Best Ways to Finance a Used Car

Our guide to making sure you get the best deal

used car for sale

We see the ads on the television all the time for shiny new cars, but not everyone can afford the latest and greatest.

Buying a used car also gives you the opportunity to perhaps get a better-optioned car, or one from a more prestigious brand, but for less money.

And we all know that a new car will drop significantly in value as soon as you drive out the dealership, so why do that?

Regardless of your ‘why’, you need to make sure you sort out your ‘how’ before you go flicking through the used car classifieds, or hitting ‘auto alley’.

As we know, when buying something second-hand, or if you prefer ‘pre-loved’, you need to be just that little bit more careful, especially with a big investment like a car.

That means making sure you’re getting exactly what you’re paying for, and that the vehicle is going to be a wise investment.

Financing options also need to be closely examined before you put pen to paper.

Don’t be blasé because you’re borrowing less money

Sure, you might be saving thousands off the new car price, or you might only be borrowing a small amount to fund your car purchase, but you shouldn’t be in a rush to choose either your new set of wheels, or how you’re going to finance your car.

Make sure you’re getting the best possible interest rate, check the terms – including early payout penalties, and don’t forget to look at how much more interest you might be paying by extending the loan out further than perhaps just a couple of years.

An online car loan calculator can help you work out exactly what your repayments are going to be.

Factor in unforeseen extras

When you’re working out your repayments, make sure you factor in expected, and potentially unexpected extra car maintenance/repair charges.

Remember, when buying a used car, you might not be getting the reassurance of a factory-backed warranty (like what you would get with a new/newer car).

So, make sure you budget enough money above your monthly loan payment to cover things like clutch repairs, air-conditioning re-gas, battery replacement, as well as regular servicing, tyres etc.

Shop Around

Perhaps the best choice for you could be getting a used car loan via the dealership but are you short changing yourself?

Before you go for any test-drives, talk to other credit providers, get their terms and work out exactly how much money you have to spend.

That way you will be able to go searching for your new set of wheels with a fixed budget, this could even help you drive a much better deal when it comes to negotiating a price.

A reputable credit provider such as NRMA will be able to give you a pre-approval and using your own finance company shouldn’t prolong the car buying exercise by any significant amount of time.

Summing it up; by all means, save the dollars and find a quality, looked-after used car that will give you many years of dependable service.

The right car finance package for you and your new set of wheels can be the icing on the cake.

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