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3 Helpful Used Car Financing Tips

Michael Jones

Auto Loan Expert

Everyone knows that financing anything can be a complicated nightmare, and financing a used car is no different. However, there are a few ways that you can make the process easier, and even to help work it to your advantage. We’ve put together these three helpful tips on used car financing to help ease the pain.


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One of the best way to get a leg up on used car loans rates is to pre-qualify. By providing lenders with some basic information they will produce a minimum and maximum range for your loan and interest rate, or can tell you if you should look elsewhere for a loan. Pre-qualifying with different lends can help you get the best used car loan rates because you can compare different pre-qualification offers from different banks. This is also a useful strategy if you’re looking to refinance your used car loan.

Another advantage to pre-qualification is that you can shop for used car loans for bad credit. Oftentimes people with bad credit are offered high interest rates on loans, and have to worry about whether or not they’ll be approved for a loan. Getting turned down from a loan with an actual application can hurt your credit score even further because it counts as a “hard” credit check. Hard credit checks are factored into you score, and the more of them you have the lower your score will be. Pre-qualification doesn’t count as a hard check, and so doesn’t affect your credit store, this can be a boon for those who are unsure if their credit is good enough for a loan, but don’t want to risk it further.

Cheaper Isn’t Less Expensive

Something else to consider is that a cheaper car might not actually be less expensive. This is because the bank assigns interest rates based on risk, and part of the risk mitigation is the fact that the bank can seize and sell your car if you default. Therefore, lenders will frequently offer lower interest rates on newer used cars than they will on older ones.

This difference in interest rates between a newer and older used car can be more than enough to make the total cost of your loan greater for an older car than a newer one. Make sure you check all your options so that you don’t wind up paying more for an older car.

Balancing Term Length vs Interest Rates

Sometimes people ask “Can you get a used car loan for 72 months?” The answer is yes, but it might not be in your best interest to do so. The longer the term on your loan, the less each monthly payment is. However, longer loans also accumulate more interest, and so they end up costing more. This means in the end you’ll save more money by paying a higher amount each month on a shorter loan than you would paying a lesser amount each month on a longer loan.


However, you shouldn’t max out your budget to pay your car loan off as soon as possible. Make sure your bill is as much as you can pay while still saving some money, that way you won’t be in a difficult situation in the event of an unforeseen expense or emergency, creating even more debt at an even higher interest rate if you have to take out a personal loan or used credit cards. Balancing your payments will allow you to reap the most out of your used car loan while still letting you pay it off as fast as possible.


As you can see, there are a number of ways to get an advantage when financing a used car. It is important to keep in mind that there are a number of moving parts, so changing one will alter the rest. Try to play around with different pre-qualification options to get a better idea what kind of loan you can get for the cars you’re looking at, make sure that you’re not paying more for an older car, and don’t let your term length be longer than it has to be, and you’ll find yourself breezing through the financing step and driving home in the used car of your dreams in no time.