What You Need to Know -- and Do -- Before Applying For a Used Car Loan at an Independent Dealership

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If it's time to buy a used car at last, there are several ways that you can prepare. You may have decided to work with an independent dealership because they offer easier financing than the larger financing companies or auto dealerships. Whilst easier used car finance is always a benefit, independent dealerships can work differently. Here's what you need to know -- and what you need to do -- before visiting the independent dealership to secure your used car loan. 

Educate Yourself About Financing Terms

Many independent car dealerships handle their own financing, and this means that their terms are quite different than those of larger dealerships or banks. Phone ahead to ask the independent dealership where you'll be buying some key questions about their auto loans, including: 

• How long are used car loan repayment terms? When financing a used car from an independent dealer, your loan term may be shorter -- for example, three years as opposed to as much as seven years with a new car at a larger dealership.
• What is the range of percentage rates offered for used car loans? The dealership may have a set percentage rate for all loans, but they're likely to have a range of percentage rates based on your qualifications for the loan.
• Is a down payment required? In many cases, you'll need to have a down payment so make sure you know exactly how much you'll need if so. Ask whether you need to bring cash or if a cheque is acceptable for the down payment. 

Prepare the Information You'll Need to Bring Along

Your independent car dealership may not perform a credit check, but that doesn't mean that they don't need to check on your income and finances. You'll need to bring along the following when applying for a used car loan at most independent car dealerships. 

• Your most recent pay cheque stubs: collect your three most recent pay cheque stubs (or a print out of your most recent direct deposit from your employer) to prove your income.
• Your cheque book: many independent dealerships ask that you make your car payments through direct debit from your bank account, so you'll need a blank cheque for this.
• Your references: many independent used car dealers may ask for references. Have the names, addresses, and mobile contact numbers of several friends who would be willing to vouch for your financial responsibility on hand.

Ready to get your "new to you" car? If you prepare by using the easy tips above, you'll be enjoying a new ride before you know it!

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21 February 2018