Financing Older Cars: Can You Do It?

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Buying a used vehicle offers many benefits.
Depreciation reduces the price of a used car by thousands of dollars year after year, allowing you to drive away in a well-maintained late-model vehicle at an excellent price.
Or if you want a classic car from years gone by, with unique options and features, the used car market provides fertile ground for locating it.
And because the used car market offers thousands of vehicles located across the country, you can search far and wide for the one you want without having to wait on dealer inventory.
But what if you find the used car you want and it happens to be 10 or more years old? Can you finance an old car?
Let's explore the subject of auto loans for older cars.
Auto financing explained
Car financing lets you pay the transaction price over months and years, dividing a considerable cost into smaller, manageable pieces.
Whether the monthly payments or total transaction price, a vehicle loan considers many financing options like the down payment amount, term length, interest rate, and APR.
Making a down payment lowers the loan amount, which subsequently reduces your monthly payments during the loan term.
Typical terms for an auto loan last 24-84 months, depending on the buyer's preference. One benefit of longer-term loans is reducing your monthly payment amount, which can help you get behind the wheel of something you may have thought outside your price range.
The interest rate is a financing charge applied to the total sum you borrow, also known as the principal, and added to your loan payments. If you have excellent credit, you may be able to secure a lower interest rate. Conversely, you may receive a higher interest rate with a bad credit report.
The APR, short for annual percentage rate, considers the interest rate along with any additional fees charged by a lender and offers a comprehensive explanation of your costs during the life of the loan.
Car buying on the used market offers several advantages over purchasing a new one. You have the opportunity to save thousands of dollars while still driving away in a nearly new vehicle. But where can you go for not only a great price, but also a quality used car? Shift offers fair, no-haggle prices driven by powerful machine learning algorithms and tons of data. And at Shift, certified mechanics perform extensive 150-point inspections on every vehicle sold, and you get a free Carfax report for the ultimate in transparency. Want to take a test drive before you buy? If you live in one of Shift's many service areas, a concierge will drive to you, letting you get a feel for the car's performance before signing the papers.
The advantages of buying an older vehicle
Today's used cars represent an appealing alternative to new ones, with build quality steadily rising year after year.
In fact, in 2021, the average age of a car in the U.S. is 12.1 years and has incrementally increased annually. While a driver may expect a car to last 100,000 miles in the past, now that number is closer to 200,000 miles.
And with a used car, especially an older one, representing a serious discount compared to a new one, it makes sense to look to the pre-owned market when you need a new-to-you vehicle.
With the excellent durability and performance of modern-day used cars, you could drive off in something that performs wonderfully yet save many thousands of dollars versus the cost of a new one.
How to finance an older car
With today's used vehicles lasting for many years, auto loans for older cars are increasingly common.
Though it depends on the source of the loan, you may even be able to secure financing for a car with 150,000 miles.
When applying for car loans for older cars, a lender considers your financial history and spending habits as well as the vehicle itself. Without the collateral of a new car, auto loans for older cars are more like personal loans. Since credit for a used car purchase is by an unsecured loan, a lender needs the reassurance of your ability to pay.
As a loan for a new car, your credit score is considered and helps determine your eligibility for specific rates and terms. Typical FICO credit scores range 300-850 and attest to your ability to pay back a loan. Higher scores generally mean lower interest rates for borrowers, but you can still obtain suitable financing even with a poor credit score.
If you don't have good credit, a family member or trusted friend can vouch for your dependability by co-signing and helping you secure the financing you need.
Another way to smooth out the process of obtaining car loans for older cars is by making a down payment. A down payment demonstrates your financial stability and increases the chances of being approved for a loan.
And not only does a down payment increase your likelihood of loan approval, but it also reduces your monthly payments during the loan term.
When you decide to buy a used car, what can you do to ensure it lasts mile after mile, year after year? Shift offers best-in-class service contracts at a fair price without sales pressure. You get the great price and value of a used car with the bumper-to-bumper protection of a new car. With a Shift Vehicle Protection Plan, not only are specific components like the engine and brakes covered, but you also receive roadside assistance in the event of a flat tire or running out of fuel. Help is just a phone call away, 24 hours a day, 365 days a year.
2009 Nissan Versa 1.8 SL (from $8,400)


What to look for on older vehicles
Though many quality vehicles exist on the used car market, there are several things to look for before making your purchase.
What may look like a car in excellent shape could be hiding secrets under the sheet metal.
Obtaining a vehicle history report like those offered by Carfax or Autocheck informs you of ownership history, past accidents, title issues, and repairs performed.
If you want a little extra reassurance before financing a 20-year-old car, having a pre-purchase inspection done can highlight any mechanical or cosmetic issues.
And taking a test drive before you buy a used car validates its performance and condition, letting you know you're purchasing a quality vehicle.
Financing a new-to-you car can be a hassle. But Shift makes financing easy. Shift works with a network of trusted lenders who compete for your business, so you get the best deal on financing. Applying for a loan with Shift is simple, with no cost or obligation. And financing with Shift is so convenient that 9 out of 10 buyers choose us when they need a loan.
Car loans for older cars in summary
Remember, with the high-quality vehicles available on today's used car market, buying pre-owned instead of new makes a lot of sense.
Auto loans for older cars are common these days, and securing financing is a matter of proving your reliability and creditworthiness to a funding source.
Though buying a used car can be a lot of fun, what if you need a car loan? Financing can be a hassle, with confusing terms like APR and interest rate, and applying takes up your valuable time. Shift makes financing your new-to-you vehicle easy by working with a network of trusted lenders who compete for your business, so you get the best deal. And there's no cost or obligation when applying for a loan with Shift. Financing with Shift is so convenient that nine out of 10 buyers choose us when they need a loan. If you have a low credit score, don't worry. Shift welcomes co-signers, too.
2010 Toyota Camry LE (from $9,950)


Legal notes
The views expressed in this article do not necessarily reflect the views of the author or Shift Technologies, Inc. Shift does not endorse or evaluate the accuracy of any claims made or data provided by third party sources referenced herein.
This article is for informational and educational purposes only and may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our effort to advance auto education. We believe this constitutes "fair use" of any such copyrighted materials as provided for in Section 107 of the US Copyright Law. The material in this [article/blog/website] is distributed without profit and only to those who have demonstrated an interest in receiving the included information for research or educational purposes.
All prices are based on vehicle availability and pricing as of
April 15, 2022
.
Pricing shown is not guaranteed and does not include taxes or other product fees.
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