New vs used car financing
Compare the total cost of financing a new car versus a used car.
New vs Used
New vs used car financing
Compare the total financing cost of buying a new car versus a used car with different interest rates.
Side-by-side
New car monthly
$773Used car monthly
$401New car total interest
$6,399Used car total interest
$4,046New car total cost
$46,399Used car total cost
$24,046Savings summary
Monthly saving (used)
$373Total saving (used)
$22,353Interest saving (used)
$2,353Payoff timeline
5 yearsThe new vs used decision involves more than sticker price. Used cars typically attract higher interest rates (1-2% more), but the lower purchase price often outweighs the rate premium. A $20,000 used car at 7.5% can still cost less in total than a $40,000 new car at 6%.
Factor in depreciation, insurance costs, and warranty coverage alongside the pure financing comparison. This calculator focuses on the financing cost difference to give you a clear apples-to-apples view.
Frequently Asked Questions
- Are interest rates higher for used cars?
- Generally yes. Lenders charge higher rates for used cars because they depreciate more and represent higher risk as collateral. The rate difference is typically 1-2% higher than for new cars.
- Is it cheaper to buy new or used?
- Used cars cost less upfront but may have higher interest rates and maintenance costs. New cars depreciate faster but come with warranties and lower financing rates. Use this calculator to compare the total financing cost.
- How does depreciation affect the comparison?
- New cars lose 15-20% of value in the first year. A used car has already absorbed this initial depreciation, making it a better value proposition if the rate premium is modest.