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Buying a Used Car? Advice for Smart Financing
Used car advice is important for more than just the vehicle’s purchase price. Sure, you can get a great deal on a used car, but you also need to secure smart financing. Here are some points to consider.
Used Car Loan Advice: Check Rates
Most used car advice experts recommend that you thoroughly research loans for used vehicles before you buy. Used car loan interest rates are higher than for new cars. Check with banks, credit unions and finance companies. Almost every car manufacturer has a captive finance company and some of these offer very attractive rates on used car purchase. Consider using a car loan broker as well. Keep in mind that lenders are more restrictive when it comes to used car loans. Don’t look at vehicles over 8-years old or with more than 100,000 miles.
Check Your Credit Rating
What you’ll be able to buy, and whether you can get the best rates depends on the strength of your credit rating. Used car advice in this respect is the same as for new car buying: know where you stand credit-wise before you buy. If you have excellent credit score (750 to 850), you’ll get the best financing rates. If not, you’ll pay higher loan interest rates. Need to improve your credit? Do so for at least 6 months before you buy.
Get Pre-Approved
Used car advice also includes getting pre-approved for your financing before you cement the deal. This ensures that you will be able to focus on the car’s purchase price and not be confused with talk of financing rates or monthly payments.
Car Warranty Advice
Do you need an extended warranty on a used car? Used car advice experts recommend that you go for a certified pre-owned vehicle that already carries a warranty. Check the vehicle’s reliability and repair ratings through Internet research.
Car Leasing Advice
Remember that you can usually lease a more expensive vehicle than you can purchase. The downside is that you don’t own it at the end of the lease. Also, if purchase price on a new vehicle is why you’re looking at used, you may want to consider leasing a new vehicle.
Negotiation Tips
When you’re buying a car used, it pays to keep these points in mind when negotiating.
- Sticker price is only the beginning point in negotiations.
- Use a larger down payment to lower the purchase price and amount you need to finance. Only talk financing after you’ve agreed to the purchase price.
- Know your budget and keep to it (don’t be tempted by bells and whistles you can’t afford).
- Look at vehicles with less options or accessories, as all the extras add to the price of the vehicle and the finance amount.
- If using dealer financing, be prepared to walk if you can’t get a better deal.
- Leverage existing relationships with banks or credit unions to get better used car financing.
- Watch out for added fees in used car financing. They can really add up. Read the contract thoroughly, question anything you don’t understand and get rid of junk fees.
