subject: What You Need to Know About Second Hand Car Loans [print this page] What You Need to Know About Second Hand Car Loans
Many people who opt for a used car will do so because they do represent good value for money they buy wisely. Finance, on the other hand, can sometimes be a different story. Many people have ended up paying more than they should for second hand car loans simply because they did not have enough knowledge about this type of finance to make the best choices. Knowing how used car loans work will help you get the finance you need at the right price.
Anyone looking to get second hand car loans at the lowest possible rates will have a better chance of doing so if they have some money to put down on their finance. Most lenders will require a 20% down payment on second hand car loans as this ensures that the value of the finance package does not exceed the value of the car itself. While there are some lenders who do offer 100% second hand car loans, having a down payment will allow you to access more lenders who do not offer this option and therefore will enable you to find a loan at a much lower rate.
Most lenders who deal with second hand car loans use a used car loan value when working out the amount they will lend their customers. Many of the larger banks and financial institutions will only lend people up to 80% of the purchase price of the car. Therefore, borrowers will need to provide the additional 20% themselves and this is how the 20% down payment amount is determined.
If you do not have the money needed for a down payment, then do not despair. You can still obtain second hand car loans at reasonable rates but you may need to look beyond the big banks for this finance. There are many smaller non-bank lenders who offer 100% finance on second hand car loans and many of these companies operate online. As they are smaller organizations and have lower overheads, they will often be able to offer you lower rates on these loans.
As with any type of finance, it is important that when you are looking for second hand car loans that you take the time to shop around. When comparing different finance packages offered by the many lenders in the industry it is important that you only compare similar loan products in order to obtain an accurate comparison. If you do not have a 20% down payment and will need to obtain finance for the entire purchase price of your vehicle then you should only compare companies who offer 100% finance options.
Another thing that you will need to take into account when buying a used car is any additional fees and charges that you may be required to pay, such as transfer of ownership. In some cases there may be lenders who will be prepared to add these costs to your finance so that you will not have to find these additional funds after you have purchased your car.
When shopping around for second hand car loans it is a good idea to obtain quotes from a range of different lenders. Looking for your finance online will give you access to your big banks as well as a number of non-bank lenders who offer a great service and well priced finance options.
