Are you interested in purchasing your first car or a new car, but you are concerned about the cost? Maybe you are uncertain whether or not you will qualify for used car financing or loans. Perhaps you are not sure what budget you should allocate to your car or if your credit score is high enough to qualify you to purchase a car. Whatever the reason, it is always important to do your research and head into the used car dealership before making your final decision. If you do not at least try to visit a used car dealer to apply for used car financing, you will not know whether or not you can qualify.
Interested in learning more about your options for purchasing used cars and receiving financing and loans? Keep reading to learn about some of your options for used car financing and how to afford a used car.
There are millions and millions of cars currently on the roads in the United States. In fact, there are nearly 253 million cars that were driven in the United States during 2014 alone. With all of these cars being driven around, you would probably be surprised at how many of them are used cars that have been passed from one owner to another over the years. Every single year, more used cars are purchased from dealerships. Around 40 million cars change ownership through private sellers or dealerships throughout any given year in the United States.
Due to the high frequency at which cars are traded in and sold to other people through private deals or dealerships, it is no surprise that most cars have around three different owners before they stop operating. It just makes sense to continue to sell a car rather than just getting rid of it when you are done with it. That way, once it no longer suits your needs, it can change ownership to someone who needs it. On average, you can get a solid 11.4 years out of a car before it becomes too much of a nuisance to continue to maintain and repair so that it will run properly, according to an IHS automotive study.
So, why do so many people turn towards purchasing a used car and used car financing over buying a brand new car at a dealership? The most obvious answer is that it is generally cheaper and more affordable to purchase a used car instead of a new one. In addition, a used car may have financing plans that are more suited to your budget. Depending on factors like your credit score and your income, you may be able to apply for used car financing that allows you to pay off your used car quicker and more efficiently than if you purchased a new car.
Since around 43 percent of people who own a car decide to finance it rather than paying it off right away, it makes sense that people want to find the best financing plan every time. Whether their credit score is lower than they want it to be or their income is not very high, determining a budget and finding a finance plan that works is crucial. To give you a general idea of a credit score that can help you get the financing you need, on average a credit score of 655 was needed to receive used car financing in 2016.
By applying for used car financing, you can also improve your credit score over the years. Each time you make a payment on time, there is a chance it can positively impact your credit score in the long run. Make sure you do not make any late payments, though, as this can have an adverse effect on your credit score, too.
Have you ever purchased a used car or a used truck from a dealership? Did you apply for and receive used car financing and a loan? Did it help improve your credit score over time? Let us know about your experience in the comments.