Do Dealerships Prefer Cash or Car Loans When Buying a Vehicle?
Buying a vehicle is exciting, especially with all the new features that are available on the market today. It can also be a little bit frightening, as you may not be confident that your credit rating will support the purchase of the vehicle of your dreams. When you’re applying for car loans, there are some things that you need to keep in mind.
Dealerships do not necessarily have a preference between someone paying cash and offering car loan financing for the vehicle, as the dealership will receive the same amount of money for the vehicle either way. They do often require a cash down payment in order to drive a vehicle off their lot.
What Credit Score Do You Need to Buy a Vehicle?
The average minimum for individuals who are purchasing a new vehicle is around 715, while used vehicle owners often have a credit rating that is hovering around 655. Lenders prefer a higher credit rating, as that is one indicator that the lender will be able to receive full repayment of their loan.
How Do Credit Scores Affect Financing?
There is a definite link between your credit score and the financing that you’ll be able to get — and the vehicle that you can afford. A lower credit score can mean that you’ll pay more for the funds that you need to borrow or that the lender will require a larger down payment.
While dealerships don’t have a strong preference between cash or car loans when you’re purchasing a vehicle, you may find that it’s easiest to make a cash down payment and then finance the remaining amount of your vehicle.
The finance professionals at Palmetto Citizens Federal Credit Union offer a range of financing options, and you’re sure to find one that fits your unique needs. Contact them today or visit one of their locations to learn more.