Purchasing a used car, truck, or SUV can get you a reliable ride while saving money. Many drivers throughout Rome, Manlius, and Utica are interested in learning how to finance a used car, so we’ve provided tips for doing so in the following post. If you’re shopping for your next vehicle, read Nye Volkswagen of Rome’s five tips for financing a used car.
Know Your Credit Score
Acquire a copy of your credit report before visiting a used car dealership. Knowing your credit score will help you understand what interest rates you qualify for when you apply for a used car loan. This comes in handy when negotiating with the car dealership about your payment plan. Find out what your credit score is at least three months before you buy a used vehicle to ensure you have time to go interest rate shopping.
Get Financing Quotes Car Before Going to the Dealership
You can get a used car auto loan through a car dealership, credit union, or bank. Before you apply for financing for your used car, have each of these parties give you a quote. Having this information gives you extra leverage when negotiating the terms, conditions, and interest rates for a loan.
Keep Your Loan Terms Short
You might get smaller monthly payments with longer terms for your auto loan, but the amount you pay in interest goes up the more time it takes to repay it. It might be tempting to stretch the term of an auto loan to reduce a car payment each month. However, in the long run you could end up paying more than what your used vehicle is actually worth.
Make at least a 20% Down Payment
Making a large down when you purchase a used car helps you avoid paying more than the car is worth overtime. A 10-20% down payment is what we recommend. Some drivers are tempted to make a down payment smaller than this, but if you’re ever in a situation where you need to sell your vehicle, you may have difficulty if you owe more on the loan than the car’s value. Making at least a 20% down payment can keep this from happening.
Use Cash to Pay for Registration, Sales Tax, and Doc Fees
When you purchase a used vehicle, many dealerships will bundle your sales tax, doc fees, and registration into your finance plan. Unfortunately, this can result in negative equity, or owing more on a loan than what a vehicle is worth. At least a few months before purchasing a vehicle, save up the amount you need to pay for extras like taxes and registration at the dealership. This helps to keep your auto loan small.
Learn More About Used Car Financing
If you live near Rome, Utica, or Manlius and are interested in financing a used car, Nye Volkswagen of Rome is here to help. Our financial consultants are on call to answer any questions you have about your credit score, eligible interest rates, and available financial plan. To find out more about financing a used car, please contact Nye Volkswagen of Rome online.