How to Get a Used Car Loan

Buying a used car can be a great way to save money on your vehicle. In order to be sure that you're getting a car that will last, you need to do a bit more research when you buy used. You can get a used car loan to finance your purchase almost the same way you'd get one for a new car.

Difficulty: Moderately Easy

Instructions

1. Ask the seller of the used car to pay for a complete checkup of the vehicle. This is more of an issue if you buy from another person rather than a dealership. Make sure that the car is in good working order before you begin the loan search process.

2. View your credit report online at AnnualCreditReport.com (see Resources below). This site is secure and used by the three agencies that provide consumer credit reports. Know exactly what is on your report before you start to shop for a used car loan.

3. Visit different banks and credit unions to find out what your options are for used car loans. Interest rates vary from place to place and your credit rating will play a larger role with some creditors.

4. Discuss your options for getting a person to person car loan if you're buying from an individual. This type of loan allows you to pay for the car completely and then repay the lender with monthly installments. Some credit institutions charge higher rates for these loans.

5. Get an extended warranty for your used car. You also need to look around for the best prices on the warranty. Watch out for used car dealers that charge a high fee for a warranty.

Tips & Warnings

• You may want to get special insurance to cover the difference between the car value and your loan amount. This insurance will help you pay back your used car loan if something happens to the vehicle and the insurance value is less than the loan amount.
• Keep the lifetime of your used car loan low so that the car hopefully outlives the loan.
• Always test drive and inspect a used car before buying it. Have an independent third party examine it for any potential problems.

Resources

• Credit reports online at AnnualCreditReport.com