The best way to get affordable used luxury car financing is to only consider loans that offer good terms and to compare several loans from different financing companies to find the best option before making a decision.
DIFFERENCES
The differences in financing used luxury vehicles versus financing new or non-luxury vehicles is not based on the vehicles themselves but based on the amount of money being borrowed. Typically used luxury vehicles are less expensive than new luxury vehicles and may be comparably priced to new non-luxury vehicles and cost more than used non-luxury vehicles. So, the loan amount for used luxury vehicles are typically in the middle range of average vehicle loans
TERMS
There are three main terms to consider when evaluating a car loan; interest rate, loan amount and length of the loan.
Interest Rate is the amount of money you will pay for the loan, divided into small payments every month for the life of the loan. 3 to 5% is considered a good interest rate among industry experts, anything over 5% is not advisable to pay. Interest rates are based on the borrower’s credit score and credit worthiness (or based on a co-signers credit score if involved).
Loan Amount is the money needed to purchase the vehicle, including taxes, fees and money needed to pay off a previous vehicle loan. (Sometimes the interest rate is not included in the loan amount so the borrower has to calculate how much the interest rate they are quoted will increase the loan amount.)
Please use our loan calculator to determine the total value of your loan with interest included and find out what your monthly payments will be.
Financial experts recommend reducing the loan amount upfront by making a down payment of 10 to 20% of the loan amount. This can be paid for in cash or sometimes dealerships will accept trade in vehicles that can help reduce the loan amount.
Length of the Loan is the time the loan is agreed to be paid back. Financial experts recommend not to exceed 5 years (60 months) for a loan length. The longer the length of the loan the smaller the monthly payments but the more interest will be paid. Since vehicles depreciate and the loan payments and interest will remain the same, then at some point the value of the vehicle will become less than the loan and the borrower will owe more than the vehicle is worth, which should be avoided and can be avoided by making an informed decision and understanding the terms of the loan at the beginning of the process.
Please use our car loan comparison tool that allows you to conveniently view car loan rates from different lenders all in one place.
CASH OR FINANCE
Deciding rather to pay cash or finance a used luxury vehicle is a personal decision based on the purchaser’s financial situation, personal interest and discretionary spending. The mission of our company is to make modern luxury vehicles accessible to the average person, specifically those people that are financially responsible and do not want to stretch themselves financially for a vehicle purchase.
Ideally, a purchaser would buy a used luxury vehicle at the bottom of its depreciation cycle, for cash. Pay cash to purchase and install our facelift bodykit to modernize the vehicle. And have a dream vehicle that looks new for a fraction of the price, with no additional payments or interest. Keep the vehicle for several years and try to sell it for above market value based on the aesthetic updates.
For those buyers who are able to secure a car loan for a good interest rate, for a good loan length and provide a good down payment, they can also have their dream vehicle, pay a small manageable amount of interest, making the purchase a good value. By financing the vehicle and even the facelift bodykit they can get immediate satisfied gratification and take advantage of the most current trends instead of waiting and purchasing later when the vehicle might not have the same cool factor because styles have changed. By having saving and good credit they can get what they want now and still save money.
It is not recommended to purchase a vehicle that is too expensive and have financing with a high interest rate or a long loan length (anything over 5 years or 60 months). This will cause the purchaser to be happy in the short and enjoy the vehicle but it will put a strain on personal finances and might cause the purchaser to become upside down on their car loan.
A purchaser should not be pressured into getting a loan with bad terms and turn their experience of purchasing their dream vehicle into a nightmare. Lenders will adjust terms to fit a purchaser’s monthly payment requirements while increasing the interest rate and the length of the loan, resulting in more inconspicuous costs.
The average car loan in the US has a length of 68 months, an interest rate of 4.2% and a loan amount of $30,000. These terms are above recommended levels, our ideal transaction would be to avoid a car, buy a used luxury vehicle in cash for around $12,000, install a facelift bodykit on the vehicle for around $10,000 (including kit, installation and paint) and for less than $25,000 have a vehicle that looks like a new $100,000 vehicle. It is ultimately the purchaser’s responsibility to look out for their own self-interest and to be as informed as possible to make sound, fiscally responsible consumer choices.
HELPFUL USED LUXURY VEHICLE BUYING TOOLS
Please use our used vehicle price comparison tool to view prices of your favorite vehicles from various online retail companies and marketplaces all conveniently located in one place to quickly, thoroughly and easily compare.
If you are interested in financing your purchase please check out our loan comparison tool in order to compare rates from various car loan lenders and make an informed decision. Also, if you are interested in customizing your used luxury vehicle and want to make it look like the most updated and modern version, please explore our the selection of Facelift Bodykits we offer and consider other smaller options to modernize and update your vehicle by viewing some of our affiliate products.
