Can I Borrow Money To Buy A Used Car?
This summer, we’re gathering our best tips and tricks for buying used cars and sharing our most sought-after strategies for ensuring you get the most bang for your buck.
This article was originally published in 2019 and has been updated to reflect the market conditions of the current inventory crisis.
Can I borrow money to buy a used car? It’s a question we hear often!
Borrowing money to buy a car can be a daunting and confusing process— a used car, even more so. V&F Auto Sales has been serving the Western Mass community since 1988, providing our customers with top-quality, affordable vehicles, and, over the years, we’ve learned a thing or two about financing used cars.
These are some of the most common financing options available to buyers on the used car market.
Ask For A Dealership Loan
Many dealerships like ours offer several affordable financing options if you can’t afford to pay the full price in cash at the time of purchase. Most used car vendors also offer both short-term, partial loans if you’re able to put most or some of the money down on the vehicle and longer-term loans for bigger purchases.
It’s important to read the loan agreement in its entirety so you know exactly what you’re getting yourself into. Make note of the down payment and any extra fees, along with the interest rates and their variability over time. Bigger dealerships tend to have stricter, more rigid terms when it comes to financing packages, while smaller and family-owned businesses like ours have more flexibility with each customer.
Secure A Bank Loan
Most banks, credit unions, and other financial institutions offer reasonable auto loans for members and account holders, as long as you’re in good standing. Typically, a customer can choose between a used-car loan or a more general auto loan, usually reserved for new vehicles.
When getting a loan from an institution, it’s important to be mindful of the terms of the loan, such as the starting interest rate, if the interest rate is variable or static, whether or not collateral is required, how default or late payment can affect your co-signers, and other terms as these tend to be less flexible than dealership terms.
That said, the better your credit is and the longer the customer history you have, the more bargaining power you have to push for better loan terms.
Make A Savings Plan
If you know you’ll need a new car in the distant future and have time to plan ahead, you can also make a savings plan. Start by performing some research to determine a reasonable budget for all of the specs, features, and other requirements you’ll need, then figure in fees and taxes. Once you have a number for the price tag, break it down– divide the dollar amount by the number of paychecks until your planned purchase date, and you’ll know how much you need to save every week (or every other week). Paying for your car in cold, hard cash is a great option if you can afford it, and don’t want to have a car payment hanging over your head every month, but this method requires a considerable amount of self-control and discipline.
Many people who use this method find it helpful to create a separate account or holding place for their “car fund.” Some even set up a direct deposit into their account to streamline the process with every paycheck.
Whatever payment plan you choose, V&F is here to help! V&F Auto Sales has been serving the Western Mass community since 1988. We strive to provide our customers with top-quality, affordable vehicle inventory and convenient financing options so you can find a car you love without breaking the bank. View a complete list of our inventory on our website, or visit us at 7 Harding St, Agawam, MA 01001.