Finance. When purchasing, finding enough funds first is paramount. Still, it’s often challenging to decide whether finance on a used car is worth taking out. Luckily, if this is a question you’ve been asking yourself, we’ve outlined several pivotal factors as follows to help.
If you are looking to purchase a new car, always remember to run a number plate check to ensure the vehicle does not have outstanding finance. If a vehicle has finance recorded against it, this means the car is not actually the seller’s, but belongs to the finance company, and should not be sold on.
Taking Out Finance for a Used Car Purchases
Before we go any further, we first need to check: is taking finance out for a used car purchase possible? After all, it’s easy to understand that finance is available for new cars. However, it’s not so clear if second-hand offers the same.
Well, in short: yes! There are several ways you can take out finance on a used car. Often, this will be directly from the dealer themselves. However, you can potentially also take out a bank loan and the like for other used car sales.
Is Finance on Used Cars the Right Way to Buy?
Given that taking a loan is a genuine option for used car purchases, it’s natural to ask: is this the right option to follow? Well, for many people, finance on used cars can be an excellent way to buy. After all, while second-hand models will be cheaper due to depreciation, that’s not to say they’re “cheap” per se. In fact, even used can still be very costly.
Nonetheless, there are a few noteworthy benefits of taking finance on used cars. Most obviously, this allows you to potentially purchase a higher-grade vehicle than you may have been able to afford outright. Since you’ll generally put down a significant portion of the value as a deposit, the actual loan value will usually be quite low too. This may reduce the repayment value, making a loan more affordable than you might have expected.
Depending on the type of loan you take out, you may also benefit from additional protection than simply buying outright. This could allow you to buy with greater confidence overall.
Finance Isn’t Right For Everyone
Of course, the likelihood of getting a finance deal on used cars will still depend on factors such as credit. So, if you have a poor credit rating, any used car loans may be more expensive. This may make them less practical options for those whose financial position isn’t so well-rated.
Furthermore, if you choose to get finance from a dealer directly, the rates may be above the average. After all, dealers have free reign often to charge what they want on their vehicles. As such, if you’re taking out a loan, be sure to shop around to ensure you’re getting a good rate. Shopping around is often very important to this end.
Final Thoughts
If you have been planning to buy a vehicle, there’s plenty to keep in mind. One of the biggest factors here is whether you take out finance for your car purchase. Luckily, if this is something you’ve been looking at, there are several things to keep in mind. And, hopefully, today’s guide will have given more insight into whether finance is the right route for you.
