What happens when you finance a used vehicle?

By Product Expert | Posted in Financing on Wednesday, June 26th, 2019 at 12:14 pm
Pen resting on financing agreement next to vehicle keys

Payment and ownership specifics with used vehicle financing

Buying a used car, truck or SUV is generally a rewarding experience, as it gives you the chance to upgrade your current model into something more advanced, powerful, beautiful, or in some cases, all three. If you don’t have the money up front to pay for your desired car outright, financing is always an option here at our dealership. So, today Barlow Motors will take you through the payment and ownership specifics with used vehicle financing to help you come prepared!

How to apply to purchase a financed vehicle

Before you sign off on the dotted line, we’ll first run your credit history and use that score to determine the best repayment plan for your situation. Obviously, having a higher score is better, as it can generally lead you to lower APR rates and, in some cases, a lower monthly payment in total.

From there, we’ll get in touch with financial institutions around Alberta and they’ll “bid” on your model based on your credit score and potential ability to repay in a timely fashion. There’s a good chance that some bank will offer to pay for your model on the same day you apply for financing, so you have nothing to worry about – of course, the odds of this happening are much higher if you opt to make a down payment on your car.

White 2019 Nissan Frontier in parking space

Orange Volkswagen Tiguan driving on city street

Who owns your vehicle when you finance it through a dealership?

This is where the confusion sets in for many consumers – until it’s fully paid off, the bank that you’re financing through is sort of a co-owner with you. Your name will be on the registration and insurance plan, but you’ll have to list your bank as a lienholder on the latter. This is because a new or used vehicle is a collateral asset, meaning that if you can’t pay it back, financial companies have every right to repossess it.

How to pay off a vehicle that is financed

In today’s interconnected world, there are more options than ever to pay back the cost of your vehicle. The bank that bought your model will send you a repayment package in the mail about a week after you sign off, and you can repay every month with cheques, credit, or by transferring money from your current chequing account to the loan account that your bank has set up. In most cases, there will be no penalty for repaying more than you need to; that’s always a great idea if you come into some money!

Read More: Should I buy a sedan or SUV?

Test drive a quality used vehicle at Barlow Motors in Calgary AB

With high-quality models ranging from brands like Nissan and Volkswagen to Cadillac and BMW, there’s something for everyone here on our Barlow Motors lot. Contact our sales team today to schedule a test drive or apply for credit approval!

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