Q:

How do you finance a used car?

A:

Quick Answer

Before looking for financing for a used car, take time for introspection to determine what you can afford and gather the necessary paperwork. Determine if you should seek financing through a dealer, bank or credit union before shopping for the car, and select the best car you can afford.

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Full Answer

  1. Prepare before seeking a loan

    Look at your current income and bills. Determine what you can spend for a car and what you have for a down payment. Making these decisions beforehand may lessen pressure at the dealership.

  2. Gather the appropriate paperwork

    While lenders vary on what they require, most want to see proof of residence and income. Gather your pay stubs and most recent utility bill.

  3. Determine where to apply for a loan

    Credit unions and banks usually offer better rates than dealers for used cars. However, they often have strict guidelines for approval. If you have good credit, apply for the loan through one of these institutions before shopping for the used car.

  4. Shop for the vehicle

    Take time to test drive the vehicle and have it checked by a trusted mechanic. If it is not mechanically sound, be willing to continue shopping to find the best car for your money.

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