Used Car Finance is Better Than New Car Finance – Here's Why

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By CraigNewby

Used car finance is a step up process to gaining your shiny new car. If you’re suffering from a bad credit rating you may find it difficult to get yourself started on the ladder to the car of your dreams. It can seem like the whole world is against you when you don’t have the sufficient credit rating to secure yourself any loans or other finance. Used car finance can help you raise your credit rating to a healthier level and can be a vital step upwards to getting your hands on a new car.

Buying a used car that is only one to three years old is a much better option than buying a brand new one and that is because of one major factor: depreciation. A used car which only two years old will be anything from twenty to fifty percent less than a brand new model. The key here is to shop around and find the best deal that you can. The used car will still be under warranty so you have peace of mind plus in most cases it will look like new.

Choosing used car finance over a new car purchase will also significantly increase your chances of acquiring the finance. This is because the amount will be smaller so you have a better chance of being able to pay back the loan to the finance company. Many finance companies will actively promote used car deals in order to acquire more business from people with a poor credit rating. In fact, they receive more business from people with low credit ratings than anyone else. A used car deal will therefore be much easier to obtain than trying to go for a new vehicle straight away.

Buying a used car has another bonus for you besides making it easier to obtain a car; it also helps to make your credit rating a bit healthier. As the finance is for a smaller amount it becomes more manageable and while you’re paying for your car, your credit rating gets healed somewhat. Once you have completed paying off your vehicle from used car finance your credit rating will be looking much better which will help you when applying for everything from a credit card to a mortgage.

On top of this there are various offers and schemes your car dealership will be able to provide for people with low credit ratings such as a trade in. Many places now offer you the choice of using your old car as part payment for your new one. The value of this sum will depend on the estimated value of your old car but this will decrease your required loan for the new car. This in turn makes it easier for you obtain a better or newer vehicle allowing you to climb that financial ladder more easily to the car of your dreams.

In summary, a used car finance loan will not get you a new car straight away, but if you need a car quickly or simply cannot get your hands on a new car loan this is the best option for you. Used car finance can help improve your credit rating, provide you with a cheaper car, improve your chances of getting a larger car loan and help you get a cheaper loan for a better car later on. Just because you have a poor credit rating, doesn’t mean you should suffer financially for the rest of your life. You can get a foot hold on the vehicle ladder today by having a quick look online for used car finance deals.