Buying a pre-owned car is a money-saving alternative to purchasing a brand-new one. The vehicle might also offer good value for money as it may include all the features that a new one offers at a fraction of the original cost. That said, a used car can still be a huge expense, for which one may have to plan and make arrangements. Fortunately, one can easily find a few ways to finance a second-hand car.

1. Personal loans
One of the common ways to finance a pre-owned car is to get a personal loan.  This is a straightforward loan , which comes at a fixed interest rate and terms dictating the loan tenure, the repayment schedule, and the monthly installment amount. Even if one does not have a regular job and payroll, one may be able to get a personal loan to buy a second-hand car as long as they meet the other eligibility criteria. A personal loan is typically unsecured, i.e., without collateral requirements. Because of such lenient terms, this type of loan usually comes with higher interest charges than other options. That said, this option is still worth considering as one can use the personal loan amount to even pay for other things, such as vehicle accessories, registration fees, or other home expenses. 

2. Auto loans
One can find many lenders today that offer car loans between €3,000 and €75,000 to qualifying applicants who want to purchase a second-hand car. One could check if they are eligible for such loans and confirm with the lender if they can get enough money to fund the car. One may even qualify for a discount on the interest rate if they meet certain conditions. For instance, one would require a paycheck of at least €600 and a pension equal to or greater than €300 to get low interest rates. That said, one will have to confirm these criteria with lenders, as they can vary from one financial institution to another. The application process for this type of loan is usually straightforward. One would have to fill out the basic application form online and submit all the documents a lender requires . Following document verification, the lender will determine if the one is eligible for the car loan and disburse funds.

3. Rentals
There are certain car rental companies and even financial institutions that allow one to rent and use cars for years. This eliminates the need for a down payment. The renter only has to make a monthly rental payment. This option is ideal for those who don’t want to worry about various responsibilities associated with car ownership. For example, the car rental company may cover fees associated with insurance, repairs, replacements, and taxes. The rental agreement would also cover travel assistance. 

4. Car lease
Another way to finance a second-hand vehicle is to lease or rent to own it. This allows one to buy the car over time. One has to make an initial deposit and pay a monthly fee for a specific period. At the end of the term, one can make a one-time payment and get ownership of the car. Alternatively, one can return the vehicle and pick a new one. Individuals can also continue to make monthly payments. Car dealerships usually benefit from finance, which means the initial price of a lease purchase is much lower than in comparison to buying with cash.

5. Trade-in
One could always trade in an existing vehicle to save money on a second-hand car. The value that one gets from the sale of the older automobile can be used to buy another pre-owned vehicle one wants . The option can even help cover the  down payment or other accessories one might want in their pre-owned vehicle.

6. Credit card
One can always finance their dream vehicle using a credit card, granted they have a good enough spending and credit limit. One could use the card to pay for a second-hand automobile and then pay the credit card bill later. Alternatively, one could get a credit card monthly payment option if the seller allows it. That said, a credit card purchase may come with added processing fees and other interest charges that one must consider.

Places to consider for financing options

• Banks typically have a few worthwhile options for financing a pre-owned vehicle purchase. They may offer pre-approved loans, which may also be open to those who are not on payroll. Alternatively, banks might even carry out credit checks to see if one qualifies for financing for the vehicle. That said, the decision to disburse any amount lies with the financial institution.
• Another place to consider for financing a second-hand vehicle is a dealership. A certified pre-owned dealership is likely to have attractive deals that will help one quickly finance a vehicle or make affordable monthly payments to get the vehicle later .
• Today, there are multiple nonbank financial companies (NBFCs) in the country that may offer instant loans to people to help them finance a car purchase. While such loans might come at higher interest rates, they may be open to borrowers who are not on payroll.