Can You Negotiate a Used Car Loan?

By Angela Monroe - January 27, 2020

If you’re looking at used car loans with bad credit, you’ll want to make sure you get the best loan possible. Keeping interest rates as low as you can and ensuring you get a fair loan term. This can really help you to keep your monthly repayments down. You shouldn’t feel that you can’t negotiate a used car loan. In fact, there are lots of things you can do to ensure you get the very best deal for your needs.

Many people with bad credit have misconceptions that they just need to accept whichever used car loan they’re offered. This isn’t the case though. And even if you have bad or no credit there may still be room to negotiate on your used car loan.

Here are helpful tips on negotiating a used car loan:

Don’t accept the first offer

Do your research and shop around for the right used car loan for you. Don’t let yourself down by simply accepting the first used car loan that you’re offered. Used car loans with bad credit are generally slightly higher in terms of repayments. But that doesn’t mean that you can’t work hard to get a better deal. Lenders will always have some room to negotiate so don’t be fooled into thinking that their first offer is final.

Consider the cost of the car

It’s easy to forget about the cost of the vehicle when you start to negotiate a used car loan. Try and keep both the total cost of the vehicle AND the total cost of the finance deal in mind – it’s crucial to think in terms of how much will be coming out of your bank account each month, and this includes interest and any additional fees you’ll be due to pay.

You can always negotiate on the cost of the used car itself – by getting the price lower you will be borrowing less and this could help you to negotiate on the used car loan. Know the market by doing your research and you’ll be in a stronger position to negotiate properly.

Negotiate interest rates

Many people think that if they’re getting used car loans with bad credit they have to accept high rates of interest that are given to them by lenders. This doesn’t have to be the case. Although you’re likely to be paying higher than standard rates of interest, lenders should not take advantage of your position and you should feel free to hunt down the best interest rates.

Negotiating interest rates on used car loans with bad credit will really help to bring down your monthly repayments. Lower rates of interest can have an immediate effect on what you’re due to pay back each month so put this high on your priority list when it comes to negotiating your loan.

Adjust your deposit amount

One way of negotiating on a used car loan with bad credit could be to adjust your deposit amount. This won’t be immediately possible for everyone, but if you do have extra cash that you can put towards your deposit it could help you to decrease the amount of money that you borrow – as well as getting you a loan with a better interest rate.

Only increase your deposit amount if you can really afford to do so. There is no point in stretching yourself too far financially with a deposit is too high – leaving you struggling to make your repayments each month due to lack of cash flow. Budget properly and if increasing your deposit is an option then you should consider using this to negotiate.

Negotiate loan terms

Alongside your deposit and interest rate, you’ll want to consider whether the loan term that you’re being offered is one that works for you. You don’t have to accept the first offer given to you by a lender and if you want to opt for a shorter loan term then feel free to negotiate.

Think about your financial situation and what’s the best option for you. Some people may need longer loan terms in order to be able to pay back the loan in full, yet if you can pay back the loan in a shorter-term this could save you money as you’ll pay less interest overall.


Ask for help

If you feel overwhelmed at the thought of negotiating your used car loan yourself, why not ask for help? At Loans for People with Bad Credit, we have years of experience working with people with bad credit to help them get in touch with the right lenders who can help find the right lenders for each individual situation.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.


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