Two Payment Options for Used Cars

November 2, 2014

Two Payment Options for Used Cars

Either one of these options might be the right choice for you. What are your payment options now that you have found a previously owned automobile that you would like to purchase? There are two payment choices available to the consumer purchasing used cars: financing and full up-front payment. You will have to determine where your finances are and whether or not one option is clearly better for you. But remember to keep in mind that a lot of what we are about to go over depends on your credit rating we will fully explore both payment options below. This is just a basic outline for interested consumers

Full Payment
This is the best way to buy used car but if you can do so comfortably, there are a number of financial considerations you will have to take into account before you drop a large lump sums Unfortunately, depending on the price of the vehicle, this may not be an option for you. If you have a comfortable amount of money in your savings account, you could try to buy it in full. This is the cheaper of the two options, if that makes sense.

Even if you have enough cash to purchase up-front, this may not be the right choice for you if the purchase will engulf all or most of your cash. But the overall total will be far less you will have to pay a larger amount at the onset.

Financing
You may wonder why anyone would choose this option. You probably still need to get a vehicle just to accomplish your daily tasks if you can't afford to fully purchase a vehicle. Let's go over some important things you should keep in mind when financing used cars Financing used cars makes them more expensive in the long run because you have to make interest payments on top of the total price of the automobile. Financing options allow consumers to make little payments over a certain period of time.
  • Your initial down payment on the automobile will result in a lower APR and a shorter financing period. It is wise to put down as much money as you comfortably can up-front. The more you initially spend, the more you will save over time.
  • The length of your leasing term is another important aspect to look at. The longer the term, the lower your payments will be, but you will also be more likely to spend more money on interest payments. If you can afford higher monthly payments, it is probably best to shoot for a shorter period.
  • Your APR or Annual Percentage Rate represents the figure of your total accumulated interest as projected over a calendar year. The APR is generally higher and the financing term generally shorter when dealing with used cars as compared to new automobiles.
  • You can find financing at banking and credit institutions, but most people now just finance through their dealerships. If you choose to finance through your dealership, they will probably end up selling your debt to a financial institution or creditor, but you will have the convenience of taking care of everything in one spot.