Can You Finance a Used Car?

If buying a pre-owned vehicle outright isn’t in your budget, you might be asking, “Can you finance a used car?” Yes, you can! Just as you can finance a new car, you can also finance a used one. Before you apply for financing, there are some important considerations to keep in mind. Country Chevrolet of Benton gives you all the details in this guide that answers the commonly asked question, “Can you finance a used car?”

Used Car Financing Restrictions

Before we get into your financing options, let’s go over some typical restrictions that lenders have in place when it comes to used vehicles. Lenders can set their own restrictions, so expect different rules from different providers. It’s not uncommon for some lenders to prohibit buyers from financing used vehicles with more than 100,000 miles or vehicles over seven years old.

How long can you finance a used car? There are no official limits, which means individual lenders have the power to determine maximum loan terms. However, a standard loan term for a used vehicle ranges from 60 to 72 months.

How to Finance a Used Car

There are two primary types of financing options for used cars, short-term and long-term loans. Both come with benefits and drawbacks, and understanding the pros and cons will help you make the best buying decision for your financial situation in the Paducah and Murray area.

Short-Term Loans

If it’s feasible for your budget, a short-term loan provides the most benefits, including:

• Pay Less Interest: You are charged interest every month. When the loan term is shorter, you’ll pay less interest over time than you would with longer-term financing.
• Pay Off Your Loan Faster: With a shorter loan term, you’ll have the balance paid off that much sooner.
• Refinance With Ease: There is less risk of negative equity with a short-term loan. Negative equity occurs when you owe more on your car than it is currently worth. By minimizing the chances of negative equity with a short-term loan, you’ll likely be eligible for more and better refinancing options if the need arises.

On the flip side, be aware of the major disadvantage of short-term loans:

• Have a Higher Monthly Payment: Since your loan term is shorter, your monthly payments will almost certainly be higher than they would be with a long-term loan. Depending on your budget, this might be a significant financial burden.

Long-Term Loans

If you’re curious about how to finance a used car on a budget, a longer-term loan is an option worth exploring. Most Mayfield drivers cite one major benefit of going this route:

• Enjoy a Lower Monthly Payment: Because the loan term is longer, you’re distributing the cost of the vehicle over a longer period, resulting in smaller monthly payments.

At the same time, be mindful of the fact that loans of longer duration come with some drawbacks:

• Pay More Interest: With a long-term loan, you’ll end up paying more interest because there are more months in the loan term.
• Own a Depreciated Vehicle: While all vehicles depreciate over time, used vehicles can lose a significant amount of value by the end of a long loan term. That may not be the best news if you plan on selling it once it’s paid off.

Find the Right Used Car Financing Options at Country Chevrolet of Benton

In this guide, we’ve answered some basic questions on how to finance a used car:

• Can you finance a used car?
• How many years can you finance a used car?
• What are the pros and cons of financing a pre-owned vehicle?

Start exploring your loan options by reaching out to our finance center. Use our convenient payment calculator to help you decide what you can comfortably afford. Then, when you’re ready, check out our used vehicle inventory and find your next car in Benton.