Used Auto Loans In Todays Economy

We all know that getting all types of credit is easier and less expensive if you have a strong credit score. Unfortunately not everyone has a strong credit score, sometimes it is because of poor financial decisions, but other times it is due to circumstances beyond our control. Used car loans were always the most challenging to be approved for anyway and Used auto loans in todays economy are even more challenging to be approved for.

The biggest reason the banks were so stringent on their used car loans is because the car itself wasn’t worth as much. With a used car there is less collateral so the loans were a little tougher to get. Used auto loans in todays economy are even harder just because there is a higher risk of someone losing a job and much less collateral to protect the bank.

Even though it is a little tougher today, it still is not impossible. You will need to be willing to invest some time because finding a lender to work with you will probably take some time. You will most likely have to try several banks or credit unions before you find one that will approve your loan request.

It will help if you can save some money for a down payment. The more money you are bringing to the deal, the less money the bank has to lend and the less of an exposure they will have. That can help them decide to lend you the money.

Staying with your own local bank or credit union is a great idea too. If they know you and you have been a loyal customer for a long time then you will have a better chance of being approved even with a few dings on your credit.

After all, if you go to your local bank you will be able to sit down with them and hopefully explain any dings you have. Maybe some of the blemishes on your credit report weren’t your fault.

For example, if you had a health issue and missed some work, or perhaps you lost your job and fell behind on some bills, your local bank will be much more likely to listen and take those things into consideration.

Another option is a car dealership that provides their own financing. These places can be a dream come true or a nightmare so take some time to thoroughly research them.

Take into consideration the quality of the car you buy. You are responsible for making the payments no matter what so even if you have to pay for car repairs you still have to make your car payments. Make sure you take your car to a trusted mechanic, before you buy, to have it checked out.

The economy has thrown a lot of people for a loop. people are realizing that they have much less financial security than they had previously thought. Job losses have also taken their toll on the credit score of many people making any type of major purchase a major headache.

The good news is that used auto loans in todays economy are possible, just difficult. If you can, take some time to save up a small down payment, and be willing to hear a few “no’s” before you get a “yes”. Just hang in there and be patient, you will get a car eventually (more than likely).