Hoping to buy a car this year? Well, buying a vehicle doesn’t necessarily mean you have to buy a brand NEW one.
If you have bad credit, you may also be especially interested in looking into saving as much money as you can on this purchase, as well as the overall management of a car loan over time. In large part of finding an affordable vehicle also means finding a favourable interest rated loan.
Therefore, the real question to ask here is, can I get a low rate car loan when buying a used car?
As you may already know, interest rates will vary depending on the individual’s credit score. Furthermore, bad credit car lenders may be able to offer affordable rates and terms that will enable these borrowers to successfully manage their loans . . . but more on that in a little bit.
The Benefit of Buying a Used Car
First and foremost, the obvious number one reason why opting to buy a used versus a new vehicle is the fact that it will cost a lot less than if you buy it brand new. With that being said, not only does it take less time to save up enough money for this vehicle, this also means you will be able to secure a more affordable car loan size, with lower monthly payments and the likely ability to pay it off in a lot less time.
Now, while a used car can be more affordable with regards to the above mentioned aspects, sometimes, however, buying new may mean that auto dealers will offer speciality financing options that include a lower interest rate, even at 0% financing for the first few months that apply only to new vehicles.
In the end, the interest rate will depend on a variety of scenarios, such as already mentioned, a borrower’s credit score, whether the car you are buying is new or used.
The Benefit of Buying From a Bad Credit Auto Source
There can be many advantages to looking into buying your ‘new’ car from bad credit auto sources, such as benefiting from them helping to seek out the best interest rates possible.
When it comes down to it, these bad credit specialist typically have established connections with lenders who are more open to providing loans to individuals with bad credit. Therefore, while other lenders may reject these loan requests, these lenders are much more amicable when it comes to these types of borrower circumstances.
As also mentioned, auto credit sources who cater their business around individuals with bad credit, are also more willing to work with them and help them manage their loans. While bad credit borrowers may not necessarily drive away with better interest rates compared to those with stellar credit, they can rely on the expertise of bad credit specialists to find them the best available rates – meaning a lower rate than if they had gone elsewhere.
The Importance of Shopping Around
Now with that being said, not all bad credit auto sources are created alike. With more and more bad credit lenders and sources opening their doors to a wide range of borrowers, it is even more important to shop around for the best rates for you, based on your own credit situation.
Since interest rates are also of critical when it comes to the size of your monthly car payments, researching your car loan options online can be a good method of finding the lowest rate. Many auto credit sources will provide online services that allow you to locate a used (or new) vehicle that you can afford, as well as compare interest rates in the process.
In the end, used car interest rates may not always be lower that those of newer models. However, interest rates need not be astronomical on used cars, and even if you have bad credit, you can still find affordable rates that can set you up for loan success, instead of failure.
After all, you are likely in a position where you want to improve your credit – not derail it. Car loans, even bad credit car loans can help you to rebuild your credit through consistent monthly car loan payments and having an overall lower loan size can be you also have the ability to lower the total credit charges you will be paying over time.
