Feeling the crunch of a tight car budget? Have no fear, because auto loans are available to take some of the stress away from buying a used car – and these financing options are rapidly becoming a popular choice for a large portion of drivers.
Automotive financing options are making it easy for prospective drivers to get behind the wheel. With a large number of people searching for cars – auto sales in August were at the highest rate since 2006, according to InAutoNews – many are turning to financing.
More loans than ever before
Experian Automotive reported that more than 53 percent of all used car purchases in the first quarter of 2014 involved some kind of financing, which is an increase of nearly 1 percent from the year before.
People are also borrowing more money. According to NBC News, the average used car loan now sits at $18,258. That's almost 2 percent higher than it was in the middle of 2013. It also led to the average monthly payments for used vehicles hitting an all-time high of $355. While that may seem like bad news for some money-conscious buyers, it is not a death sentence. In actuality, there are many options for people – even those with poor credit – to find a loan that works for them.
"More and more consumers, especially those that are credit challenged, are turning to the used vehicle market as a viable option to purchase their next car," said Melinda Zabritski, a senior director of automotive finance for Experian.
Loans go to the extremes
According to Experian's data, many sub-prime buyers are taking advantage of long-term loans to land their dream vehicles. But even as a significant portion of loans extend anywhere from 73 to 84 months in length, delinquencies remain low. That means drivers with a variety of budgets are finding ways to keep up with monthly payments, even over an extended period of time.
The many options drivers can consider may make purchasing a used car overwhelming. Luckily, there are facilities equipped to help you make the best decision.
Shoppers who aren't sure about their best course of action should head to New Jersey State Auto Auction. Not only does the lot have hundreds of Carfax-certified cars, trucks and vans available, but it also has an in-house financing team that can help anyone find a loan.