Buying a used car for less than $ 5,000
When you have bad credit and need a loan, $ 5,000 is usually the least you can borrow. This means that you may be able to finance a used car for less than $ 5,000 as long as the loan amount is more than taxes and fees.
Buy a car or finance a vehicle
If you don’t need a loan, a used car of $ 5,000 or less can take you from point A to point B, but for how long? It depends on how smart you shop. You can buy a car for less than $ 5,000, but if you have to finance, you usually can’t finance less than that.
If you need to get a loan for a cheap vehicle, know that the lowest amount you can usually borrow with bad credit is $ 5,000. Subprime lenders also have other requirements for the car, such as being under 10 years old and having less than 100,000 miles on it.
In order to ensure that your loan hits the $ 5,000 mark, the total amount borrowed must reach $ 5,000, including taxes and fees. This means that you can finance a vehicle that costs $ 4,000 if all associated costs add up to at least $ 1,000.
Likewise, if you are considering a vehicle that costs a few thousand more, but you have a large down payment, you can get away with financing only the $ 5,000.
What to look for in a cheap used car
Since new vehicles are built to last longer these days, it is normally possible to find an affordable used car that lasts and comes at a lower price. However, nowadays, with the shortage of chips affecting new vehicles and used cars leaving dealer lots in record numbers, you may need to shop more diligently.
Used cars are delivered as is, and there is no warranty once you have driven them out of the lot, unless you purchase one at the time of sale. It is possible to find a used car for less than $ 5,000, but you will probably be looking for older models with higher mileage. However, in some cases you may be able to find a used electric vehicle (EV) at a reasonable price.
You want to buy a make and model known for their quality and longevity, such as Toyota, Subaru and Honda vehicles. It is important to consult consumer reviews and used car price guides like Kelley Blue Book or NADAguides before you start shopping, especially when looking for a cheap car.
Make sure you get a vehicle history report and avoid cars that have had serious accidents in the past or have titles rebuilt. It’s also a good idea to know how the car has been maintained, so if you can see regular maintenance in its vehicle history report, you’re probably better off.
Certified Pre-Owned Vehicles, or CPOs, are the crème de la crème of used cars so to speak. It’s rare that you find a CPO under $ 5,000, but finding a CPO is usually a good bet for a more durable vehicle when it comes to used cars. Real CPOs are inspected and refurbished by manufacturer certified technicians and restored to the best possible shape before being returned to dealer lots for sale. What makes it a true CPO is the manufacturer’s warranty that comes with all CPOs. Often times, these cars are just out of a lease, so they’re only about two to three years old.
Dealer-certified vehicles may look similar to CPOs, but they are usually only inspected by the dealer and don’t have the peace of mind of a manufacturer’s warranty. They may have other benefits such as service performed at the dealership, but these cars are not the same as a real CPO. However, they can be a cut above the regular used cars in the field. You can also find some that are cheaper than a real CPO model.
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When you have bad credit, it’s a good idea to research an affordable used car to meet your needs and help you improve your credit with on-time payments. However, it can be difficult to know where to start when you think your credit is in the way.
TO Auto Express Credit, we know what it’s like to have trouble finding a car loan, and we want to help make your life easier! When you complete our fast, free, no-obligation auto loan application form, we get to work connecting you with a local dealership who has signed up with subprime lenders to help consumers with credit difficulties. Let us help you!