Some automobile shoppers would prefer to buy a brand new car right out of the factory. However, if you are like a lot of other people looking to buy a car, buying used will make more financial sense for your budget. Buying a used car means you get a vehicle with a few miles on it for a much lower price than what you would have to pay for a new car, which is fair trade for many.
While buying used is a good idea when it comes to automobiles, obtaining financing for a used automobile can be a little more difficult than if you chose a brand new car. Here is a look at a few things you should know when trying to obtain financing for a used car.
Some lenders will prefer a higher down payment when you buy used.
A car that is used will likely not have as long of a life span as one that is new. Therefore, the terms of the loan can be shorter when you are offered a loan from a lender. Because of this, it can be preferable if you are able to put more money down when you buy the car to lower the overall amount you need financed and keep your monthly payments lower.
It can be easier to get financing from a lender on a used car through a dealer.
If you find a used car for sale by a private owner, it can be difficult to obtain financing for the vehicle. However, if you find a used car through a dealership, the lender will be more apt to offer you a loan. This is because dealerships are considered more reputable than private parties. In a lot of cases, if you buy a used car from an auto dealer and something goes wrong soon after, the dealership will work with you to make repairs, which is not something a private owner will do.
A lender may have strict requirements about the car's condition before they will approve a loan.
There are certain things about a vehicle that can make it difficult for you to get a loan, especially with a used car. For example, if a used vehicle has high mileage, you will be less likely to be able to get a loan, especially with some makes and models that don't hold a good resale value with higher miles.