One of the many advantages of buying a used automobile is that it can save you a lot of money; indeed, the discount over the original, manufacturer price can be steep, sometimes as much as 45 percent! Even with this discount, however, a used car can be a considerable financial commitment. Ideally you’ll be able to pay for it in cash, but not everyone has that luxury, and you may find yourself needing some financing assistance.
There are a few options available for financing, and we’ll list them below. With any specific questions or additional inquiries, you can always reach out to us directly.
Financing a Used Car
There is more than one way to get a used vehicle loan, and in fact there are three primary locations where you’ll find loans available—the bank, the credit union, or the dealership itself. Generally speaking, the credit union is where you’ll find the best interest rates, though it always pays to shop around and just see what’s out there.
By contrast, financing directly through your dealership may seem like an easy and convenient option—and it is. You should know, however, that upselling you on financial products, such as a loan, is one of the primary ways in which a dealership makes money. As a general rule, then, the financing rates you’ll get at the dealership will be much higher than what you’ll find at the bank.
Used Car Finance Rates and Calculator
Speaking of rates, it’s important to get some basic sense of what they might be. You can run a quick Google search to find whatever the current rates are, and perhaps calculate a basic, estimated payment. Crucially, though, rates are ultimately very personal, and depend on a number of factors. Your own interest rates will be determined largely by:
Your payment history (that is, how well you do at making your monthly payments on time, including mortgage, credit card bills, student loan payments, etc.).
Your current debt (how much money you currently owe; basically, how much you would be over-extending yourself to get a new auto loan).
The length of your credit history (the longer your credit history is, the more trustworthy you will seem to the lender).
Again, generalizations can be made about where to get the best financing, but you’re always going to want to shop around and compare rates. Doing so could potentially save you a decent sum of money over the lifetime of your loan.
Best Used Car Financing: Zero Financing on Used Cars
In fact, you may find that you’re eligible for 0 down and extremely low financing on a used car—but the only way to know is to check around, do your homework, and compare different lenders. As you do so, always make it clear that you’re looking to buy a used vehicle, which can sometimes impact the rates. With any additional questions about the used car process, visit Get My Auto today.