If you’re looking to buy a pre-owned vehicle, it’s a good idea to get financing ahead of time. This will speed up the buying process and help you stay within budget.
Getting financing pre-approved speeds up the loan process by giving you more time to shop around for a low-interest rate. It also allows you to say no to add-ons you may not be able to afford.
Lower Interest Rates
One of the most obvious benefits of financing a pre-owned vehicle is that interest rates are often lower. This is because car dealers borrow money at wholesale interest rates, which they mark up and pass on to you.
However, the rates they offer are sometimes better. This is especially true if the dealer is offering conditional or contingent financing.
Knowing the average interest rates for your credit score and loan amount is also important. This will allow you to shop for the best loan for your situation.
Less Expensive Monthly Payments
When you finance a pre-owned vehicle, your monthly payments are typically less expensive than those associated with a new-car loan. This is because depreciation is less for a used car than a brand-new one, so the monthly payment is lower.
A good way to keep your costs down is to shop for financing options like those from Turner Chevy before buying a car. Get a cosigner, consider funding in-house, or look at dealership specials for deals on down payments and financing.
Dealerships want to see you walk away with a car, so they will likely offer competitive interest rates on your loan. This is especially true if you need better credit or use your trade-in to substitute for part of the down payment.
Financing a pre-owned vehicle can be easier than purchasing from a dealership. Dealers often focus on monthly payments, leading to long loan terms and bad interest rates. Financial institutions usually offer better rates, so shopping around and comparing is always good. With a pre-approved financing agreement, you can also spare yourself from the additional fees dealers often charge for add-ons and warranties. In the long term, this may save you a ton of money.
Maintain Your Savings
The best way to maintain your savings when financing a pre-owned vehicle is to save in a high-interest account or certificate of deposit. Some of these accounts can pay as much as 150 times higher than traditional banks!
Consider creating a budget if you need help deciding how much to save. This will help you identify where to cut back on expenses and redirect the money saved toward your car fund.
Consider temporarily raising your income by working more hours at your existing job if you urgently need to purchase a new automobile. Although it can be a hassle, doing this may help you achieve your financial objectives more quickly.