Even when you’re purchasing a used vehicle, having enough money to pay for the full sticker price of the car is a challenging task. Because of this, you may be considering financing a used vehicle instead but want to know some more information prior to making a final decision.
Why Finance a Used Automobile
You might think that if you’re going to bother financing a car, you should just opt for a brand new one. While new vehicles have their merits, you should also consider the advantages of financing a used car. When people think of used vehicles, they sometimes have the wrong impressions. For example, they might think of a car chugging along down the road and ready to breakdown after more than a decade of use. Previously owned vehicles need not be in that condition. Someone might have returned a leased car after three short years; now, you have the opportunity to own that automobile.
Assess Your Budget
Another reason to finance a used car is because it will almost certainly be easier on your budget than a brand-new vehicle. While both types of cars are available at a range of costs, used vehicles will generally cost less than new ones. You can also make a smaller down payment, and your monthly payments will be smaller. If you’re hoping to put money toward other endeavors or simply want to keep a certain amount of funds in your bank account, choosing a used vehicle can help.
Improve Your Credit Score
In order to obtain financing for a car, you’ll need to be approved. A poor credit score could hurt your ability to receive approval. In the event that you are approved with a low credit score, you may find that the interest rate offered is just too high for you to pay. If you’re not quite yet ready to make the purchase, you should take the time to improve your credit score. You may want to speak with a representative at the dealership to learn what score you’ll need to qualify for the best rates.
Increase Your Income
When you go to get approved for financing, you will also need to provide proof of income. Regardless of how large of a down payment you plan on making, you need to show that you can also afford the monthly payments. Once again, you may want to speak with a representative to get a sense of what your goal should be. You may have an opportunity to buy a better car if you’re willing to get a second job or take on extra shifts at your current one.
Consider Trading In Your Old Car
If you currently have a car, you’re probably trying to decide what to do with this vehicle too. One option is to try to sell it privately and to then use the proceeds toward your new car. Still though, you may feel tempted to spend the money elsewhere if there’s a large gap between the sale of your old car and the purchase of your new one. Another option to consider is trading in your current vehicle. By doing so, you can have the assessed value of your car deducted from the amount you owe for the vehicle that you’re purchasing. Obtaining a price quote from the dealership is a smart idea. You are likely to receive less than you would if you sold the car privately, but the process is more streamlined.
The decision to finance a used car is one that can not only help you get a vehicle that you want but that you may need to get around too. Take the above considerations into account when you’re in the planning phases.