Interested in learning more about how to finance a used car? Head on over to AutoGuide.com for the full story.Used cars, just like new ones can be financed, but the process can be more complicated. Here’s what you need to know if you’re planning on buying a used car with borrowed money.
There are two main ways to finance a used car. There’s the robust way, and the easy way. We’ll start with the former, which involves getting a loan from the bank. Start by getting your credit history and score which is important for lenders to determine the rates and terms available for you. There are three major national credit bureaus for the U.S.: EquiFax, Experian and TransUnion. Call 1-877-322-8228 to request a free credit report. If your credit score is 680 or above, you’re considered a prime borrower and will get access to the best rates available.
Now that you have your credit report and score, you can contact banks and credit unions to see what rates and terms are available when it comes to a used car loan. For cars older than ten years, most lenders will offer shorter terms. Different lenders may have other requirements, like a maximum age, mileage or that the car comes from a franchised dealer. Very few will allow you to buy a salvage titled car. Additionally, used car loans tend to have higher interest rates than what you can find at a dealership when buying a new car so don’t expect zero percent financing when it comes to buying a used car.
After researching the best rates and terms you should get a pre-approval for the loan.
Another option is to use a credit union, they may have better interest rates or offer to lend you more money. Of course, you need to be a member although that shouldn’t discourage you because membership isn’t necessarily difficult to gain. With your pre-approval in hand, it’s time to head to the dealership or seller.