4 Options For Used Car Financing
Two of the more important elements of buying a used car are negotiating the right deal and securing good used car financing. When it comes to negotiating the deal, it helps to know your pricing options and have a strong understanding as to what the car is worth. To get the right financing, you need to know your options and how to determine which option is going to save you the most money.
Borrowing From Your Retirement
If you are relatively young and have amassed a sizable retirement or pension fund, then borrowing against that fund is an excellent form of used car financing. For one thing, the interest rate you would get with your own retirement account is going to be lower than any loan you could get from a lender. Also, you are much less likely to be denied by your own retirement fund than you would a standard lender.
Borrowing From Relatives
It can be uncomfortable to borrow money from relatives, but it may be your best option if you have relatives who could offer you used car financing. While you never take out a loan with the intention of not paying it back, there may be times when you run into trouble and cannot make your payments on time. A lender is going to either repossess your vehicle, or take some other legal action against you. It can be expected that a relative will work with you and help you to catch back up on your payments without damaging your credit.
Go With The Dealer Financing
Dealer financing for used cars has developed a bad reputation and, in some cases, it is deservedly so. But there are plenty of dealers out there who offer legitimately good used car financing deals that can save you money. Dealers sometimes get promotional packages from lenders to help spur sales, and you can use those types of promotions to save money on your used car purchase.
If you do not want to go through dealer financing, then the most common choice is to negotiate a loan with the institution where you have your checking and savings accounts. You are not bound by any law to get your used car loan through your current savings account holder, and you should use your freedom of choice to find the best possible deal.
Some lenders have specials on car loan interest rates, while others tend to be a bit more lenient in their negotiations with first-time borrowers. Shop around to find the best possible deal for your used car loan, and be sure to get pre-approved before you go shopping so you know how much you can spend.
It takes preparation on your part to get the best possible deal on a used car. You have to be prepared to negotiate a price and stand your ground, and you also need to know exactly what you want to do when it comes to financing. When you have all of the details already worked out in your head prior to starting your search, then you can be in control of the entire used car buying process.