Hoosiers who don't have much cash but are still looking to get a new ride can either buy a brand new car or opt for a sturdy used one. If they choose the latter, especially from Indianapolis used cars dealers, it could be mainly due to the cheaper price tag, though some may argue that the purchase process itself is a bit more complicated.
There are some who feel taking out a loan for a used car isn't worth it. They contend that those loans are more expensive, and by the time the car is paid off it's not worth the amount of the loan. The truth is: interest rates on used car loans can be higher due to the vehicle being a loan collateral, but there are a few tips you can follow to help get an excellent deal on a used car loan.
Perform a Credit Check - Before looking at various cars for sale in Indianapolis up close and personal, first check up on your credit score. Auto loan rates are directly tied to buyer credit scores, so even a minuscule stickup on your credit report could cost you that good deal. You can easily get a credit report from one of many credit-reporting agencies (i.e. Experian, Equifax and TrasUnion).
Keep Tabs on a Loan's Total Cost - What this means is that you should focus on a loan scheme's Annual Percentage Rate (APR), which varies daily. The lower the rate, the better the savings. Take this for example: a three-year, $15,000 loan at 5 percent APR can save you almost $500, compared with a loan sporting a 7 percent APR.
Aside from the APR, you should also keep an eye on the loan's term, which can affect both your monthly payment and the total cost of your financing in a major way. Always remember that a shorter term may mean bigger monthly payments, but less money paid overall. Your task is to keep the loan's term as short as possible, provided you can afford it.
Know How Monthly Payments Work - Don't assume that you got a good deal just because you can afford the monthly payment. If you only look at the latter, you won't have an idea about how much you're being charged for the car, what you're getting from the vehicle and how high your interest rate is. A low monthly payment can easily fool you into paying more than you should, so be extra careful2.
Remember these tips as you visit dealerships like Fletcher Chrysler Dodge Jeep Ram, and you'll be fine.
(Source: Should I Get A Loan For A Used Car? Credit.com, April 20, 2015)