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Do you need car finance for a second hand car?

Getting car finance for a second hand car can be slightly trickier than for a brand new car, simply because the lender will have difficulty in valuing the car without access to its service history.

Getting car finance for a second hand car can be slightly trickier than for a brand new car, simply because the lender will have difficulty in valuing the car without access to its service history.


Looking for finance is easiest online, because it takes the stress out of calling a selection of lenders to enquire about the deals they are currently offering. If you log onto a specialist motoring and car finance website, you could find your car, your finance and your insurance from the comfort of your own armchair!


The issues to look for when you are looking for car finance for a second hand car are the same as those for any loan.


Budget
Of prime importance is setting your budget. Some lenders offer repayment calculators, where you can type in the amount you can afford to repay per month, and the calculator will tell you how much in total you have available to spend.


Deposit
Do you have any savings to put down as a deposit? Don’t panic if you do not. There are still a few 100% finance options out there. However, the bigger deposit you can put down, the better interest rate you are likely to get, as the transaction represents less risk to the lender.


Interest rate and term
Comparing these factors is definitely easiest online. Whilst the actual interest rate the lender will offer you will depend on your credit history, most lenders can tell you what their typical rate is which you can use for comparisons.


Get your finance before you buy
It’s a good idea to organise car finance for a second hand car before you actually choose the vehicle. If you are buying privately, the seller will want to close the deal as soon as possible. He might be reluctant to wait for you to get your affairs in order if he is still getting interest in the car from other parties. Buying a used car from a dealership is different, but it is still worth doing some research into your financing options before you turn up to the showroom. Having a loan in place increases your bargaining position by proving that you are serious about buying the car.

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Back to September 2009

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