Benefits of Buying a Used Car

stopcurbstoning.com

There are many good reasons to buy a used car, including ample selection and the improving reliability of older cars, but the big draw for used-car buyers? Affordability.

Price

Buying a new car is definitely more expensive than buying a used one. Unless you decide to lease, your initial costs on a new car will be hefty. Financial institutions typically require down payments of at least 10 percent on a new-car loan (but it helps to add more). If you pay less money upfront, your monthly payment will be higher. Two other key considerations may tip the balance in favor of used cars: certification programs and new-car depreciation.

Certification Programs

One trend that makes buying used a better option is the proliferation of certified pre-owned programs. The idea started with luxury brands such as Lexus and Mercedes-Benz. Today, most manufacturers have instituted these programs.

General benefits of CPO cars include:

• Manufacturers usually consider only late-model, relatively low-mileage used cars and trucks with no history of major damage for their certification programs.
• CPO vehicles undergo a rigid inspection process of mechanical and cosmetic items before they obtain certification.
• CPO vehicles are normally covered by a warranty that extends beyond the original factory warranty. The warranty often includes the same features as a new-vehicle warranty, such as roadside assistance.
• Several manufacturers offer special financing on CPO vehicles, usually at lower rates than those on new-car loans or the typical, higher used-car loan rates.

Buyers should be aware that they pay more for a CPO car than for a typical used car, but the higher price should be worth it for the extra attention, coverage and the peace of mind buyers receive.

Avoiding Depreciation

Once you drive your new car off the dealership lot, its value will drop immediately in your early years of ownership. On mainstream vehicles, expect your new car to lose at least 30 percent of its value in the first two years of ownership. Consult used-car value guides to get an idea of what a particular model will be worth in the future. Leasing guides are another good source, even if you intend to buy instead. Lease payments are calculated based on residual, or resale, values.

H/T Source: Cars.com

Tips on Getting a Used Auto Loan with Bad Credit

More and more people are coming to realize the benefits of buying a used car. If you’ve decided the same, you have definitely made a smart decision. The fact of the matter is you can purchase a car that is almost as good as a brand-new one and save up to 50% off the original price. Even cars less than two years old can be up to 30% cheaper than new cars.

Obviously, there are other reasons to buy a used car: save money on insurance, certified used cars are available, traceable history, and typically a less stressful negotiation process. In order to buy used cars, many drivers choose to apply for a used auto loan. However, there is one thing that might prevent them from buying the car of their dreams – bad credit. With a bad credit, your options as a potential buyer are greatly limited, as most banks and traditional finance companies prefer to help out only those with a good credit score.

The good news is that Wayne Westland Federal Credit Union can help you finance your next car purchase. Here, you can easily apply for a loan and get the best deals. If you also get pre-approved, you have even more chances to find a great deal. In order to buy a used car with bad credit and save as much as possible, there are some things you can do.

Optimize your Credit Score

First of all, you can take some practical steps to improve your credit score. Order your credit reports from all three credit bureaus: Equifax, TransUnion and Experian. Next, verify that all information is accurate. It is not unusual for these credit agencies to make mistakes that could hurt your credit rating. Additionally, make sure to pay off small judgments and past-due accounts. Nothing can impact your credit score more than nominal reports. Lastly, ensure that you wait at least 6 months after cleaning up your credit report before applying for your loan.

Prepare a Budget

Another practical step you can do to get the best deal on a used auto loan is to set up a budget. List all your expenses and revenues and then compare these two. This way, you will know whether you can afford a loan. Otherwise, you might endanger yourself and your credit.

Save For a Down Payment

If you have bad credit, it is quite difficult to get a loan approved. However, if you can put down at least 10% of the car’s value, you might get a much better deal.

Negotiate the Price

Once you find a nice used car that meets your needs, sit down with the manager or with the salesperson and negotiate the price. If you are good at negotiating, you just might save up to 10% of the original price.

The Bottom Line

Used auto loans are becoming increasingly popular nowadays. If you live, work, or worhsip in Westland or Wayne, MI, and you need a used auto loan for your next purchase, do not hesitate to contact Wayne Westland Federal Credit Union.