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Vehicle Spotlight: Financing a New Car vs. a Used Car | Ottawa, IL
Should you buy new or used?
That’s a classic car conundrum, and there’s no right way to answer. Both are viable options, and the only way to figure out which is best for you is by learning what sets these methods apart. Here, we’ll lay out the differences between financing a new car and financing a used car. Then, when you visit the Bill Walsh Auto Group in Ottawa, IL, you’ll know which of our inventories—new or used—will be best for your financial needs.
In almost all cases, a new car will of course be more expensive than a used one. For this reason, the loan itself will have to be larger in order to cover a higher price, whereas the loan needed for a used car will be smaller. In either case, the loan size will depend on how much money the buyer has to put towards a down payment. The more money buyers can pay up front, the less they’ll need to borrow and the less they’ll end up paying in interest.
Even though a new car will cost more, many times a new car loan will come with a smaller interest rate than what a used car loan demands. This is because lenders see new car purchases as a lesser risk than used car purchases. Additionally, new car loans often come with certain incentives from the manufacturer. These incentives are put into place to help dealerships move their new inventory. So, when searching for a new car, you might find deals like 0% financing for a certain period of time or a cash back rebate.
In lots of cases, financing a used car seems much more manageable because of the lower price. Plus, with today’s automotive market, most used cars can still offer plenty in the way of safety, features, design, and comfort. But, before you opt for the used car, it pays to compare the ultimate financing cost with that of a new car. In some cases you might find that you’ll spend what you thought you’d be saving on the higher interest of a used car loan. Crunch numbers and ask questions about interest and loan options before your commit to one option over another, and you’ll be sure to find the best financing value for your particular situation.