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Financing a Used Car With Over 100K Miles

Financing a Used Car With Over 100K Miles; Planning to buy a used car with mileage over 100K? Learn about how to finance it from Lantern by SoFi.
Susan Guillory
Susan GuilloryUpdated March 10, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you’re thinking about buying an older car, you may want to explore your options for financing a used car with over 100,000 miles on it. This can often be a challenge, since many lenders may not be willing to finance an older car, given the increased odds that it will have mechanical issues at this point in its life.That’s not to say, however, that high mileage financing is impossible. But it may come with higher interest than you would pay for a vehicle with fewer miles on it. And you may need to shop around to find a lender that doesn’t have mileage restrictions on auto loans.Car loan financing is the most common form of automotive financing — far more common than leasing or buying a vehicle with cash outright. Finding a car loan that can be used for financing a used car with over 100K miles, however, is not exactly an easy endeavor. Below we highlight the drawbacks of buying an older car with an auto loan.Recommended: 12 Questions to Ask When Buying a Used Car

Can You Finance a Car With Over 100K Miles?

If you’re looking for a secured auto loan, financing a car with over 100K miles can be difficult but not impossible. Some lenders may help you finance a car with over 100,000 miles. But you’ll probably want to weigh your options carefully and understand the drawbacks, which we will discuss in the next section.Here are a few questions to ask yourself to determine whether financing a used car with over 100K miles is right for you:

How Long Do You Plan to Keep the Car?

If you plan on having the car for only a few years, it might not be worth it to finance the purchase with a loan, given what you’d pay in interest over the short term. Financially, you might be better off buying a newer car if you qualify for good interest rates on an auto loan.

How’s Your Credit?

If your credit isn’t great, you might be buying an older car because you think you can’t qualify for a car loan for a newer vehicle. But borrowers with bad credit may qualify for new and used car loan financing, although bad credit may negatively impact the interest rate you get.Here’s the evidence:
  • Automotive financing data released by Experian in March 2023 shows a number of borrowers with bad credit got approved for car loan financing in the fourth quarter of 2022.
  • Borrowers with deep subprime credit scores between 300 and 500 had an average used car loan rate of 20.62% compared with 5.99% for borrowers with super prime credit scores between 781 and 850.
  • Borrowers with deep subprime credit had an average new car loan rate of 13.42% compared with 4.75% for borrowers with super prime credit.
  • Among all borrowers, the average loan rate for new car loans stood at 6.07% compared with 10.26% for used car loans.
Borrowers with any credit score can qualify for auto loan financing. Comparing costs for cars of different ages and/or with different amounts of mileage can help you find the right car financing deal for you.

Is Financing Your Only Option?

If you currently have a car, especially one that’s worth more than the car you want to buy, you could look not only at financing, but also at the merits of refinancing vs. trading in your current car.You could trade in your current car to buy the car you want. Ideally, that would leave you with little to no balance owed after the trade-in. If your current car has a lien on it, you may consider auto refinancing for a lower monthly payment rather than buying a used car with over 100K miles on it.

The Drawbacks of Financing a High-Mileage Vehicle

Now let’s talk about those drawbacks to buying a high-mileage car with an auto loan:First, expect to pay more in car loan finance charges for a high-mileage used car than you would for a newer car. Lenders have to mitigate their risk, and loaning money for a car that might fall apart in a few years is risky. But if you look for a vehicle that has the reputation of running well beyond 100,000 miles, you may have a better chance of getting approved for financing.Understand, too, that you may run the risk of this being an upside-down car loan. That is: you may take out a loan now to buy an older car, and then that car may rapidly lose its value, putting you in a situation where you owe more than the car is worth.

Shorter Loan Terms

If you’re looking for ways to reduce what you’ll pay over the life of the loan when financing a used car with more than 100,000 miles, consider looking for a shorter-term loan. Yes, you will pay more each month, but you may pay less in interest because the loan will generally be paid off faster compared with long-term auto loans. That, in the long run, may save you money.Some lenders may penalize you if you pay your car loan off early. Whether you have a short term or long term, paying off your car loan in full gives you 100% equity in the vehicle.Shorter loan terms can put you on a faster path to gaining 100% equity in the car you own. What happens when you make the final car loan payment? You become free and clear on your vehicle. You can either continue driving it with no car payment or sell your car for something else.

Research To Find Car Models That Typically Last a Long Time

These days, many cars last far beyond that 100,000-mile benchmark, though some will last longer than others. Before buying an older car, do your homework to find a make and model that has a good reputation for withstanding time and miles.You may also research what it will cost to replace or repair parts that commonly fail after 100,000 miles. Replacing a transmission on a high-end luxury car will likely cost more than doing the same on a budget sedan, so make sure you’re factoring in all the costs you’ll have, not just your loan payments.Recommended: What Is the Average Maintenance Cost for a Luxury Car?

Test Drive the Car Before Buying

It might seem silly to recommend that you test drive before buying a car with over 100,000 miles. But in this day and age, it’s easy to order a car online and make the purchase without ever having touched the vehicle. While this can be convenient, it won’t alert you to any possible rattles in the engine when you drive it or trouble accelerating on the highway, for example.Car salespeople are sometimes reputed to push you into buying a car before you’ve had time to really get to know the vehicle. Here are some steps you should take while you’re contemplating your purchase of a car with more than 100,000 miles:
  • Don’t allow anyone to rush you.
  • Test drive the vehicle.
  • Do your own full inspection to look for scratches and dings.
  • Take it to a reputable third party mechanic to give it a once-over.
  • Carefully review its CARFAX® report.
Take all these steps whether you buy the car from a car dealership or a third party. If you’re going to pay extra in interest for this vehicle, you want to be pretty certain it’s going to go the distance for you.

The Takeaway

Financing a used car with over 100,000 miles is possible. Some lenders may also refinance car loans for borrowers with high-mileage vehicles. Refinancing may provide borrowers with a lower interest rate or lower monthly payment.If you’re looking to refinance your car loan, Lantern by SoFi can help. Simply by filling out one online form, you’ll be able to compare auto refinancing options from multiple lenders.Find and compare auto loan refinance options with Lantern.

Frequently Asked Questions

Can you finance a vehicle that has over 100K miles?
Should you buy a used car with over 100K miles?
How old can a car be if you want to finance it for 60 months?

About the Author

Susan Guillory

Susan Guillory

Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
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