Can I use my paid-off vehicle as collateral when applying for a loan on a new car?
Yes, you certainly can do this. However, consider the costs of doing this before you go ahead. First of all, the bank may have a lower interest rate for a newer vehicle. While you have the loan, you are obligated to have a full coverage insurance on this vehicle. Will it be worth it? You may also want to have a full coverage on your new vehicle as well. Second, consider these increased insurance costs. Third, will the loan proceeds be enough for you to purchase the new vehicle? If not, there is no point of doing this.
Well for starters i was taught never to use a paid off vehical that way. If you are wanting to better yourself then that’s great but why risk your paid for vehicle in the process? If anything were to happen where you weren’t able to pay of your new financed ride you will be without if your old ride goes with it. If you can’t afford to get the new car withouth risking your old one then you are not ready just yet to get a new one. Why not try working harder to get the new one without using your old one. Make money for down payment. It is always good to upgrade to better things as time goes by but it is also wise to be in a position to keep those better things. You can look around more. There are places that have special financing for people with no credit or bad credit. If your parents have credit cards that they pay on time every time, they can put you on their account as a cardholder, if they keep the card and use it themselves now and then it will go on your credit as well. That will
