Financing a vehicle is a viable option for drivers in all financial situations, but the type of vehicle can come into question. Is it better to finance a new car or a used model? While the outcome is the same, the perks and advantages of financing a new car versus a used car may vary. Here’s a quick rundown of some of the benefits of financing a new or used car.
Financing a New Car
New cars are often subject to a whole host of manufacturer-provided compensation and discount programs. These programs can include everything from a major sale to money off the full sticker price. Incentives, such as lower financing rates, are available as well.
Notably, many automakers offer annual percentage rates on specific models and model-year vehicles. While the rates are usually a non-negotiable deal, they often depend on the buyer’s credit history and income, among other variables.
Financing a Used Car
Financing a used car comes with numerous different benefits that may make it a better choice for those in a certain financial situation. Used cars don’t depreciate as fast as new cars, which tend to lose more than 20 percent of their value when they leave the lot under new ownership. As a result, a used car will retain its value and reduce the chance of owing more than the car is worth.
Since used cars cost less to begin with, loan terms are often shorter. That means buyers can pay off the car quicker than they could a new model.
Stop in to see the financial experts at Tom Hodges Mitsubishi for more information on financing your next vehicle!