Is it better to finance an older or newer car? (2024)

Is it better to finance an older or newer car?

It may be easier to secure a loan for a new car than it is for a used car, and new car loans often come with lower interest rates. Used cars can be a good fit if you're on a budget and they generally cost less to insure; however, interest rates for used car loans are often higher than for new car loans.

What's the oldest car you should finance?

Typically, a bank won't finance any vehicle older than 10 years, even if you have good credit. If you don't have great credit, you may find it difficult to finance through a bank, even for a new car.

Does the age of a car affect financing?

However, lenders and banks typically follow common guidelines, especially as it relates to age and mileage. For example, you usually can't finance a used car older than 10 years with a five year loan. Similarly, you might not be able to finance a car with 150,000 miles for more than three years.

Are older cars harder to finance?

Financing an older car can be a viable alternative for some car shoppers, although it might not be as simple as financing a new one. Getting a loan can be harder, interest rates could be higher, and operating costs have the potential to offset any initial savings.

Is it smart to buy an older car?

Additionally, maintenance costs can quickly add up as cars age. Parts are harder to find, and labor is more time-intensive. If these concerns make you uneasy, avoid cars over 20 years old. This rule of thumb may help ensure your vehicle choice is still safe, reliable, and affordable.

Is a 10-year old car too old?

Cars over 10 years old can still be reliable. Most vehicles can last well over a decade with proper care and maintenance. In fact, the average car on U.S. roads is now 12.5 years old, according to a study from S&P Global Mobility. Furthermore, a car doesn't really stop depreciating until it hits that 10-year mark.

Why are older cars more reliable?

Classic car proponents argue that older cars were designed to last a long time with parts that can be fixed or replaced easily and inexpensively. New cars are filled with electronics requiring special expertise and diagnostic equipment when they malfunction.

Why won t banks finance older cars?

If you default on the loan, the lender might not recoup their money by selling the car. Reliability Issues: Older, high-mileage cars are often more prone to breakdowns and repairs. Lenders see them as a higher risk because if you're spending money on repairs, you might struggle to keep up with loan payments.

How old of a car should I buy?

A 2 to 5-year-old vehicle is often considered the “sweet spot” for used car purchases, but be sure to do your research and consider all relevant factors to make the right choice for your needs and preferences.

What bank has the best auto loan rate right now?

Who has the lowest auto loan rates?

How old of a car will Capital One finance?

Capital One Auto Finance only refinances cars, light trucks, minivans and SUVs that will be used for personal use. Vehicles must be no older than 10 years and have an established resale value.

Is it cheaper to buy an older car?

Getting the same model you want a few years old could save you a couple of thousand dollars. Lower insurance costs and fees: Many pre-owned cars carry lower insurance rates, titling fees and sales taxes. You may save both on the lot and over the car's life. Slower depreciation: Used cars also depreciate much slower.

What not to say when buying a car?

How many miles is too many for a used car?

Often, 100,000 miles is considered a cut-off point for used cars because older vehicles often start requiring more expensive and frequent maintenance when mileage exceeds 100,000.

What is the best mileage to buy a used car?

There's no rule to how many miles on a used car is too much, but by attempting to stick to the 12,000 miles per year rule is a great place to start. Find out how old the car is, multiple the number of years by 12,000, and if the number on the odometer is significantly higher than that, some concern might be warranted.

Do Miles really matter on a car?

A car's life isn't determined by miles driven.

Mileage is just one indicator of a vehicle condition. Theoretically, a vehicle that has covered more miles has more wear and tear, but a car with 60,000 miles on the odometer can easily be in worse shape than one with 120,000 miles.

Who makes most reliable cars?

Lexus ranks highest overall in vehicle dependability for a second consecutive year, with a score of 135 PP100. Among premium brands, Porsche (175 PP100) ranks second and BMW (190 PP100) ranks third.

Is it bad to drive a 20 year old car?

It's a statistical fact that cars become less safe to drive as they age. According to the National Highway Safety Administration, the driver of a vehicle that's 18 years old or older has a 71 percent greater chance of dying in a bad car crash compared to a driver who drives a three-year-old car.

Is car age or miles more important?

In conclusion, while it's a good idea to consider both the age of a vehicle and the mileage on the odometer, how it was maintained is the key. A 10 year old car with 100,000 miles may have received more maintenance and upkeep then a 5 year-old car with 50,000 miles.

Why newer cars are better?

Newer Vehicles Have Way More Parts

New cars have multiple computers, wiring harnesses, cameras, and more. All of these parts make for better vehicles that are safer to drive – but they also mean there's a lot more that can go wrong with a new car versus an old car.

Why do I prefer older cars?

It's not about efficiency and speed, but about the experience, style, exclusivity and craftsmanship, all of which are universal and timeless. Classic cars not only appeal to car lovers, but also to lovers of engineering, design, art and history.

What is a good interest rate on a 72-month car loan?

An interest rate under 5% is a great rate for a 72-month auto loan. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.

Is 72-month car loan bad?

Because of the high interest rates and risk of going upside down, most experts agree that a 72-month loan isn't an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go. You can learn more about car loans here.

How long should you finance a car?

Even though the majority of car buyers are going with long-term car loans, is an auto loan of 72 months or more a good idea for you? NerdWallet recommends financing new cars for no more than 60 months and used cars for no more than 36 months.