Is it Easier to Finance a Used or New Car?

Whether you’re buying a used or new car, you’re probably thinking of financing your vehicle. There is some nuance that comes with auto financing and you may find that financing is easier depending on the vehicle you buy. So, is it easier to finance a used or new car?

To answer that question for Indianapolis, Plainfield, and Bloomington drivers, Andy Mohr Automotive is here with this comprehensive guide on auto financing today!

Related Post: Leasing vs Buying a Used Car

Why It’s Easier to Finance New Cars Than Used Cars

Financing cars is a part of the buying process. Lenders need to consider a variety of factors in order to determine what the best investment is. One of the things lenders will consider is the value of the vehicle based on its condition. New cars have a defined market value, but the value of a used car can vary depending on how well it was maintained and how high its mileage is.

For this reason, it’s often easier to finance a new car because lenders are able to predict the value of the vehicle more accurately if it needs to be sold. With used cars, lenders can’t accurately determine the actual value of the car, which can leave them guessing at whether it is a sound investment.

Another reason why it’s often easier to finance a new car is because there are often incentives applied to new cars to offer greater deals. This means that you can apply for a loan that lets you get a lower monthly payment on a car equipped with more advanced technology than what you might find with some used cars.

In general, drivers can expect greater promotional deals and a lower APR on new cars rather than used. However, if you want to find better financing offers, you’re going to want to make sure you’re providing a good down payment no matter which car you buy.

How Much Should I Give for a Down Payment?

At the end of the day, one way you can make financing easier is to provide a large down payment on your vehicle. This is money you provide to cover part of the value of the vehicle before you take out a loan.

While there’s no one golden number you should hit with your down payment, it’s a good idea to pay at least 20% of the car’s value. However, the more money you can provide, the better! With a larger down payment, the better the lease deal may be.

Apply for Financing with Us Today!

Now that you’ve taken a deep dive with us into the ins and outs of auto financing, we’d like to meet with you to help you get the loan you need. Just get in touch with one of our finance team members, and we’ll work to get you approved by a lender.

Whenever you’re ready to buy your next vehicle, just get pre-approved with us at Andy Mohr Automotive today!