The car has shifted from luxury good to necessity one during recent times. Manufacturers have embedded many technical specifications and features to comfort the customers in the competitive market. The price of the car vary according to the brand and make you choose to purchase. Every brand in the market has released the car for every segment of the population. Car loan becomes a mandate for the people to own a car because they choose the model and make of the car according to their current lifestyles which are always above their income levels. When you think of going with auto loans to purchase a vehicle, it is advisable to compare new car loan and used car loan and make an informed decision.
Compare Between new/ Used Car Loan
Many banks today offer new loans and used auto loans based on their specific requirements. Comparing two types of loans will help you decide the best choice that leaves you in the comfort zone while repaying the loan.
When should go for a new car loan?
The demand for new vehicle loan is high when compared used one because the satisfaction of owning a new car can never get old. People love to buy a car with new features, different models, manufacture’s warranty without the history of maintenance issues. When you don’t want to compromise on these factors while buying a car, the new loan could be your option.
A new car loan will have low-interest rate when compared to used one but, financing period for these new cars is long as they have more lifetime.
Some automakers offer a discount on the sticker price of the new vehicle to gain the customer in the competitive market. Lower the purchase price, lower will be the loan amount. The finances you pay towards the loan tend to be low as well.
Year end sale season is the best time to buy a new car. You will be benefited with a range of incentives and bonus cash from the manufacturers which will eventually reduce the auto finance amount taken from the lender.
Used car loan
A used car loan can be your choice when you cannot compromise on the model of the car and cannot afford for the new one. Even this used car loan has many benefits.
The new vehicle is subject to depreciation every year. When you purchase a used vehicle with the help of the loan, you might be lending less to purchase the car when compared to the new one. The loan amount taken by you will be less, so will be interest rate and you will never end up in owing more than a vehicle is worth.
Short loan terms
Used car loans will have short loan terms when compared to new ones. Though the interest rate on these loans is high when compared to new loans, the accumulated interest you pay here is comparatively low.