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Financing A Used Car

May 13, 2011

It is important in the world of used car finance to do your homework. Having some basic knowledge about the type of car you are purchasing is important. After all, you do not want to pay one penny more for the vehicle than it is worth. You need to have between three and five prices for the identical vehicle that you are purchasing before you say a word to the salesperson. Comparison shopping is essential in used car finance. Finding the best interest rate is vitally important. Also, if you have a mechanic or a friend that knows a lot about cars, it would be an excellent idea to take them along with you when you are out car shopping. Having a mechanic or qualified friend check the vehicle out will prevent years of costly repairs. Once you purchase the vehicle, it is yours and there is no opportunity to return it if you change your mind. The world of car finance can be treacherous terrain if you are a novice. There are numerous sharks in the water of car finance that are constantly on the prowl for fresh blood. Have your car insurance lined up before you go to the car lot and you will need a down payment for this as well. This becomes even more challenging when your credit score is less than sterling. How much you pay for car insurance is determined by your credit score as well. It is important to be prepared with a reasonable down payment when car financing. Twenty percent is a good rule of thumb to make sure you can afford to pay for your new used car. Do not attempt to stretch out the car financing for more than four years. Ideally, you should keep the used car financing at 36 months or three years. It is important to take into consideration the cost of gas, oil changes, general vehicle maintenance and insurance along with your monthly payment. Of course there are always the unexpected and often costly repairs that might not be in your budget. It might be necessary to eliminate a few afternoon coffees or weekly lunch dates to ensure that you can meet all your monthly obligations. Ultimately, keeping a rainy day fund financed by giving up some luxuries might be the best solution to prevent not having the funds to repair your vehicle. Credit unions are usually the best source for financing a vehicle. The rules for joining them have become more relaxed and once you become a member, you can hit them up for a loan.

Author: CarLoans.com Staff


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