Introduction
Used car finance refers to the business of lending money to people who want to buy an old vehicle. The cars are usually sold by dealerships and some honest car salesmen provide financing themselves. These vehicles typically have a higher value than many others in the used market and are less popular with buyers. They can be a great opportunity for someone looking for a used car but cannot afford the full cost at once or needs low monthly payments.
The benefits of Used Car Finance
1) No down payment
There is no need to put down a deposit with most of the providers of this finance. This can be particularly useful for customers who do not have a lot of money available for a deposit.
2) Longer repayment period
The repayment period offered can be up to 84 months. This makes it easier to choose long-term financing, which has lower monthly installment rates. It also makes it easier to compare financing options between different companies and different types of vehicles.
3) Flexibility
Used Car Finance allows you the flexibility to pay off your loan earlier if you can afford it and they may even provide a discount if you do so, but they are unlikely to force you to stay until the end of the term.
4) Attractive interest rates
Interest rates are lower than on new cars and some people can get a loan with an interest rate as low as 1%.
5) It can be easier to remove the Finance
You may be able to change your vehicle early, although there is often a penalty for doing so. You should always check the terms of your contract before signing up for finance. It is particularly important for anyone buying a used vehicle with high miles or more than 3-4 years old. In this case, Shop around for finance as you might find it more affordable elsewhere.
Conclusion
Used Car Finance can be a valuable option for many people looking for low-cost financing but you should always make sure that you fully understand the terms and conditions of any finance offer that you are being given.