Purchasing a used car with a loan is very similar to using a loan to purchase a new car. The main difference is that many used car dealers are able to provide financing for people who present a higher credit risk. If you have been thinking about a used car loan, the following FAQ may help you make a more informed decision.
Is it More Expensive to Finance through a Dealer?
Direct dealer financing usually carries a higher interest rate than financing through a lending institution. Borrowing from the dealership is not always the most stable way to finance a car, either. If the dealership should close or relocate while you are still paying off your loan, your loan may be transferred to a different lending institution with different regulations. It is also difficult to refinance a loan held through a dealership.
Recent Comments