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Difficult Car Loans For Bad Credit Leads To An Increase In Used Car Values

While many new cars are being sold at a substantial discount right now either through incentives, or just a reduction in sticker price, many used cars have seen a pretty sharp upturn in price as the reduced credit scores of the average American has left many unable to buy a new car and instead are seeking the cheapest car they can reasonably live with.

This has caused car quotes for used cars in the $10,000 to $25,000 range to go up in value.  I have considered my Mini Cooper’s resale value and it is high enough that I may sell my car.  Used car loans often don’t require the purchaser to have as high of a credit score because the initial price, and the price when the car drives off the lot is less of a differential.

A new car can lose 30% of its value when it drives off of the lot.  A used car often only loses 20%, and while this might not seem like a huge difference, in the world of used car finance a scenario where the user is only putting 10% down this is the difference between 10% risk and 20% risk for the lender if they have to reposes the car.

If you are searching for a great deal in cars at this price range check Hertz Car Rentals which sells its cars after about 2 years of service with much of the warranty still remaining.  While these cars typically are short on features you can be certain that they have had all of their scheduled maintenance, and in most cases are lower mileage cars than you’d find at a dealer. 

Another advantage of buying a car from a rental car company is that you can often rent that same model car for a weekend as an inexpensive way to tell if you will like the car for a long time.  Something that is harder to do with a new car where you may not be able to get the same car for an extended test drive.  Check online for car rental coupons and other car rental deals to make this even more cost effective.

-- Brandon Wirtz

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Filed in: Autos