Financing is a major part of buying a car, no matter whether it’s a new or used model. Check out the following differences between financing new and used cars, and then stop in at J.B.A. Mitsubishi to find your next vehicle.
Typically, new cars tend to have lower interest rates, and some manufacturers offer special rates as incentives for consumers to buy new cars. On the downside, new cars cost more, resulting in longer financing periods, which can add up to some serious money if the loan is drawn out for five or six years.
To make new cars more affordable, some automakers may offer bonus cash, or money off a vehicle’s sticker price. A sales event can also include benefits like special rates, too.
While used cars tend to have higher interest rates when compared to new models, used cars don’t depreciate nearly as fast. Since used cars have already had one owner or more, used cars don’t lose a chunk of their value once they are transferred to a new owner. As a result, you can gain equity quicker and avoid being upside down on the loan. Thanks to lower prices, used cars tend to have shorter loan terms as well.