, make sure you’ve checked out our site first.
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