Everyone is looking to get a good deal on their next car purchase. That’s because cars are an expensive item to purchase but quickly go down in value over time. One of the most popular ways to save money on your car purchase in the digital age is bidding on various car auction sites to find the best deal. While there is a competitive component to this method of car shopping, many people find that they’re able to save thousands of dollars shopping for cars online instead of having to contend with a dealer and sales tactics in person. One thing you might be wondering when shopping online is whether or not you’ll qualify for financing. Here’s everything you need to know about how to get financing when purchasing a car from an online auction.
An auction is different than a dealership
One thing to note before you go to a website to buy your car is that buying a car from an auction is different than buying a car from a dealership. At a dealership, you can apply for special financing ahead of time or get pre-approved for an automotive loan from your local credit union before you make a deal. With an auction, you must be able to pay for the car in cash right away. That being said since online car auctions are digital, most people pay for the cars they’ve won using a credit card. This opens you up to a few options when it comes to paying for your vehicle.
Alternative ways to finance your vehicle
While you may not be able to get a traditional automotive loan when you buy a car from an online auction, that doesn’t mean you necessarily need all of the money to pay for the vehicle upfront. If you have a good credit score, you may be able to qualify for opening a new credit card with a low APR and a high limit. This is one way that you could look at financing your car purchase since you could charge it on a card specifically opened up for the sake of buying a new automobile. If you do plan on opening a new credit card to buy a car online and have some advance notice that you’ll be shopping for a car in six months, be sure to work on raising your credit score beforehand so that you can secure the best deal. Make sure to pay down any other debts or credit cards you might have since your credit usage accounts for 30 percent of your score. You’ll also want to make sure you are paying your bills on time, as this affects your score, as well.
Do you even need financing?
Another fact to consider when shopping for a car from an online car auction is whether or not you even need financing in the first place. If you take a look at a car repayment calculator, you can run some numbers to determine how long and how many monthly payments you’d be making if you took out a loan in the first place. The alternative to financing a car with a loan or credit card is just saving up enough money to buy a car outright. While that’s a tall order when it comes to buying from a dealership, at a website like Auto Auction Mall, it’s much more realistic. That’s because online car auctions offer a broad range of vehicles in various conditions and the ability to purchase them for lower than their current value thanks to various bidding strategies. There’s nothing wrong with driving a $3,000 or $5,000 vehicle if it runs well, and in an online auction, you may be able to get a car like that for several hundred dollars less.
Keep this in mind as you approach your search for the right car for you, and you may be surprised at what deals you can find.