If you're getting ready to embark on a used-car buying quest, it can be an exciting event in your life. Having the perfect mode of transportation can make things a whole lot easier when your car fits the needs of your lifestyle. While you may have a general idea of what type of car or truck you wish to buy, there are still a lot of factors that go into closing the deal. Here are a few things that you should consider before buying your next used car.
Before you have to sign the dotted line to car ownership, you'll have to know exactly how you'll finance your vehicle. Getting pre-approved for a used auto loan gives you an advantage before you step foot into the dealership. It's important to visit your local bank or credit union to set up an appointment to discuss your finance options.
You'll need to bring:
- Your recent pay stubs and W-2's for your current and last year of employment
- Employment verification
- Driver's license
- Down payment amount
- Monthly household budget
Your lender will also run your credit report as well as your FICO or credit score. If your credit report has good feedback and your credit score is high, you should have no problem getting approved. If you're having trouble getting financed, ask your salesperson if they work directly with lenders who approve clients with a blemished credit history.
Research Average Pricing
Before you buy a used car, be sure you go into the dealership knowing how much you can spend. From there, be sure to check online to check the base value of the vehicle you're planning to buy. Keep in mind that when you search, you need to compare average base pricing using several options, such as:
- Year of vehicle
- Overall condition of the vehicle
- Demographic location
All of these factors come into play with a used car's value. Keep these things in consideration as you embark upon a car that you may wish to purchase.
Have Some Cash on Hand
Be sure to have some cash to put down on your new vehicle loan. This will adjust what your monthly payment will be and how the bank will determine your interest rate and length of the loan. Most lenders like at least 10 percent of the cost of the vehicle. If you have a vehicle to trade in, you may be able to put less money down to satisfy the underwriters of the loan and reduce the amount you owe.
Know Your Insurance Rates
Call your insurance company prior to going to the dealership. Request a quote for the vehicle and specify what type of coverage you'll need to satisfy your lender. Rates can be somewhat higher for used cars that have a lien attached. If you have good driving history and a reasonable credit score, your quote should be affordable.
There are a lot of things to keep in mind before you pick out the perfect used car. Having all of your ducks in a row will ensure that the entire car buying process is a smooth one.