Should I Get a Loan for A Used Car? Determine Your Chances Online

Many people, who have bad credit, get confused whether to buy new car or used car. Although used cars are cheaper as compared to new cars, the process of getting one financed at a low interest rate can be complicated. This is because the rates of interest charged for purchase of used cars could be higher than those charged for financing of new cars since used vehicles have less value.

Besides, the exact status of an applicant’s credit status can also have a huge impact on the type of interest rates which are offered. And the condition of the used vehicle could come in for a special consideration and so will be the loan term. For financing of new cars, lenders provide longer loan durations but for extending credit for purchase of used cars, loan terms will be much shorter.




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In addition, loan dealers will also check borrower’s financial capacity to repay the loan on time. But the key for finding the lowest and best interest rate is extensive comparison shopping. If you shop and compare free proposals secured from several different lenders online, you can identify the right type of lender for your specific needs and budget. You can get help from a local expert to simplify the task.

The best way to buy car is to purchase it in cash but if you don’t have sufficient money, you will have to get it financed. And when it comes to financing, people often make the mistake of choosing the very first proposal just because they think that they might not be able to get a better deal due to their poor credit. There are other options for financing cars.

Should You Go for A Used Car Loan? Make an Informed Decision Today

  • The rate of interest - Interest rates charged for bad credit used car loans could be much higher as compared to those charged for other conventional types of auto loan finances. Currently, they may be 5 to 7% higher than those for new auto loans.
  • The loan amount – Even loan amounts approved for purchase of used cars are smaller than those that are approved for financing of new cars. This is due to the fact that used cars are cheaper than new cars and car prices depreciate fast.
  • Duration of the loan - New cars can qualify for longer loan repayment terms but loan durations offered for financing of used cars are much shorter. Lenders provide loan terms for new cars from 5 to 7 years but for used cars, they are only 3 years.

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