Which Can Be The Best Deal - New Car Loan Or Used Car Loan?
Buying a car is going to be one of the most expensive decisions of your life
. Choosing one should be done after a lot of thought and deliberation. When buying the costliest car is not an option and saving money is a priority, buying a used car can be a good idea for some. If you can not decide which to buy: a new car or an old car, read on.
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There are many things to keep in mind before you decide what kind of car you want, a new one or a used one. Few people can afford to buy a car without a loan, so that is something that is of utmost importance. Which can give you the best deal, a new vehicle loan or a used auto loan?
1> New car loans will always get you a lower rate of interest than a used car loan. The main reason for this is because the lender of a used car loan always fears of default payments. In case of lenders of new car loans, the price of the car is more; as such the rate of interest is lower.
2> The down payment of a used car is usually more than that of a new car of the same category.
3> The Annual Percentage Rates of a used auto loan is higher than that of a new auto loan.
4> You must know that a bad credit score will get you a higher rate of interest, right? Well, if you are in the market for a used car with bad or no credit, the rate of interest for your loan may just be higher. Lenders consider people with bad credit a huge risk and hence try to cover them by charging a high interest. This goes up further in case of used cars.
5> Your dream car may be too pricey for you to even consider buying it. But the same car that has been used for a year will cost you a lot less. You can have the car and yet not burn a hole in your pocket!
6> It is difficult to get financing for a car that is more than 5 years old. Getting a loan for a new car is easy.
Though buying a new car will always get you a better deal from the lenders than a used car, if money is short, buying a used car is probably a good idea. Following are a few tips you may need to get a used car loan.
1> First of all you should find out your credit score. Find out where you stand before you start looking.
2> There are many online lenders who are willing to give used car financing. Browsing online is therefore a good idea.
3> Negotiate well for as low an interest rate as possible.
4> Keep away from the middlemen. Strike a deal with the company itself. It will help you get a better deal for a used car loan.
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