If you are in the market for a pre-owned car, you will find that financing a used car is not as easy as financing a new car. If you aren’t sure how to go about financing a used car, here are a few tips.
Get Your Credit Report Before Visiting the Dealership
Financing a car is not like getting a home loan. You can get an auto loan even if you don’t have great credit. The only problem, however, is that you’ll have to pay a higher-than-average interest rate. So, before you visit a dealership, make sure to get your credit report.
Get Quotes
Before you settle on a loan offered by a particular lender or dealership, get as many quotes as you can (at least three), and compare the rates offered. Make sure to also take the other fees charged into consideration since it could affect the cost of your loan. Don’t assume that the quote you are offered is final. If you think that the lender has charged you more than what’s usually charged, check if they can lower the rate. Usually, negotiating will help you get a lower rate of interest.
Make a Large Down Payment
One of the best things you can do to increase your chances of getting an auto loan at an affordable rate is making a large down payment. Ideally, you should put at least 20% of the total value of the car as the down payment. If you can afford to make a bigger down payment, you should because it will work in your favor. Making a large down payment will not only reduce your monthly payments, but it will also lower the interest rate you are charged.
Once you have your car loan in place, it’s a good idea to review the loan rates every couple of years. If the interest rates drop in the future, you may want to refinance your loan. Doing this can help you pay off your loan faster and save money.
