Purchasing a used Honda is a great way to save money on a quality vehicle. While many people choose to pay cash for used vehicles, it’s important to know that you do have other options for financing the purchase. While leasing a used vehicle is not as common, there are many options for loans that can be obtained to finance a used car. Here are a few options available to finance your next used vehicle.
GET A DIRECT LOAN
One of the best ways to finance a used vehicle purchase is to get a loan directly from a bank or other financial lending institute. You’ll have many options available and you’ll be able to shop around for the best loan terms and interest rates. But before you go and apply for a loan, here are a few steps to take to be fully prepared.
GET YOUR CREDIT REPORT
To get the best deal on a loan, it is essential that you know your personal credit score. The lender you choose to apply with will pull your credit history report, but it’s important that you know your credit score before you step foot into their office.
By knowing your credit score and history, you’ll know what sort of loans and rates you’ll qualify for, and you’ll have a better chance at getting the loan you deserve. You can obtain your free annual credit report from one of the recognized credit reporting bureaus, or your can get your FICO score for about $20.
CONTACT YOUR LOCAL BANKS & RESEARCH LOAN OPTIONS
If the vehicle you’d like to purchase is less than 5 years old, you’ll generally be able to find loans that offer 5 year terms. If the vehicle is more than 5 years old, you’ll usually only qualify for 1-2 year loans. It is also very common for lenders to only provide financing for vehicle with less than 100,000Km on the odometer. Lenders usually only finance cars purchased through authorized franchise dealership, not independent dealerships.
Call around to your local banks or other lenders to find out what loans they offer. One of the benefits of a direct loan is that you can shop around until you find the loan option that best suits you.
GATHER INFO ABOUT THE CAR YOU’D LIKE TO PURCHASE
When you find bank or lender that offers some good financing options, take some time to compile all the pertinent information about the vehicle you’d like to purchase. Your lender will need to see this information in order to qualify you for a loan. Here’s the information you’ll need to provide:
- Vehicle Identification Number (VIN)
- Number of Kilometer on the Odometer
- Vehicle History Report (CarProof™)
- Sales contracts and any other information about warranties or service agreements
Getting a direct loan could be a great option for you, but let’s look at another option.
Often times when you shop for a used vehicle through an Authorized Honda Dealership, you’ll be able to obtain financing for your vehicle directly through the dealership’s finance department. At Orangeville Honda, our finance team helps many people every day get great deals on financing for all types of used Honda vehicles.
APPLYING FOR A LOAN DIRECTLY THROUGH A DEALERSHIP
There are a couple of big benefits to obtaining financing through the dealership you’re purchasing your vehicle from:
- They know their car inside and out, so you won’t need to take as much time gathering information about the vehicle.
- Dealerships will typically provide financing for any car they sell, without the age or mileage restrictions that banks put on car loans.
However, you can usually expect slightly higher rates when financing through a dealership. But, if the vehicle you want buy is more than 5 years old or has more than 100,000Km on it, there’s a good chance you’ll get a loan for the vehicle through the dealership.
When you shop for a used car at Orangeville Honda, our friendly staff will be there with you every step of the way from vehicle selection all the way through finding you the perfect loan solution. We know the cars we sell thoroughly, inside and out, which makes getting a loan through our finance department quick, easy and simple.
Now before you come into to our dealership to find that perfect used Honda for you and your family, consider these tips to help you in through the process.
RESEARCH COMPETITIVE RATES BASED ON YOUR CREDIT SCORE
Like we mentioned before, knowing your credit score before you go in to apply for a loan will give you significant advantage when it comes to getting the best loan you deserve. Before you go into a dealership to apply for a loan, take some time to research competitive loan terms and interest rates based on your credit score.
This way you’ll be able to gauge whether or not the loan offer your dealership is giving you is fair. Equipping yourself with this knowledge will go a long ways in helping you get an ideal loan for your next used vehicle.
At Orangeville Honda, we work hard to sincerely deliver our customers the best rates. We won’t stop working until our customers are completely satisfied.
PREPARE YOUR DOWN PAYMENT
When you apply for a loan, you need to be prepared to put down a decent down payment. Ideally you should aim to put down at least 10% of the vehicles total price, with 20% down being optimal.
Generally, the higher the down payment, the lower the monthly payments and interest rates. Providing a good down payment on your used car loan will help you qualify for the loan as well as reduce the risk of being “upside-down” on your vehicle.