The decision of buying a new car and a used car is a big one. Both purchases come with their own set of unique benefits. Even the finance options are a tad bit different between the two.

Regardless if you have your mind made up on a new car or a pre-owned car, it never hurts to know how these two options affect financing. Sometimes, some drivers even change their minds understanding the differences. Either way, you can get both a new or used car at Car Castle, NY.

How Does a New Car Affect Financing?

With a new car comes both the option to take out a loan and the choice to lease. When drivers decide to take out a new car loan, the total amount will be higher as the car is brand new. But, each monthly payment is one step closer to not having to pay for the car again. Once the vehicle gets entirely paid off in full, you are free from car payments until you get another new car loan.

One thing worth noting about new car loans is that while the total amount is higher, the interest rates tend to be on the lower side. You might also have got some deals for purchasing the new car. For example, sometimes dealerships have no money down financing or cash rebates specials that can also play a role in your decision.

These additional factors are something drivers want to pay attention to when on the fence about a new or used car. The best way to make the decision is to create a comparison with your unique situation in mind. Everything from your credit score to what you need in a car should get considered.

How Does a Used Car Affect Financing?

Some people are set on getting a used car instead of a new one. When drivers opt to do this, they face the opposite situation. They still have a car loan, but the amount is significantly less than the amount for the new vehicle. But, in this situation, it also depends on the used car you purchase. Some will cost you more than others.

Drivers, again, should also consider other factors before jumping into purchasing a vehicle. One factor, in particular, is interest rates. You might look to be saving a lot of money initially, but the interest rates included in the monthly payments might end up costing you more than you originally had thought.

Instead of low-interest rates, used vehicles tend to have high-interest rates as many lenders see it as an increased risk. The older a car is and gets, the lower the value on it is going to be. Thus, lenders get concerned that the value of the vehicle will depreciate below the loan amount. With high-interest rates, they can trust that they will get some of the value back.

Should Drivers Consider Leasing Their Vehicle?

Your primary and secondary thoughts in the vehicle purchasing process should be if you love the vehicle and how you should finance it. But, in this thought process, a lot of drivers forget that leasing is also an option. When you lease a car, you get the luxury of lower monthly payments and lower servicing costs. However, by having this, you forfeit having this money go towards owning the vehicle.

Similar to the decision between buying a new or used car, this one also requires making some comparisons. Depending on whether you want a new or used car and how much you want to spend will help you decide if leasing is right for you.

Find Your Ideal Financing Option at Car Castle NY

Financing a car is something everyone needs to do to get a new or used vehicle. However, the process doesn't need to be challenging to navigate with the right dealership helping you out. At Car Castle NY, we are here to help you find your dream car and find the perfect financing option for you. Come by today to learn more about what finance options we have for you!