Guide to used Car Auto Loans

When you are looking to buy a used car the best place to start to research for an auto loan is online, to compare quotations and see what deals are available on loans. A lot will depend on the type of used car you are considering. Some lenders limit loans to a minimum amount which may be more than the value of the used car you have in mind, whilst some lenders limit loans dependant on the age of the vehicle in question.

It is worth remembering that it is not worth considering a loan for an amount which is more than you intend to borrow, even if the loan becomes viable through opting for a longer repayment term. The key should be to take the best loan you can get over the shortest repayment time, as the longer you have the loan the more it will cost you to service in overall repayments. You don’t want to be stuck with a car loan long after your purchase has become a clunker.

You can obtain a used car loan from a financial institute or a car dealer if you are purchasing directly from a second hand dealer. However it makes much better sense to get a pre approved loan first, which will enable you to buy from a private seller if you wish, or to have a loan on offer when you go into a dealership to negotiate a used auto purchase.

Having a pre approved loan which you are already familiar with, gives you the option of comparing it with any loan which the dealer my come up with. This gives you the ability to negotiate down the price of the car, and you may well find it comes down if you already have access to a pre approved loan, which basically puts you in the position of a cash buyer.

Some lenders set conditions on the loans they issue. Some call for you to deal directly with one of their approved car dealers whilst some won’t allow the loan to be used for a private sale. Some lenders require details of the age and model you wish to purchase whilst others will just base their loan offer on an agreed amount of capital.

The interest rates available on a used auto car loan will vary depending on your credit score and the length of time you opt to repay the loan over. If you are able to receive pre approval for a set figure this gives you the freedom to then look for a vehicle knowing how much you have available, so if you do deal with a second hand car dealer only disclose the amount you will be willing to spend, rather than letting him know how much you can pay on a monthly basis,

Approval will be given by most lenders within twenty four hours, leaving you free to look for an auto, or to go ahead and start negotiating for a car you have already made your mind up about.