Can you get a loan for a used car?
Posted on April 17, 2019
Car loans are a hot topic right now and with good reason. With the economy on the up, more people in employment than ever before and more lenders willing to lend, it’s a good time to be in the market for a car. If you’re after certified used rather than new, can you still get a car loan on it?
You can get a car loan but it may not be your best option.
Car loans are assessed partly on your circumstances and party on the value of the car. It is much easier to assess the value of a new car as it has an MRP, Manufacturer’s Recommended Price, and a specific market value.
It is much more difficult to asses the value of a used car. A dealer can give an estimate but the mileage, condition, trim level, optional extras, service history and all kinds of things go into creating a used car value. Not all lenders are able to work with those.
If you’re dealing direct with a dealership, many lenders will accept the dealer’s valuation and offer a loan based on that. If you don’t want to use dealer credit options, you may have difficulty agreeing a value.
If you’re buying a used car from a dealer that participates in a certified used program, you may be able to access finance through the dealer or through the manufacturer. Certified used carries a lot more weight with lenders as the car has had a much more involved assessment and comes with guarantees for quality and condition.
We would always suggest using dealer finance options for car purchases but you don’t have to take our advice. You may be better off applying for a personal loan for the amount and paying cash to the dealer. This has the added benefit of strengthening your bargaining position as you will essentially be paying cash.
The downside of personal loans is that they can be more expensive than car loans. You will need to shop around for some good deals to beat some of the finance options Car Nation Canada can offer.
It is definitely possible to get a car loan for a used vehicle but can be more problematic. Car Nation Canada operates a certified used scheme and works with a range of lenders who provide great value finance for all situations. Contact us if you would like to know more!