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Bad Credit Car Loans
Bad Credit Auto Loans
No Credit Car Loans
Used car financing in No Credit Car Loans
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And of course "No Credit Check Car Loans" in No Credit Car Loans area
Is It Cheaper To Get A Bad Credit Car Loan On An Older Car Versus A Newer Model?
When applying for a car loan in general, people have this misconception an older model car usually carries a lower payment. This is not the case due to several factors.
Although it’s true an older vehicle usually has a lower price tag, but when it comes to financing there is less incentive for the bank to lend out this type of loan. Smaller “cap cost” (selling price) means lower profit, and due to the vehicle’s age and mileage. It is more prone to mechanical break downs and therefore this type of loan has a greater risk involved. A newer model car has the exact opposite effect, it can be stretched to a much longer loan term (for example instead of 36 month term, it can be financed up to 72 month), at a much lower interest rate on top of that, you can really notice the difference in the monthly payment.
To offset the risk factor the bank or lender will usually ask for a higher return on their investment, therefore a much higher interest rate. It is no surprise, sometimes an older vehicle can have an even higher monthly payment compare to a newer car. In another word if you had the choice to pay $300 per month to finance a car, would you drive a 2005 Honda Civic or a 2002 Mazda.
When this scenario is played out in the bad credit car loan market, it is even more dramatic. The interest rate difference can be astounding ranging from as little as 8% to as much as 29%. If you have the funds it is usually a good idea to pay for the lower priced vehicle in whole, that’s how can take advantage of the pricing.
Thank you for reading this article it is brought to you by No Credit Check Car Loans you can find us online at http://www.nocreditcheckcarloans.ca we are your No Credit Check Car Loans, we are your No Credit Car Loans service provider.
