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Financing a Second-Hand Car


How to finance a second-hand car for a private individual?

One of the most common ways to buy a second-hand car is directly through the owners of the vehicle. In these cases, there are two alternatives to finance them:

Ask for a loan from any financial institution. Of course, we will have to ask the seller to make us a proforma invoice to present it to the lender. The process, in this case, will be identical to requesting any other credit.

Although not all entities do, it is possible that the bank asks us for the seller’s information to make the transfer directly.

It is important to compare different financing offers in various entities to find the loan that offers us the best conditions and best suits our needs.

Pay the seller in instalments. Technically we are not asking for a loan, although we are paying the car in instalments. Of course, for this, both parties (buyer and seller) must agree and there must be a written contract to avoid misunderstandings.

The good thing about buying a second-hand vehicle from a private individual is that, surely, this will sell us the car at a much more adjusted price. Likewise, we will have more room to negotiate a discount, since it will not be limited by the sales policies of any company.

How to finance a second-hand car at the dealership?

The easiest and fastest way to finance a used car is to go to a dealer that sells vehicles of this type. In this way, we can pay for the car in instalments in two ways:

Loan in an entity: an alternative will be to ask a bank or a Credit Financial Institution for a loan to finance the loan.

Linear financing at the dealer: in this case, we will be granted credit and we will simply have to return the money in the agreed manner, paying the corresponding interest.

Flexible financing: it consists of signing a leasing contract with which we will pay lower instalments and, after generally five years, we will have to pay a much higher monthly payment (the residual) to keep the car or we can return it to the dealer or change it for another vehicle.

In a dealership, in addition, we have the advantage that we can choose between different cars with variable antiques: zero kilometres, pre-owned, etc.

Although the vehicle is sold to us by a dealer, we can also finance it with a car loan from a bank.

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