Used Car Loans
If you are someone who watches regular television, then you surely would have seen some advertisements which feature car dealerships who buy and sell used cars after refurbishing them. There are indeed some benefits you can reap. The used car market is always booming because not everyone can afford to buy brand new cars. According to a recent survey which gave us a ratio, there is one used car to every 2 cars on the road. Another survey tells us that for every 100 news cards sold, there are 220 pre-owned cars that come into the market to be sold again. The used car loan process is very different when compared to paying cash for christmas loans.
One of the main reasons the growth is reduced ownership periods. People are now treating their cars like their phones; they upgrade as soon as new technologies are released into the market. This is good news to those who cannot afford a new car; they can get a car that is still running in the prime of its usable life span. Banks will expect a certain amount of the estimated value of the car to be paid as a down payment. Interest rates on used cars have proven to be a tad higher than new car loans because there can be a lot of risks for fraud in this market. Used car loans are currently ranging between 11-17% and this number surely depends on a number of factors. New car loans start only at 7%.
The decision of tenure for the loan can indeed be a tricky subject. The car in focus may have been used many years before. Therefore tenures usually depend on the quality of the car when it is being sold on the second-hand market. Most of these issues are completely subjective. Some lenders actually limit the used car tenures until a certain amount years, most of the times this number would be 7 years. Exactly like most other kinds of loans, your credit score plays a huge role. An asset of yours generally backs used car loans. Even though this is the case, if the credit score is not up to the mark, the loan sanctioning process may get trying.
The process may take a little longer when compared to getting a loan for a new car. This is because the valuation and verification processes of the car may take some time. While purchasing a used car, you need to buy it from a well-known dealer who has good reviews, one who can assure you the quality and one who would love to give you a warranty on the vehicle. A used car loan has just a few differences to an actual car loan, but these differences have been proven to be important ones.