Get a Used Car with Bad Credit Get a Used Car with Bad Credit

Getting a Used Car with bad Credit

Used cars are generally preferred now-a-days by the middle class families. This ensures lower prices and reasonable quality. Now it is a horrendous task to obtain used car loans with many banks and lenders willing to give it at low interest rates. But the financing in used cars is often tougher to obtain than new car.

How to get a used car with bad credit? It is almost impossible to get loans from banks if you have a bad credit. Thus you have to seek the help of local dealers or lenders. The process is almost the same as in a bank but the rates might be a little high. But after this loan is paid off the credit history can be improved that might be important for loans later.

What are basic characteristics of used car loans that make it different form new car loans?

  1. 1.       Cost of the Car: Cost of the car can be an issue as there is no MSRP. Thus fixing the cost and agreement between the dealer and the consumer might take some time. Also the condition of the car might affect the pricing. So the car should be thoroughly checked before the pricing is decided.
  2. 2.      Age of the Car: In the case of new cars any model of a new car is easily financed. But in the context of used cars the age is an important factor. The age decides if the car is loan worthy.
  3. 3.      Model: The car model is also important. If the car model is old and out of fashion, it has lesser chances of getting car loan.
  4. 4.      Tenure of Loan: Most of the lenders also check the period of the loan. So a high initial payment is generally required. Many of them consider the period of the loan along with the age and then make decisions. Generally the period of the loan and the age together is seen not to be more than seven years. Thus if the car is one year old the period could extend up to six years and if the age is more the period of loan less. The policies differ based on the point of view of different lenders but the total is always seen to be about seven years generally.
  5. 5.      Determination of interest rates: If you approach a bank, the bank usually sends a evaluation expert who comes with you to estimate the cost according to them. In the case of private or other cooperate loans also the same procedure is followed.  This is decided by the number of miles it has run, condition of the car and model of the car. It is on the basis of this evaluation that the bank or the company lends loans. Thus if the value of a car is decided as 2 (X) by the expert then about 1.3-1.4 (X) can be expected as loan.

Some companies have tie ups with specific dealers that give up to 80 per cent of the value of the car as loans. Following the tips as outlined here will help you get a used car even with bad credit…But if you want to make it even easier call Car Credit Headquarters today and let us do the work for you!