Buying a used vehicle?

Question

I found my daugter a good used honda. It is an Accord 1998 with 85,000.00 on it. I have a 2006 Accord I financed with same dealer last August. I did a new application for my daugter's honda and they said that they could not finance because of the age and I should go to my bank. Has anyone ever heard of this? I am on time with my payment to Honda every month.

Answer 1

The car you are looking at is considered a "cash car" by most dealers because of it's age and miles. It does not qualify for most finance programs that the manufacturer or capture banks that provide services. A personal loan is the only thing that will cover a car of that type and age hence the personal bank question .

Answer 2

Why would you buy from a dealer, get a cheaper car like a 96 civic and pay cash from a private person. Get it checked be a mechanic before to buy. Can save you $1-3,000.

Answer 3

All lenders have this, especially "dealer financing" which is really just the dealer being the broker for a lending company.  

Usually 3-6 years is the oldest they will go.  Loans are all about risk.  There is higher risk the car will have major problems, higher risk it will not be junk before the loan is up, and if you default and it is repoed, an older car is harder to move to recoup costs.  Also, you look like a higher risk if you have to finance a $3,000 car instead of having trade or cash.

Your best bet is getting a personal loan from your bank at 1-2 year terms.  The rates may be a few points higher, but it will might be easier than qualifying for an auto loan for an old car.  If you are paying it off in under 2 years, a few interest points will not affect the total amount you are paying enough to be noticeable.