Planning to buy a used car and running short of money? Then, used car finance can turn out to be the ultimate solution. Designed for helping you purchase the car that you want, these loans are offered by financial institutions, banks and reputable companies (lenders). Every lender stipulates basic requirements to be eligible for placing a request for finance and you (burrower) must adhere to them. The terms and conditions vary from one to another and have to be taken into account before you apply for finance.
How to Choose A Lender for Used Car Finance?
When it comes to choosing the best finance solution for used cars then you are gifted with tons of options, but the question is: which one is the best? Out of the many that you come across, only a few would stand to be a perfect deal for the car loan. Therefore, before relying on any company or organization, there are a few things that you should have in your mind.
- Loan Amount: On an average, lenders do tend to pay almost 75% to 90% of the car’s valuation and yes, there is a rough margin in-between. The idea is to look for those who are able to provide maximum amount of valuation, ensuring you are able to get the used car with peace of mind. Because you need to get 100% finance checked to get the car.
- Interest Rates: The interest rates of used car finance are relatively higher compared to those taken for new cars. This is because the depreciation value of second hand models is higher and this somehow manipulates its interest rates too. Have a look on how the company has designed its interest rates, examine whether it will be preferable for you or not and then make your move.
- Credit Score: The credit score will not leave a significant impact on the approval process of the loan, especially when you opt for unsecured loan. This means even those who have poor credit scores can consider opting used car finance.
- Process of Loan Approval: Most of the lenders take less than a week for approval of such loans. However, this again is dependent upon the type of lender that you choose and its average rate of approval.
Can You Get Used Car Finance at Lower Interest Rates?
The higher interest rates often keep bothering the borrowers who choose used car finance. So, is there something that can be done about it? Well, there are three things that you can do in order to get the loan at best interest rates and these are:
- Analyze interest rate in the market: Look around and know more about the current interest rates in the market to get an idea of the average percentage that is charged by lenders. Using this, you even get the opportunity to negotiate with the ones that you have selected for finance.
- See if the price can be negotiated with seller: When you want to stick to the terms of the lender and still aspire to have the used car then a good idea is to negotiate with the seller. With this, you get your car at the best prices and that too with lower interest rates for used car finance.
- Is there a package deal for the finance?: There are times when companies offer discounted interest rates as part of their promotion campaigns, why not reap their benefits? Ask more about the rebates that you can get with the use of multiple products along with used car finance.