How to Finance a Used Car: 6 Steps Everyone Should Know Before They Buy
Follow these six steps to make sure you get the lowest rates, best terms, and best customer service when financing your next used car purchase.
APR (Annual Percentage Rate)
The yearly interest rate charged on a loan, expressed as a percentage, including fees and other costs.
Credit
Your credit influences your loan approval, interest rate, and overall affordability when buying a car. Learn how to make it work for you.
How to Build Credit Without a Credit Card
If you’re new to building credit or looking to improve your score without using a credit card, making on-time payments on installment loans can help you get there.
Buying a Car Frequently Asked Questions
You secure a loan from a lender (bank, credit union, or dealership), use it to buy a car, and then repay the loan over time.
Aim to have enough saved for a down payment (typically 10-20% of the car's price), taxes, fees, and the first month's insurance. Additionally, you'll want to have a stable budget for monthly payments and maintenance costs.
While requirements vary, a credit score of 660 or higher is typically considered good for securing better rates.
Yes, though you may face higher interest rates. Options like cosigners or larger down payments can help.
A typical recommendation is 10–20% of the car's price, but some lenders offer zero-down options.
Your payment is based on the loan amount, interest rate, and loan term.
Improve your credit score, make a large down payment, and shop around for the best rates.
FinLit Quiz
How to Finance a Used Car in 6 Easy Steps
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