Buying a car, whether new or used, is a large expense and one that many people aren’t able to pay in full. Financing a used car provides many benefits, including buying a quality vehicle at a significantly lower price and the opportunity to rebuild credit. If you’re thinking of financing a used car, our pre-owned car loan guide below is a great way to get started.
The different ways to finance a used car
First and foremost, you have a couple of options when it comes to getting a used car loan. The “best” one ultimately depends on your preference and financial situation.
- Banks or credit unions – If you’re buying a used car from a private seller, you’ll need to obtain a loan from a bank or credit union. This option takes a bit more time on your part, but one of the benefits is that you get to speak with the lender yourself and find the interest rate that’s right for you.
- Through a dealership – The difference between applying for a loan directly from the bank and a loan obtained through a dealership is that the dealer submits your application on your behalf. Most dealers have great professional relationships with different lenders to get you the best deal and get approved quickly.
Include the total cost of ownership in your budget
When assessing your budget for a pre-owned vehicle, you’ll need to take into account insurance, gas, and maintenance costs along with your monthly payments. Once your application goes through, you’ll typically be presented with a few options including interest rates and the amount of the monthly payment depending on the length of the loan.
- How much can you realistically afford per month? Remember, it’s best to go below your means even if you can afford more.
- Would you prefer a lower monthly payment over a longer period of time?
- Would you prefer to have the loan paid off quicker with a higher monthly payment?
- How long will it take you to pay the loan off?
If you’re nervous about your credit score
Many people and other online articles will you to know your credit score beforehand, and that a good credit score is needed to be approved for a loan. For those with little to no credit, this can discourage them from applying for the loan altogether. However, our used car dealership in Evansville can get you approved with a bank whether you have good or bad credit. Even if you were denied elsewhere, come see us and we can help you get approved.
A car is not “just” a car – it’s an important part of your daily life that gets you to and from work, the kids to school and activities, errands, groceries, and all of the necessities that impact your quality of life. A good used car dealership in Evansville knows this and will work on your behalf to get you in a pre-owned vehicle that’s within your budget and in good condition.
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