To buy new or to buy used, that is the question. Rather, for some of us, given the high cost of buying even a modestly-priced new car, going with a used car is our only real option.

Fortunately, if you do your homework right, a used car can be a pretty good deal. You just need to do your research first, including finding out the projected resale value of the car for this model, the condition of the interior/exterior, and the car’s mechanical condition.

Besides choosing the right car, there is also that nagging question: “How will I pay for it?” Unless you have at least $5,000 or more saved up and an excellent credit score, you are probably not going to pay cash for your car.

But before you take out a loan for your used car, there are some things you can do to make sure you get the best-possible deal. The first is to educate yourself a bit about how used car loans differ from new car loans.

Auto Loans For Used Cars vs. For New Cars

When someone goes out and finances a new car with an auto loan, in most cases the loan is arranged through the auto dealership itself. New car loans are usually the ones you see advertised on television. With new car loans, because the dealership is affiliated directly with the lending company, there is a lot of flexibility. It is the new car loans that will sometimes offer zero-down financing or 0% interest rates.

However, with used car loans, you usually get the loan from a lending company who is not affiliated with the seller. But whether you are buying your used car from a private party or whether you are buying from a dealership, you will be getting the loan on very different terms than if you were buying a new car.

Used car loan lenders almost always require that you come up with some sort of down payment. And, there is no chance of a 0% interest loan. That said, there are still ways to stack things in your favor in order to get the best-possible deal on a used car loan.

5 Tips On How To Secure The Best Loan

Knowledge is power. Here are 5 tips on getting auto loans for used cars:

1. Know your credit score: Even more so than for new car loans, your credit score plays a starring role the interest rate you can get. Before approaching any lenders, be sure to check your credit score will all of the Big Three bureaus.

2. Find a car that you can afford: Before contacting any lenders, make sure you have chosen to buy a car that you can afford. The way to check: find an online loan calculator and type in different loan terms (e.g., 48 months, 60 months, etc.) and loan amounts to see what your payments would be.

3. Save up as much as possible for a down payment: The more you can scrape together for a down payment on your loan, the lower your payments will be and the easier it will be to get approved for a used car auto loan.

4. Seek lenders who specialize in auto loans for used cars: Do a search and compile a list of at least 5 lenders who specialize in auto loans for used cars. Hint: check with credit unions – they can be a great resource.

5. Flinch at your first offer from each lender: No matter how anxious you are to buy a car, always balk (or flinch) at the first offer. Ask them if they can offer you a better rate. Never hurts to ask and doing so could save you money.

Follow these 5 tips to increase your chances for approval and to get a better rate on your auto loan.

Author Bio: Get a list of the best used car auto loan rates in your area at: Used Car Auto Loan Deals.

Category: Finances
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