Looking Into Used Auto Loans

| August 6, 2011 | 0 Comments

If you are buying a car that is previously owned, you may need to borrow the money for the purchase. Used auto loans are not too hard to get, but there are some things to consider about the process. One loan could be much better than another, and here are some tips to get the best deal when you buy your next car.

Credit Unions

Credit unions can be an excellent source for borrowing money on a car. In some cases, you can borrow the money with only your signature. However, this amount is usually limited to a thousand dollars or so.

There are advantages to borrowing on your signature. The most important benefit is your car will not have a lien on it. If it is an older car, you may not wish to pay for collision coverage on your insurance policy. However, if there is a lien on the vehicle, you will have to have full coverage on the car.

Credit unions can be easier to borrow money from. Often times, they are not in the business to make money, as they are often member owned, and you might be able to have your payments taken from your paycheck. This can be done with a credit union through your employer.

Banks

Banks may be a little harder to borrow from, as they may want a substantial down payment. Sometimes, it may be as high as twenty percent. Of course this will depend on the bank, and how good your credit rating is.

Car Dealers

If you are buying your car from a dealer, they may offer financing. However, many dealers may also have high interest rates. Always check with other sources before you finance through the dealer.

Another thing to be aware of is payment plans. For example, a dealer may sell a vehicle based on low weekly or monthly payments. Look very closely at these deals, as the interest may be very high, in some cases.

Other Sources

Some places will offer to finance anyone. This can sometimes be a good deal if you have no other way to purchase a car. However, it is important to look at the interest rates on these deals, as they can sometimes be high.

Summary

If you are in the market for a previously owned car, you may need to finance your purchase. There are several places to look for used auto loans. Your local credit union may have some very good deals. When you shop at banks, you may need a substantial down payment. Car dealers and places that finance anyone may have higher interest rates. However, in some cases, they may be your only choice.

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Category: Car Loan

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