Guide To Financing A Used Car
June 30th, 2010 | 
Author: Guide To Financing A Used Car
So you’re contemplating purchasing a used car? Whether the dealership calls it a preowned vehicle a used car or a “new to you” vehicle it amounts to the same thing. These can be fantastic deals giving you a needed vehicle without the depreciation that strikes a new car the second you drive it off the lot. However now that you have decided to look at what’s for sale you’ll need to know a bit about financing options. For instance how long can you finance a used car? Is an extended warranty included in the financing?
When choosing financing for a used car there are several things that you must look for prior to making any decision whether on the car or the financing option. First is the car worth financing? Obviously the car has some value or the dealership would not be selling it but will it hold its value throughout the loan? To determine this you’ll need to consider the brand of the vehicle as well as how many miles it currently has on the engine. There are other factors in the equation as well but many of those are out of your control such as the state of the auto market when the loan is finally paid off.
Another area of concern when financing a used car is the extended warranty. Many used cars have the remnants of a manufacturer’s warranty on them depending on the make and mileage on the car. However once that manufacturer’s warranty runs out there will be no coverage offered other than your insurance. You can however add an extended warranty to the vehicle and tack the cost of the warranty onto the auto loan. Of course this will raise the monthly payments and increase the cost of the loan by a significant amount. However this can be a very smart decision to make.
Of course there are many other considerations to make. Most of these apply to financing a used car or a new car. For instance you will need to know your credit score prior to applying for financing. You will also need a copy of your credit history so that you know there will be no nasty surprises waiting for you in the financing office. Finally you will need to know your monthly budget. How much can you afford in monthly payments? How long will it take you to pay off the vehicle with the minimum monthly payments? Remember that the total cost of the car is just as important as the amount you have to pay each month.
As a final piece of advice never expect to pay “blue book” value for a used car. You will finance the vehicle for the price the dealership asks minus whatever amount you are due from tradeins your down payment and tough negotiating skills. Remember that almost every part of a car sale is negotiable right down to the amount of interest charged on your auto loan.
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