Thursday, January 10, 2013

Car Financing for the 50 Plus Driver

Getting a car at any age can leave a massive hole in your wallet. Getting a new car is often out of the question, especially when you’re over 50. So you should choose carefully. Even without the option of buying a new car, there are a lot of great used cars out there, which are practically waiting for you to get them. There are always ways to finance a car that will leave both your wallet and your retirement funds seem almost intact. In this article, we will look at different options to car finance. These should come in handy as you make the decision on purchasing your car.

Borrowing from friends

Borrowing money from a bank may not be the best option when you’re 50, not to mention the interest they charge you. It’s not really smart to pay interest for a car. But unlike banks and professional lenders, your friends can lend you money, without charging any interest. Also, a friend wouldn't mind if you were late with the monthly payment. But always make sure you can afford to pay them back before you borrow!

Be persistent

Even if you’re able to borrow from a professional lender, at 50 it becomes a tougher option. But don’t give up on getting a new car for yourself or your family just because one of them turned you down. Be persistent. As you wouldn't apply to just one job if you’re jobless you shouldn't apply to just one lender when it comes to car loans. You will have to fill a lot of loan applications, answering a lot of questions, about your income, employment history and expenses. But whatever you do, do not misstate any information you are stating in the application. All of those applications go through a verifying process, and not telling the truth may put you in real trouble.

Know your credit

It is best to check where you stand before you actually get a loan for a car. You might be able to put your hands on a car loan no matter whether your credit is good or bad. But the difference is that the worse your credit is, the more you will pay. Loaners and banks have the ability to easily repossess your car if you can’t pay for the loan.But, you will be “lucky” to get a car loan if your credit isn't shiny.

Money for Down Payments

This is the trickiest part of buying a car. But you do have a few options. Chances are, that at age 50, you have to dip into your retirement funds to get those approximately $1000 to put down as the down payment when buying your new car. But, that doesn't have to be the case. A better option would be that you try to trade in your old car for a down payment.However, trading in your car as a down payment may not always be worth it, and you will most probably get more cash if you sell your old car yourself. But sometimes, if you know your old car’s value and the trade amount is approximate to the car’s value, this could be the option that you use. Otherwise, like mentioned above, you could always borrow some money from your friends too so you raise the money required for the down payment.

Be there with cash

Please beware that many dealers may find a way to manipulate you, or get you to sign one of their high-interest loan deals. That’s why sometimes it is better to get a loan from a bank or a credit union. They will usually take lower interest, and offer you better deals than the average car dealers. Though, that is not always the case.

In case you are really tight with money, you can always turn to finance companies. Even with sky high rates and really bad terms, you can turn to them if you have no other choice.

But to avoid making such harsh deals, in the very worst situation, the best option for you would be to tap into your retirement funds so you can raise the cash for the down payment, and a small bank loan.

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