Used Car Interest Rates
Here at Andy Mohr Automotive, we’re constantly getting questions about used car interest rates from our customers in Indianapolis, Plainfield, Bloomington, and the surrounding communities. That’s why we decided to go ahead and create this guide to making sense of used car interest rates. Interested?
We’ll start off by explaining why used vehicle APRs are almost always higher than new vehicle APRs; we then will offer a few tips on getting the best interest rate possible; finally, we’ll tell you about our plans.
If you’d like to skip all of that and get started now, don’t hesitate to contact our Finance Center.
4 Reasons Why Used Car Interest Rates are Higher than New Car Interest Rates
- It’s more difficult to appraise a used car than a new one: With a new car, depreciation is pretty simple to calculate. With a used car, there can be other hidden issues that aren’t apparent.
- Low credit profile buyers often go for pre-owned cars: This makes used car buyers at a higher risk for default than new car buyers – a recipe for high APRs.
- Manufacturers want people to buy new cars: Often, they’re encouraging dealerships and other financing entities to push new cars as much as possible even by offering lower interest rates.
- Financing a used car is more of a risk: Since used buyers are more likely to default than new buyers, that means that the dealership is more likely to have to repossess the car. Since used cars are more difficult to appraise than new cars, that means that, after repossession, there’s a higher chance that the dealership will have an outstanding ‘upside down car loan’ on their hands – this is when the borrower owes more money than the car is actually worth.
How to Secure the Best Used Car Loan
Now that you have a better understanding of that, let’s cover a few tips on how to get the lowest rate.
Tip #1: Know where you stand. If you’re not aware of your own credit history, how can you expect to have the upper hand in any negotiations? Make sure that you order your free credit report right now.
Tip #2: Know what lenders look for. In addition to your credit score, they’re going to examine your payment-to-income ratio, your overall debt-to-income ratio, your down payment, and other things.
Tip #3: Shop around for different options. Don’t just settle for the first offer that comes your way. In fact, we encourage you to try a few lenders on for size. Why not Andy Mohr Automotive Finance?
Used Automotive Financing – Indianapolis, Bloomington, and Plainfield, Indiana
The best news is that the financing team at Andy Mohr Automotive offers some of the best used car APR rates in the Midwest. If you’re interested, we encourage you to Apply for Financing today. We’ve made a simple form that will only take a few minutes to complete. We’ll get back to you as soon as possible!