Can You Finance a Used Car?

Financing makes car ownership accessible for millions of people, and, yes, many of those financed vehicles are bought used. If you’re exploring how to finance a used car in the Orland Park area, the good news is that the process isn’t that much different from financing a new one. However, there are several important points to keep in mind. In this guide, our team here at The Garage at Bettenhausen shares everything you need to know.

How Long Can You Finance a Used Car?

So, how many years can you finance a used car? There are no official time limits in place, and lenders are free to establish their own restrictions on loan length and terms. For instance, if the used vehicle you’re considering is beyond a certain age or has more than 100,000 miles, the lender may not approve financing.

There are pros and cons with both short- and long-term used car loans. Let’s explore some of the key benefits and drawbacks of each.

Benefits & Drawbacks of Short-Term Used Car Loans

A shorter term loan gets your used vehicle paid off faster and saves you money on interest, so this is definitely an option to consider. Let’s do a deeper dive into the pros and cons of a short-term used car loan.

Short-Term Loan Benefits

• Less Interest: First and foremost, when you pay a loan for less time, you end up paying less interest. This can save you a significant amount of money in the long run.
• Quicker Pay-Off: The shorter the length of the loan, the faster you’ll have your used vehicle paid off. And this, too, means more money in your pocket.
• Better Refinancing Options: With a short-term loan, there is less risk of your used vehicle acquiring negative equity, which occurs when you owe more on a vehicle than it’s worth. A lower risk of negative equity makes you more appealing to lenders if you ever need to refinance the loan.

Short-Term Loan Drawbacks

• Higher Payments: When your loan and interest are divided between fewer months, your monthly payment will be higher than it would be with a long-term loan. For budget-conscious buyers in Oak Forest and beyond, this could be a substantial financial burden. Use our handy payment calculator to help you budget for your monthly payments.

Long-Term Used Car Loans: Benefits & Drawbacks

Longer term loans should never be ruled out, as they tend to come with lower monthly payments. Here are the major pros and cons of a long-term used car loan.

Long-Term Loan Benefits

• Lower Payments: A longer term allows your loan and interest to be spread out over a longer period. This results in monthly payments that are more budget-friendly.

Long-Term Loan Drawbacks

• More Interest: You’ll pay more interest with a long-term loan because interest is added to every monthly payment. With more monthly payments comes more interest.
• Vehicle Depreciation: It’s no secret that cars lose their value over time. If you go with a long-term loan, there’s a chance that the vehicle may have depreciated to a point that it is difficult to sell when the time comes and the loan has been paid off.

How to Finance a Used Car

Now that we’ve covered pros and cons, you’re likely wondering how to finance a used car. The easiest way to go about it is to fill out a financing application at our Tinley Park dealership or from the comfort of your Frankfort-area home. Our finance team helps car buyers like you find the most competitive rates and terms. You’ll be asked to provide some information, and we’ll look at your credit and financial histories to design a loan package that works for you–both in the long and short term.

Finance Your Next Used Car at The Garage at Bettenhausen

We’ve answered some important questions here: How do I finance a used car? How long can you finance a used car? Now that you know the answers, we invite you to check out our inventory, and if any of our vehicles pique your interest, come in for a test drive. From there, we can start exploring financing options with you. Contact us today for more information.