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To put it simply, used cars can be one of the best transportation investments you can make. Any problems with the car will likely have been revealed through usage; you’ll have a history of repairs to indicate trouble spots and you won’t be paying the large amount required to drive off the lot in a new car. Used car loans are also a great opportunity to repair credit that’s less than top-notch. Given the much lower price of buying used versus new and the ready availability of financing, buying a used car makes good sense.
For used car loans, start your search on the Internet. Especially if you have bad credit, the Internet is literally brimming with financers who are willing to give people a second chance. Remember that your interest rates will be higher if you have poor credit, but given the low principal required to finance a used car, this might not even be an issue. You may well end up paying less per month than you would for a low-interest loan on a new vehicle.
There are a number of dealerships who specialize in selling used vehicles. Oftentimes, these dealers have access to many different lenders who provide used car loans to their customers. If you’re interested in financing through the dealer, go ahead and ask before you start browsing the lot. Remember, a dealer is very motivated to get you the funding and you can use this to your advantage. Just a tip, browse the lot during the end of the month when sales quotas are up. The sales people will be even more motivated to cut you a good deal.
Your local bank may well offer some of the best terms on used car loans but you may find these hard to get if your credit is anything less than spectacular. Banks are typically the tightest with funding and they may require down payments, large monthly payments and other inconveniences that can make them among the least attractive lenders for used auto financing.
If you’re just driving—or bussing—around town looking at car lots, stick to those that specialize in used cars at first. They’ll likely have the most access to used car loans from several different vendors and won’t waste your time trying to convince you to buy new if that’s not what you’re interested in doing.
With the sales of new cars in a rut lately, used car loans are more widely available than ever before and the terms keep getting better, as well. Instead of buying low to accommodate a small budget, consider financing your used car as a means to establish good credit!