Is It More Expensive To Finance A Used Car Than A New Car?

Used cars are not getting any cheaper, partly because financing a used car can cost more than a new one. This mostly comes down  which are higher for used cars . .

.  You'll likely have a smaller monthly payment on a used vehicle, but if the interest rates are higher and the loan term is longer, the total cost might not be much lower than financing a new car. This is why you should always consider the annual percentage rate (APR) to judge how much a car will cost in the long term.

 That means quicker repayment, but that's not always better if you're on a tight budget.

Lenders don't just give better interest rates on new car loans out of generosity; they're protecting themselves.  . That's why new cars qualify for lower-risk, longer-term loans.

Used cars are a whole other story. The vehicle could have been in an accident, poorly maintained, or simply worn down. Even if you have a great credit score, . They build that risk into the rate they offer.

The car's resale value also comes into play. .

Whether you're financing new or used, the amount you pay comes down to more than just the car. Your credit score, loan term, and down payment play huge roles. . If it's low or average, a new car might come with more favorable financing.

Always get pre-qualified through multiple lenders before you head to the dealership. .  

. And while longer loan terms mean lower monthly payments, they also increase your total interest. A shorter loan might cost more each month, but you'll save in the long run.

For used cars, . Those add up. But you can still come out ahead if you get a good deal on a well-maintained car and secure a decent rate. Just make sure the math works for your budget, not just your monthly payment. Also, make sure to follow these 6 steps after you buy a used car.