Used cars are more affordable as compare to new cars but it is not possible to pay the amount at the spot, you still need to get it financed. Luckily, now days you have a lot of options for getting your used vehicle financed. The financing options vary from seller to seller but ultimately depend on your credit rating and income. Here, I am describing few options of financing your vehicle.
Finance through dealer:
There are certain benefits of purchasing a car from the dealer as they offer extended warranties but you should know that they take additional charges for their services. When one is unable to afford all these expenses in one go, you can simply ask the dealer to get your car financed directly or through a credit union nearby. In this way you will not have to empty your pockets in one go. Many dealers have certain income criteria and credit score to finance you rather some also cater their services to high-risk customers. But the difference between the two is of interest rate, for high-risk customers the rate of interest is relatively high. Also, you need to pay a certain down payment to the dealer.
Through banks and credit unions:
Another way of getting your car financed is through credit unions directly even before you find your desired car. Credit union can help you in covering up the whole cost but you need to fulfill a certain eligibility criteria which includes your credit history and monthly income. One of the major benefit of getting a loan from credit union directly is that then you have the liberty to contact a private seller instead of a dealer, this can save you a lot of money because the commission of the dealer is no more there. You can also negotiate on the principal amount and rates.
Do it yourself:
The most difficult but the best option is to save your own money and then buy the car. In this way, you will not have to pay the extra rate of interest or any other financing fees. Also, once you pay you have full authority over the car unlike when getting it financed from a dealer or credit union where you have to pay monthly installments.
Leasing is like a long-term rental agreement where you make the payment every month for the right to use the car. You make the lease agreement for a specific time period and at the end of it you get the rights for purchasing the car for a specific amount which was determined at the starting of lease agreement. It is very good option for people having low budget and not enough money to make the initial down payment. In leasing, you can get a car which you cannot afford to buy a new or used car and also, the monthly installments and down payments are relatively low. But let me also clarify that you end up giving more money as compare to loan. Also, if you are unable to buy the car at the end of the agreement, all your monthly rentals go wasted.