People used to look down on used cars, now up to forty million used cars exchange hands every year. As cars depreciate up to 30% in the first year they are on the road, it is not a bad route to consider when buying a new car. Looking for your first used car can be daunting. Luckily, there are a few tricks can help you guide your way through buying and financing your used car.
There are two places where you can buy a car- a Dealer or a Private Party. This implicates how you will finance the car. Buying from a private party is cheaper. Car finance lenders, however see less risk in buying from a dealer – making it easier for you to get a loan at a lower interest rate. It is up to you to decide which way to go. Keep in mind that you can use Certified Car Dealers. Due to their comprehensive technical check-ups, banks are more eager to finance cars bought from Certified Car Dealers. Here are five tips to keep in mind when going about financing a used car:
- Make sure you can afford it
Used cars tend to be cheaper than new vehicles, yet buyers should be able to pay back the loan in a reasonable period. The loan repayment should be a little less than 20% of your monthly pay cheque. It’s important to remember that used cars incur extra maintenance costs.
Don’t forget to set aside money for fuel and insurance – a cost new car owners sometimes forget about.
- Apply for financing in advance.
Applying for financing before going to the dealer may get you a better deal. Applying at a credit union may get a better interest rate than a bank. “You get a blank cheque from the credit union, take it to the dealer … stick to your guns, and you get a good deal,” says Mukesh Chatter, president of MoneyAisle.com, a car financing site. Earn-a-car also offers an easy way to finance your car and earn cash at the same time.
- Never pay the deposit in cash
If a deal goes south and you paid cash – you may never get your money back. You can always, however, dispute a credit card transaction. Most dealers are reasonable, but this is an easy way to avoid a catastrophe.
- Check the vehicle history report
When it comes to used cars the mileage is not the only thing we need to look at. A vehicle history report can reveal vital information about the car, including whether the odometer has been rolled back or if it has a salvage title, which means it has been declared a total loss by the insurance company. AutoCheck and Carfax are the best sources for vehicle history reports.
- Get an extended warranty
If the car is over three or four years old, chances are the warranty has run out. Extending the warranty can help save you from disastrous consequences later on.
Using these tips can make financing your used car a smooth-sailing experience. Earn-a-car offers an easier and more affordable way to finance your new car. For more information on financing your car- contact Earn-a-car today or visit our website.