Used Car Finance Calculator For Loans You Can Afford
Posted by admin at 10 January 2016, at 15 : 26 PM
When buying a car, people have two choices: to buy a used car or to buy a brand new one. However, a new car looses its initial value fast, and market specialists say that buying a new car is another way to lose money. Buying a used car has the advantage of losing its purchase value much slower than a new car.
However, when looking for a used car finance calculator and the financing sources, you should know how finance companies work out loans and loan rates. The first thing you should know is that the companies offering you car loans are calculating the car’s value based on the used car loan value instead of calculating after the real value of the car. Knowing this thing, you can easily calculate your loans and each of the loan rate, and you will know for sure how much you have to pay back.
You can create such a calculator easily. Finance companies calculate the loan value of 80% of the real cost of that particular car. To make things simpler, we will provide you with some sale numbers. In the following example, you will be buying a good used car that is being sold for $10,000. When you go with the car’s details to the financing company, they will only grant you a loan value of $8,000, give or take a couple hundred dollars. So you have a $10,000 used car, and the financing company will only give you a $8,000 loan. This means that you have to come with the rest of $2,000 yourself in order to purchase the car.
Depending on the used car you want to buy and how much the seller is asking for it, your financing company may give you all or just some of the money. If you have previously worked with them, and you have proven to be a good client, they will grant you the loan with ease. However, in other cases, the financing company may require you to secure the loan (this means signing a contract through which you secure the loan with an asset that has a similar value).
The best way to check if you are eligible for a large loan is to consult your credit score and discuss directly about the loan rates with your financing company. In some cases, the financing company may require some photos and identification data of the used car you want to buy to complete the contract. You should also check the interest rates of different financing companies and work out what you can afford with a used car finance calculator. Some such companies may offer lower interest rates for personal loans for car purchase and choosing a specialized financing company is preferred to obtaining the loan from the car dealer directly.
Always consult with a friend or specialist when you want to buy a used car to make sure you make the right choice.