The loan works the same way whether the vehicle is new or used. What changes is the vehicle’s price and value, the offers available and the conditions a lender may attach.
| New vehicle | Used vehicle | |
|---|---|---|
| Price | Higher, so the loan is usually larger. | Lower for a comparable model. |
| Depreciation | Value typically falls fastest in the early years. | Some of that early drop has already happened. |
| Offers | Manufacturer promotions may be available through dealers. | Promotions are less common. Rates can be higher. |
| Lender conditions | Few restrictions on the vehicle itself. | Lenders may limit age, mileage or the length of the term. |
| Where you can buy | Dealers. | Dealers or private sellers. Not every lender finances private sales. |
Questions to ask about a new vehicle
- Is a promotional rate tied to a shorter term or to giving up a cash discount?
- What is the total cost with the promotion compared with the discount and an ordinary rate?
Questions to ask about a used vehicle
- Does the lender finance this age and mileage, and for how long a term?
- Is the sale through a dealer or private, and does the lender accept that?
- Is there an existing lien on the vehicle, and what does its history report show?
Whichever you choose, compare the total cost of borrowing rather than only the payment. The calculator lets you try both.