One of the first questions you must answer when looking for a vehicle is “should I get a new car or a used car?” In deciding the answer to that question, you will want to consider the differences between new car loans vs. used car loans.

A good place to start determining which way to go is LoanexFastCash, which is chock full of information about every aspect of financing your new vehicle. It also will help you connect with lenders across the country who wants to compete for your business.

But before you get caught up in the excitement of buying a car, take a moment to learn the differences between new car loans vs. used car loans.

New Car Loans

As you begin the process of figuring out how you are going to finance your new vehicle, you must first decide how much you can afford to spend and how much you will need to finance. Many financial institutions and websites, such as Edmunds.com, have calculators that can help you determine what you can afford.

You also can fill out an application at LoanexFastCash and get quotes from many different lenders in a matter of hours, which should help narrow down how much you can finance.

There are several advantages to new car loans vs. used car loans. You can borrow more money for a new car than a used car. New cars are often eligible for special interest rates, either from the dealer or the automobile manufacturer.

When buying a new car, you also may be eligible for a rebate of thousands of dollars, which can be used to decrease the amount you owe on the car even before you drive it off the lot — or you can get the cash from the rebate and put it right into your pocket.

Used Car Loans

Getting a used car loan is a bit more complicated than getting a new car loan. One reason is because it is often difficult to determine the value of a used car. On top of that, you must consider how much the used car has depreciated in value.

Because of this, lenders worry that the car, which serves as collateral for the loan, will not be worth enough to cover the remaining loan amount if you don’t make your car payments and the lender has to repossess the vehicle.

To get a used car loan, your lender often will want the approval of car you choose, sometimes setting certain requirements, such as only making loans on cars of a certain age or mileage.

The interest rate for a used car loan is also going to be a bit higher than the rate on a new car loan. That difference isn’t so much in today’s market, when interest rates are at an all-time low, but it is something to consider when deciding between new car loans vs. a used car loans.

Another thing to consider: The length of a used car loan is often shorter than a new car loan, which means your monthly payment could be higher than expected.