The Ultimate Guide to Used Car Loans
If you’re looking for your next car, but you can’t afford or don’t want to buy one that’s brand new, you may consider getting a second hand car. Used cars can be a great option with huge reductions on the price you’d pay for a new vehicle, and deals made directly with private individuals rather than dealerships.
Whatever the cost of your used car, you may need to consider getting a used car loan. We can help advise on the best used car loans available to you – offering our experience from decades working within the car loan industry.
We’ll help you to find the best interest rates and the lowest fees available for your used car loan so contact us today and start the car loan process.
What is a used car loan?
A used car loan is a secured loan which must be used for the purchase of a used car. With a used car loan you have two options:
- You can apply for your loan first and get pre-approval so you know how much you can spend on a used car
- You can find a used car you want to buy and then apply for the loan.
Generally used car loans can be anywhere between $2,000 and $70,000 – giving you a fair amount of flexibility when it comes to choosing the vehicle you want to buy. You’ll also need to agree with your lender the loan term and find out whether they have restrictions on the age of the used car that you’re looking to buy.
Why would you choose a used car loan?
Most people who choose a used car loan want to purchase a used car but do not have the full amount of money required by the seller. By getting a used car loan, they can pay back the amount owed (often the full purchase price minus the deposit they have put down) over an agreed loan term.
If you’re unsure whether you should choose a used car loan, feel free to contact us via a form or call us on 1300 722 210 for an obligation free discussion about your individual needs and circumstances.
What are the risks?
Buying a used car can be more risky than buying one that is brand new. You’ll often be dealing with private sellers rather than a car dealership, which often makes it difficult to trace if things go wrong further down the line.
A used car is also more likely to have issues such as underlying repair work or maintenance problems than a brand new car. This means that you could end up paying substantially more than you’d budgeted for. Always ask for a full check of the vehicle before you purchase it and check that everything is in proper working order.
With a used car, you do run the risk that the car breaks and becomes unusable – yet you are still liable to pay back the loan. This means that you’ll be in the position of not having a car to drive yet still having to pay back your agreed amount on your loan each month.
It’s worth checking the restrictions that your lender has about which type of car they’ll agree to finance – many will not offer used car loans for vehicles that will be over 12 years old at the end of the loan term.
Where can you get used car loans?
At Positive Lending Solutions, we've helped thousands of Australians get the used car loan they've been searching for.
Our expert team of brokers have decades of experience working within the car loan industry so we can help you save time, money and a huge amount of unnecessary stress by directing you to the best used car loans for you.
With access to a wide range of lenders, we can recommend the best offers for used car loans on the market today.
What is the process for getting a used car loan?
If you’re thinking of getting a used car loan, it’s helpful to have an idea of the type of used car you’d like to buy, as well as a rough idea of your car loan borrowing power.
You can fill out our quick quote form in seconds to start the process and to help you understand an estimated amount of what you may have available to spend.
Getting pre-approval requires basic information from you and will be given by a lender – although it’s not a contract and it’s not 100% guaranteed, so use it as a guide only.
Our expert brokers can help you through the used car loan process – from applications to eventually getting the loan. Having all the information about yourself and the used car you want to buy will help avoid any unnecessary delays so try your best to be organised!
When your loan has been approved, the funds will be transferred to your bank account and you’ll be able to go ahead with purchasing your car.
All that remains is for you to make your repayments in full and on time to pay off your used car loan.
What are the interest rates for used car loans?
Interest rates on used car loans will vary between lenders and will also depend on your individual financial situation.
Our team of expert brokers have access to a wide range of lenders and we can quickly identify deals and offers that you may not be able to find yourself. This means we’ll aim to always get you the best interest rates for used car loans that we possibly can.
What questions should you ask your broker about used car loans?
Before you commit to a used car loan, it’s important that you find out as much as possible about what you’re signing up to and what will be required of you throughout the loan term.
Some of the questions that you may want to ask your broker about used car loans could include:
- What will my repayments be?
- Is there flexibility about whether I make repayments weekly, fortnightly or monthly?
- Will I face penalty fees if I want to pay off my used car loan early?
- Can I use a private seller or do I have to go through a dealership?
- What are the restrictions on the age of the used car I can buy?
- Where will the funds go when my used car loan is approved?
How do you compare lenders for used car loans?
Without expert knowledge, it can be tough to compare lenders for used car loans. Although it’s easy to see the varying interest rates, there may be other factors to take into account – not least the lender’s overall reputation and previous clients who have used them.
With our decades of experience, we have excellent knowledge about lenders offering used car loans in Australia. We can help you to compare the lenders quickly and efficiently – saving you hours online and helping you to avoid any who are less than desirable.
What are the key terms you need to know?
There are lots of terms and phrases that you may be unsure of when it comes to the used car loan process. That’s why we want to help you every step of the way to explain anything you may be unsure of.
Here are a few of the key terms that it’s useful to understand:
- Loan term: this is the time you’ll have to repay the loan in full.
- Interest rate: this is shown as a percentage and is the amount you’ll pay back each month in addition to the agreed loan amount.
- Fixed rate: this means that the same interest rate will be charged for the entirety of the loan.
- Variable rate: this means that the interest rate may change over the loan term.
- Penalty fee: this is an additional charge that you may face if you pay back the loan amount earlier than agreed.
- Deposit: this is an amount that you can to put down – usually as a cash payment – to partially pay for the used car. The loan amount will be for the remainder of the purchase price.
- Insurance: many lenders will require that you have your insurance in place before they approve your used car loan.
Ready to get a used car loan?
Once you’re clear on whether a used car loan is right for you, and you understand the risks that are involved, we want to hear from you. We’ll help to answer any of your questions and queries and offer advice wherever we can.