If you’re considering financing a new or used car, you’re probably wondering, “What credit score is needed to finance a car?” It’s a fair question, considering your credit score plays a large role in whether or not you’ll get approved. Read on to learn more about credit scores and the impact they have on car financing.
During Q4 of 2018, the average credit score of borrowers who received financing for a new car was 718, as well as 659 for a used car. During Q3 of 2018, borrowers who received financing for a new car had an average credit score of 714, while those who received financing for a used car had an average of 655. Generally, the higher the credit score, the more opportunities are available for lower interest rates and fees. Credit scores are separated into the categories below:
Car financing is available, even to those with not-so-perfect credit. If you have doubts about your credit score and credit history, there are a few steps that can be taken to improve your chances of getting approved for a loan in San Diego, such as:
Simple interest loans give borrowers the opportunity to save in interest, but as with any loan, making payments on time is important. If you make a late payment, you could end up paying more in interest, meaning a lesser portion will go toward your principal. One late payment probably won’t throw you off schedule completely, but if it happens repeatedly, it could take longer for you to repay the loan. Not to mention, the added costs of late fees will make your loan more expensive to repay.
Mercedes-Benz of Escondido is here to answer your questions about car financing, such as, “What is a simple interest loan?” If you’re concerned about your credit score and the impact it’ll have on your auto financing opportunities, contact us to speak with one of our finance experts. We can also help you decide if you should finance through our dealership or with another lender. You’re also welcome to visit us near Escondido and San Marcos for one-on-one guidance when you’re ready to trade in your car for a new luxury ride.