Top 3 Common Car Financing Myths

10 November 2016
 Categories: , Blog


Do you own a car, but it's on its last legs? Do you need to get another vehicle so that you can continue to go to work? Few people can afford to buy a car outright, whether it's new or used. Fortunately, there are car financing services to assist you. Whether you're looking for a new or used vehicle, there are several myths that you may have heard of that may be preventing you from going out and actually shopping for a vehicle. Here are some of the most common myths and the truth behind them:

Bad credit will prevent you from getting a loan: It is true that someone with great credit will be approved almost instantly and will often get a very low interest rate on their loan. However, bad credit doesn't automatically disqualify you from being able to get a vehicle. Car financing services will look at a variety of factors, including what type of debt you have, before approving or denying you. People with less than stellar credit scores are still often approved for a loan, though you may have to pay a higher interest rate than someone with a great credit score. 

Loans are always expensive: Having a high interest rate can make your payments go up higher, but that doesn't mean that they're not going to be affordable. Car financing services exist for used cars as well as new cars. A pre-owned car is obviously going to have a lower price tag than a vehicle that is brand new, helping to make the car more affordable. After buying the used car, you may even have money left over to start paying off your debts and raising your credit score so that the next time you're in need of a vehicle you'll be able to purchase a brand new one.

Lower payments are always better: A lower car payment isn't always a good thing. Sometimes, the terms may be changed so that you're actually paying a higher amount. If you have the choice between a vehicle that is $300 for 24 months or a vehicle that is $250 for 36 months, the one that has $250 monthly payments actually costs $1800 more once the vehicles have been paid off. If you can't afford the higher payment or if the vehicle with a lower payment will work better for you, then that's perfectly fine. But make sure you do the math before making your decision since it may not be immediately obvious which one will have the higher price tag.