Are Used Car loans Easier to get than New Car Loans

You might just be in the best possible position if you are buying a used car. As you know, used cars are typically cheaper then their newer models. In most cases the dealer is trying to get these cars off their lot, so they can make room and make quotas. You might have a lot of options if you simply take the time and walk through a used car lot. You're truly in the ‘driver's seat' when buying a used car and setting up a loan for one.

What you have to remember is: you are still buying a car. Certain factors are true whether you are buying a new car or used. The time period you want the loan for, what your credit rating is, are you leasing or buying and most importantly, what the price of the car is; all these factors come into play. But with a used car you have a little more room to negotiate; the age and condition of the vehicle will of course affect its price…and therefore the terms of your loan. It is in your best interest to determine the car's price before you talk about your monthly loan payments. Be careful though, the dealer will push to lock you into a monthly rate and work that into the price of the car. Remember, discuss price first; get that number out on the table before you move onto the loan negotiations.

Next will come the dreaded credit check. Unfortunately this is the one part of the proceedings where there is no ‘gray area'. The numbers are what they are, determined by your credit. From here the dealer will see if indeed you can afford the car you are looking at. Even if it is a used car, the entire negotiations might be for naught if you can't afford the monthly payments needed for the used car loan. A lower credit score, anywhere under a 580 will still usually get you a higher interest rate, around 17% or so. This is true whether you're buying new or used.

There is a reason you are coming in for a used car which the dealer knows this already. It could be a matter of expense; it could be that you know you might get a better deal on last year's model. It could be that you simply do not want to get into a loan where you'll be making high monthly payments, even if you can afford them. And it could be, that you do not want or need a new car and do not want or need the pressure of trying to buy one. A used car loan might just be the right loan to put you in the car of your dreams, with payments that aren't a nightmare!