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Used Auto Finance - How to Finance a Used Auto

car financing loan purchasing

Over the past few years, economic conditions have caused many people to find new and more affordable ways of doing things. One of the most common ways to reduce costs has been to either delay purchasing a car, or purchasing a used car as opposed to a new one. While purchasing a used car makes far more financial sense then getting a new one, financing a used auto can be more complicated than financings a new one. Luckily, there are several ways to increase your chances of obtaining financing a used auto.

The first way to increase your chances of being able to finance a used auto is to improve your auto credit application. Similar to purchasing a home or getting a personal loan, used auto lenders will look at your credit score to determine whether it would be risky to offer you a loan. To improve your credit score quickly, you could pay down outstanding credit card balances and clear up any charged off accounts. This should have an immediate impact on your credit score and history. Also, the more money you put down towards the purchase of the car, the more likely the lender will be to offer you the financing.

The next way to increase your chances of being able to finance a used auto is to attempt to get financing directly through the auto dealer. Many used car dealers also contain financing departments that specializing in providing loans for the cars that they sell. Since the dealer will be profiting off of the sale of the car, they will be far more likely to approve you for a low rate than a traditional used auto lender. This decrease in auto rate could save you hundreds of dollars across the course of the used auto loan.

If you are purchasing a car from an individual, or the dealer does not offer used car financing, there are still ways that you could obtain financing. The second best source of obtaining financing would be to obtain it from a bank in which you already have a relationship. If you have a positive history of repaying a loan or maintaining a checking account with a bank, you will have a better chance of being approved for a loan than if you did not previously have a history. Keep in mind that the interest rate and fees associated with a used auto loan will tend to be higher than what your bank would offer for a new car loan.

Used Car By Owner - How to Find a Used Car for Sale by Owner [next] [back] Usc Credit Union - Trojan Banking: The USC Credit Union

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