A Guide to Used Car Loans
Before you go out and buy that new car, you’ll want to spend some time thinking about your loan. Signing up for just any loan without investigating all of your options can be a very dumb move.
Taking out a loan for a used car purchase starts with determining the kind of car you want to buy. Take some time to figure out exactly what features you want in your car. This will keep you from making impulse purchases that are outside of your budget.
Spend some time looking at cars that have the features you’ll need. Even after just a few hours of visiting car lots in your town, you’ll have a real good idea of the prices in your local market. Knowing the prices will help you with the financial calculations you’ll want to know when comparing loans.
Many car dealerships have companies they recommend to provide loans to their customers. You can usually find a better deal if you shop around on your own. This will give you the opportunity to comparison shop for the best possible rates.
Don’t forget to take into account how much you can afford for your monthly payment. Having a realistic idea of what you can spend will have a direct bearing on what kind of car you will be able to buy.
It’s easy to find an auto loan rate calculator online. Most loan providers and many car dealerships feature them on their web sites. Simply plug your numbers into the calculator and you’ll get an idea of how much car you can afford.
When shopping around for a loan, make sure you check online and offline lenders. The great part of online shopping is that you can quickly compare a number of lenders to see whose rates are lowest. But don’t forget to look offline. You could find a great deal in your town.
Banks aren’t always the best places to look for loans for a used car. More often than not, they will deny a used car loan application. There’s just not enough value in the car to justify the risk. You may have more luck with a private lender.
Check with people you know. Ask them who their lender is. You’ll get an honest evaluation of the lender and maybe you’ll find a really great deal. If you have friends who are car enthusiasts, make sure you ask their advice. They can be a great source of information.
When comparing loans, it’s a good idea to find out about the number of months you’ll be making payments. The most common loan term is 36 months, or three years. You can also find longer term loans, but you may end up paying a higher interest rate. You’ll need to do some thinking to determine which option best fits your budget.
The smartest car buyers are those that know all of their options before they ever set foot in a dealership. This includes knowing where to go to get the best rate on a car loan. Do your homework in advance and you’ll save money and feel like you got a great deal on that new used car purchase.
