Considerations for Financing a Used Car
If you are in the market for a used car that you plan to finance, you have likely determined a few features you are looking for in your new vehicle. Whether your new used car must have a certain size engine, be produced by a particular manufacturer or have an automatic transmission, you probably have some predetermined preferences in mind. With the excitement surrounding the prospect of cruising down the road in your new vehicle any day, do not neglect to find out some important details about financing through the used car dealer with whom you are doing business. Here we examine some simple questions you should ask a used car dealer up front regarding your loan:
-Will my loan be financed in house, or outsourced to a bank or other financial institution? The answer to this question will tell you whether the used car dealer is truly your lender. Dealers who outsource your loan to another entity are serving as a middle man on your loan, and probably charging you a premium for the service. If your loan is financed by a bank, there will likely be multiple inquiries made on your credit, which will negatively affect your credit score. Asking this simple question will also let you know with whom you will be dealing should any questions arise regarding your loan in the future.
-Do you report loans to a credit bureau monthly? Once you determine that your used car dealer will be handling your loan internally, make sure that your timely payments will be reported to a credit bureau. Financing a car is an excellent opportunity to improve your credit score, but that will only happen if the lender is reporting your loan status to a credit bureau.
-How much will my monthly payments be? Before you sign on the dotted line, make sure that your budget allows for the monthly payment amount associated with your loan. Ensuring that your monthly payment amount falls within your budget will prevent financial problems in the future, and allow you to take advantage of the credit boost associated with making your payments on time each month.
In addition to establishing a financing arrangement that will benefit you in the long term, make sure you are investing your hard earned money in a worthy vehicle by checking its background for past accidents, use as a rental car, flooding and other incidents by obtaining the CARFAX report. Reputable dealers will often take this step for you, providing the CARFAX report on any of their vehicles at no cost to you.
About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.
-Will my loan be financed in house, or outsourced to a bank or other financial institution? The answer to this question will tell you whether the used car dealer is truly your lender. Dealers who outsource your loan to another entity are serving as a middle man on your loan, and probably charging you a premium for the service. If your loan is financed by a bank, there will likely be multiple inquiries made on your credit, which will negatively affect your credit score. Asking this simple question will also let you know with whom you will be dealing should any questions arise regarding your loan in the future.
-Do you report loans to a credit bureau monthly? Once you determine that your used car dealer will be handling your loan internally, make sure that your timely payments will be reported to a credit bureau. Financing a car is an excellent opportunity to improve your credit score, but that will only happen if the lender is reporting your loan status to a credit bureau.
-How much will my monthly payments be? Before you sign on the dotted line, make sure that your budget allows for the monthly payment amount associated with your loan. Ensuring that your monthly payment amount falls within your budget will prevent financial problems in the future, and allow you to take advantage of the credit boost associated with making your payments on time each month.
In addition to establishing a financing arrangement that will benefit you in the long term, make sure you are investing your hard earned money in a worthy vehicle by checking its background for past accidents, use as a rental car, flooding and other incidents by obtaining the CARFAX report. Reputable dealers will often take this step for you, providing the CARFAX report on any of their vehicles at no cost to you.
About the Author: Greg Chapman, of Greg Chapman Motors, is a leading used car dealer Austin has depended on since 1959. For more information please visit Greg Chapman Motors.
Labels: buying a used car, car dealership financing, financing a used car, used car financing
posted by Greg Chapman at
1:11 PM
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