Explore Financing Choices For Purchasing A Used Car

March 28, 2014 by  
Filed under Business

Used cars are cheaper than new cars and are preferred by many. They can be a smart choice for consumers who have poor credit ratings. When you shop for a car you must select a vehicle which meets your budget and requirements. When you consider financing options for a used car you can pay the full price of the car. But for most buyers this is not a popular choice. You can avail used car financing, which is provided both by dealerships and private lenders. Before you apply for financing, you must check your credit report. Lenders will conduct a credit check to find whether you are eligible for the loan.

Contacting a lender

With a high credit score, you have a greater bargaining power. If your credit score is above 680, you can bargain on the interest rates offered on used car loans. You will have to contact credit unions and banks to find out the interest rates which they are lending on used cars loans. You can obtain a loan for 5 years if the used car is lesser than 5 years old. Before you finalize on a loan, you must compare the interest rates which are offered by different lenders. You must ask the lender for a pre-qualification letter.

Choose best used car dealers

You can obtain financing from a used car dealer. You must know your credit score, and it is important to ascertain the interest rate which you deserve for that score. You must conduct a thorough research on the competitive interest rates which are available. Benefits of opting for a used car are many. When you opt for used car loans, your credit score will play an important role. If you pay bills on time and maintain a good credit, it will be easy for you to obtain the loan. You must select an authorised dealer who offers services like maintenance and certified repairs. Dealership is the most convenient choice for used car financing.

Financing a used car

You must take an informed decision when you opt for used car financing. You must narrow down on your choice of the car and evaluate your budget. You must decide your price range. Conduct a research on APR and other financial terms. You must read the contract carefully and negotiate the pricing. You must compare the finance rates which are offered by banks, credit unions and other lenders. You can save a lot of money by comparison shopping.

Sources of used car financing

You can contact credit unions, which offer low loan rates for used cars. At times, they offer credit insurance to borrowers. Banks offer loans for used cars and check the credit rating of the borrower. If your credit score is low you can contact finance companies, which offer loans to borrowers with poor credit score. If you are a young borrower, you can contact friends and relatives to finance a used car. You may need a co-signer in some cases for approval of the loan. For a good deal, you must evaluate the different sources of used car financing. You can sell your unwanted vehicle and obtain cash for junk cars.

Before applying for used car loan

When you apply for a used car loan, the loan officer will ask several questions. He will enquire how much amount you want to borrow and for how long. He will ascertain the age of the car and the selling price. The loan officers will ask the potential borrowers about their employment and credit cards, debt and income. You must find out the APR, additional fee and restrictions on the loan from the officer. If you opt for financing from dealers, you must compare across the competitive quotes and choose the best.


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