Answers to Your 6 Biggest Used Car Financing Questions
The topic our customers ask about most often is used car financing.
We know used car financing is complicated. Just remember that it’s ok to learn as you go. Here are a few tips to get you started on the right track.
1. Do I need to make a down payment?
A down payment isn’t always required for purchase, but it’s definitely a good idea.
- It will reduce the amount you’ll need to borrow.
- It improves your chances of loan approval.
- You may get better terms with a down payment.
- It will reduce your monthly payment.
Your trade-in vehicle can serve as a down payment. If you still owe on that car loan, the amount of “equity” you have can serve as your down payment. “Equity” is the difference between your trade-in’s loan payoff amount and the actual cash value of your car.
Depending whether you have a trade-in or not, and if you can swing it, any additional down payment – even a few hundred dollars – has a very positive effect in the long term.
2. Can I get approved if I have bad or damaged credit?
There are car loans for people with bad or damaged credit, but you need to be careful when shopping.
Auto loan seekers with bad or damaged credit should enter the car loan process knowing they’ll pay a higher rate than someone with better credit. But don’t let that discourage you.
At DYE Autos, we successfully provide car loan options to customers with many different credit profiles. We have over 70 years experience and we’ll help you!
3. Why does a car’s age and mileage affect my financing options?
In the world of used cars, two factors have a major effect on pricing: mileage and age.
It’s no surprise that higher-mileage cars and trucks carry more affordable price tags, however, many car loan companies may be unwilling to offer terms on older vehicles. There’s more risk involved and that equates to higher car loan interest rates.
4. How much should my payment be?
Everybody’s car buying budget is different but if you’re planning on financing a car or truck, your monthly payment is always a consideration.
As a general rule, your car payment should not exceed 20% of your take-home pay. This rule should include all financed vehicles in your household, whether you have one or ten cars in your garage.
5. How much car can I afford?
It’s never good to just guess at what car you can afford. It’s too easy to get caught up in the excitement, and then miss important details.
A better approach is to make the best choice for YOU so that you don’t end up saddled with a something you can’t afford.
At DYE Autos, we recommend that before picking a random price range that you feel comfortable with, you consider all the factors that contribute to the cost of your vehicle.
- Finance rate and loan term
- Value of your trade-in (if you have one)
- Down payment amount
- Monthly gas and repairs
- Insurance costs
Information is power. Instead of merely picking a price range, you can use an online loan calculator or better yet, give us a call and we’ll help you decide how much you can afford to spend on your next car or truck.
6. Should I get pre-qualified?
Yes, and it’s a good idea!
This fast and easy process lets you choose how much you want to borrow based on the type of vehicle you’re looking for. If you’re interested in used car financing with DYE Autos, click >>>here<<< to get pre-qualified.
One of our helpful finance specialists will contact you to discuss any available financing options, including the amount you’re qualified to finance.
Got more questions? We’re here to answer them. Call us at (303) 286-1665 or just use our contact form >>>here<<<