save money used car

How to Save Up to 40 Percent on a Used Car

With new cars topping $47,000, it’s understandable why you’re shopping for used vehicles at discount rates. But even used cars are expensive these days! A used sedan might only cost around $20,000 to $25,000, but a used SUV or pickup truck costs an average of $37,000! 

If these prices are still out of your budget, rest assured that there are additional ways to save money on a used vehicle.

Consider Repossessed Cars 

The first piece of advice is to open your search to repossessed vehicles. Repo vehicles are cars that have been taken from their owners because they couldn’t afford to make the payments. They are now in possession of the lender (i.e., bank or credit union) and ready to be sold.

Banks and credit unions are highly motivated sellers because they don’t have the space or capacity to store and sell cars. Browse RepoFinder’s database – it has hundreds of repo cars, trucks, sedans, etc. that you can place a bid on today! On average, repo cars are between 25 and 40 percent cheaper than new cars. 

Shop for Vehicles Online 

Another way to save money is by shopping online. You can see what’s available at local dealerships, saving time and hassle from driving from one dealership to the next. You can also expand your search by looking at cars in other locations, such as the next closest state or city. 

The nice thing about shopping online is that you can take your time and make a good decision without pressure from a car salesperson. This could end up saving you hundreds or thousands of dollars, as it’s easier to spend more when you’re in a high-pressure environment. 

Get the Right Financing 

When you buy a car through a dealer, you’re more likely to use their financing department. While there is nothing wrong with this – it’s quick and convenient – you probably aren’t getting the best deal. 

When you shop for cars on your own, you have the option to check interest rates through multiple lenders. You can then get a pre-approval from the lender with the best rates. Most lenders allow you to complete the application process online, so there’s not much you have to do but fill out some paperwork. 

Keep Your Loan Short 

Even though your payments will be smaller if you stretch out your loan to 72 or 84 months, you’ll end up paying more for your vehicle over time. And, if your car is getting older and experiencing problems after four years, you’ll still be locked in.

If you can swing it, keep your loan short. This way, you’ll be able to pay off your loan faster, and you won’t find yourself underwater if something happens to your car. 

Make a Down Payment 

If you sold your previous car to a private buyer, you can use this money for a down payment. A sizable down payment shortens your loan, and it can help you lock in lower interest rates. This happens because a down payment lowers your loan-to-value (LTV) ratio on your financing, making you more attractive to lenders. 

If you don’t have a sizable down payment, look for specialized online lenders that offer low-rate auto loans without down payment requirements. Credit unions may also be willing to work with you. 

These are some of the best ways to save up to 40 percent on a used car. Keep in mind that there are many ways to save – it’s not just the purchase price that makes a difference. For savings of up to 40 percent, shop with