Buying a pre-owned car can be a great way to save money while still enjoying a vehicle that's new to you. Although the lower price tag on used cars often means it’s easier to buy them without financing, this isn’t always the best option. In some cases, it can make more sense to get a loan and pay the vehicle off over two, three, or five years. Use this guide to help you determine whether an auto loan makes sense for you and how you can secure one.

What Are the Benefits of Financing a Pre-Owned Car?

If you don’t have a few extra thousand dollars at your disposal, making payments on a pre-owned car is better than emptying out your savings account. In many instances, these vehicles often have much lower down payment requirements, varying between 0% and 20%. The annual percentage rate (APR) also tends to be much more reasonable, and even individuals with poor credit can secure lower interest rates.

If you do have bad-to-poor credit, financing and making payments on time can help you improve your rating. When the vehicle is paid off, your higher score can help you land better loan deals for buying a new car, house, or other important purchases.

How Can I Finance a Pre-Owned Car?

Before you’re ready to buy a used car, get pre-approved for an auto loan. Having this approval beforehand helps you set your budget since you'll have a better idea of what term limit and interest rate to expect. 

With the pre-approved loan amount in mind, begin researching vehicles within your budget and saving for a down payment. It’s also a good idea to have cash available to pay for the dealer fees, title and registration, and sales tax instead of rolling them into the loan.

When you have a down payment in hand and have selected the car, check your credit score and begin shopping for finance quotes. Compare the loan amounts, term length, and APR offered by each institution. Ideally, look for shorter term lengths to reduce how much extra you have to pay in interest. If you have poor credit, consider adding a cosigner to reduce the interest rate and minimize monthly payments.

If you are looking for a used car, visit Pat Kaiser’s Christiansen Motors Inc. in Audubon, IA. This Chevy® dealer has a large selection of certified pre-owned cars, trucks, crossovers, and SUVs. They also carry the latest GM® models and offer financing options. Get a quick quote or pre-qualify for a loan today by visiting their website. You can also call (712) 563-4241 to speak with one of their associates about viewing or test-driving their available models.