5 Keys to Getting a Car Loan for Your Used Auto Purchase

Getting approved for financing is one of the biggest hurdles when it comes to buying a used car. However, getting a car loan doesn’t have to be a complicated process. Check out our top tips and keys to help you get financing for your used auto purchase.

5 Keys to Getting a Car Loan for Your Used Auto Purchase

1. Define Your Budget

Before even visiting the used car dealership, establish your budget. Evaluate your current finances to decide the monthly car payments you can afford, accounting for insurance, gas, and maintenance expenses. This will help you determine the amount of financing you will require.

A budget will also help narrow down whether you should opt for newer or older used models. With used cars, much of the depreciation has already been absorbed by the first owner. You can splurge on a newer used model and enjoy the latest tech features without breaking the bank.

2. Check Your Credit Score

After defining your budget, check your credit report and obtain your FICO credit score. This will enable realistic expectations when applying for auto financing. However, poor credit doesn’t mean you won’t get financing. You can opt for dealership in-house financing and build your credit back up through timely car payments.

3. Assess Your Financing Options

Exploring financing options on your own can be a hectic job. You should consider getting financed directly through the used car dealer. Dealers work with numerous banks and lenders, so they can offer you multiple options under one roof. All you need to do is fill out the financing paperwork.

The team will send out your application to multiple lenders and present you with the offers. You can then choose the best offer that suits your budget. This option allows you to access competitive rates without filling out multiple applications. 

4. Consider Your Down Payment Amount

When buying a used car, you will be required to put down some money upfront. A larger down payment lowers your loan amount, which translates to lower monthly payments. If you can, put together a large down payment to shorten the loan term.

Alternatively, you can trade in your old car and use the equity for your down payment. Your dealer can value your car and facilitate the trade-in process to boost your down payment ability.

5. Understand the Loan Terms

When finalizing loan terms, you should assess the interest rate and length of the loan. Aim for the shortest term you can afford the monthly payments on. This allows you to pay off the loan faster and pay less interest over time. There is always room for negotiation, so don’t shy away from negotiating for better terms.

Visit Lee’s Auto Sales of Fayetteville Inc to explore our inventory of used cars and discuss financing with our team.

Tags: Auto Financing, Car Loan, Lee's Auto Sales of Fayetteville Financing
Posted in Fayetteville Dealer | No Comments »