Auctions are fast picking up as being a popular destination for buying used cars. You can manage to get good vehicles at fractions of their real prices at auto auctions. But when it comes to getting finance for your auction car, then most people draw a loss. The first thing to keep in mind with auctions is that you can actually manage to buy a car here after saving for some months since buying good cars at auctions for somewhere between $5000-$10,000 is generally the norm. At some auctions, prices are known to start from $100 to $200, but if you are looking for a decent car and you are not married to lady luck, then expect to pay something above three thousand dollars for anything that will be able to drive itself out of the auction. So if you have the required amount of money in your bank account, then you actually do not need any help with auto financing; however, if you don’t then read on.
A large number of auctions nowadays have tie ups with finance and loan companies that are all too ready to lend you money for buying your car at an auction. If you can get such a company to finance your car, then it can prove to be quite hassle-free. However, there are a couple of catches here that you need to be aware of. The first thing is that not every auction has a tie up with financing companies and it might turn out that the one you plan to attend does not offer any such facility. Secondly, there are a large number of online auto financing companies that might offer interest rates lower than what these financing companies would and there is a good reason for that. Online financing companies do not have to spend money on setting up kiosks at auctions or hiring human resource for interacting with clients or for monitoring auctions.
There are a number of online auto financing companies that offer used car loans for a rate of interest that is much lower than what a regular brick and mortar company might provide. In fact, online versions of reputable banks and other lending institutions offer rates that are lower than their own off line office rates. You should be aware of the fact that used car loans generally have an annual percentage rate that is at least 1.5% to 2% higher than the rates that apply on new car loans. So don’t be surprised if you find that your old car loan is costing you more than what you paid for your new car. Also remember that the newer your car model is the lesser will be the rate of interest. You might end up finding that any money you save on going for a more previous car model is balanced by the higher amount of interest that you have to pay on your car loan. On the other hand, most companies do not offer any loans for cars that are more than 5 years old, so there’s no point in bidding for one at an auction if you cannot finance it yourself.
Now that you know about the basic rules that might apply to a loan that you take for buying a car at an auction, you should also know that the best place to get a loan to finance your auction car are online car finance companies. However, there is a catch here—all online auto finance companies do not offer finance for auction cars. At the same time, there are a large number of companies that do, and before you go and bid on your car, it is important that you do your research well and find an auto financing company that gives you a loan for buying an auction car at a reasonable rate of interest. You should compare a number of offers, payment periods and rates of interests before finally zeroing down on the firm that you want to use for financing your auction car.