If you’re in the market for a new car and you’re on a tight budget, financing may seem like the better option for you. However, there are plenty of things to consider before you make a decision on whether to buy new or used and, if you pick used, whether to finance it or buy it outright.
Financing a used car will have lower initial costs, but it doesn’t necessarily mean the costs will be less overall. Lenders consider used cars to be higher risk than new ones, so they often give shorter loan terms and higher interest rates. This means you pay a higher monthly payment and you pay more over the entire length of your loan.
The easiest way to avoid this is to talk to banks in advance whom you already have an established relationship with instead of letting the dealership find a loan for you. If you can get a loan through your bank or a bank who already knows you have a solid history of making payments on time, you may be able to get a longer loan term even for a riskier loan on a used car.
You can also check out dealership certified pre-owned programs, which will get better loan offers because they meet certain qualifications and are inspected and repaired so they’re like new. These easy options will help you save on costs, get a better deal, and avoid being taken advantage of at the dealership. Find out our used car financing options at Mountaineer Mitsubishi today.by