For many drivers, used car ownership is the best way to go. Cars are certainly built better these days and if maintained properly, they could provide a smooth ride for hundreds of thousands of miles. The decision can end up saving the owner thousands of dollars not only on the sticker price but also on additional insurance expenses.
So if you are thinking of taking the plunge, there are several things you should expect from a use car dealer financing program.
- Expect To Pay More: Although consumers may save money buying used, they will actually be charged higher dealership financing interest rates than if they buy a new car. The reason used auto loans cost more is because “…on a new vehicle because there is less of a liability for the dealership and less could go wrong.”
- Expect A Financial Exam: Before deciding on what rate you will be charged for the privilege of borrowing money, the used car dealer financing officer will run a credit check, verify your personal information and will need to know your annually income. Only by putting you under a financial microscope can the loan officer figure out what interest rate you will be charged.
- Expect The Up Sell: There are three ways that car dealers can profit from your car buying your experience. Your trade-in, your used car purchase and the financing deal they offer you. Whomever you encounter at your local dealership are going to try to get as much as your money as possible. One way the car dealership financing department can do so is by tempting you with shiny accessories as well as additional services and protection plan. As long as you know the pitches are forth coming, the better you can defend yourself and secure the used car dealer financing deal you want.
- Expect Creative Math: Even the most honest loan officer is in the field to make money. Used car dealership financial opportunities will be presented to you in a multitude of ways, and typically the longer the loan, the more you will have to pay in the long run. Run your math prior to determine your monthly budget and time frame and try to keep the terms of your loan short and sweet.
Historically speaking used car dealerships got a bum rap. However, as more luxury dealerships are getting into the act selling certified pre-owned vehicles, the taboo is slowly disintegrating. Now since you are familiar with some of the nuances of used car dealership financing, you can expect is to have a positive car buying experience.
