New vs Used Car Loan Calculator

Lenders view used cars as higher risk because they are more likely to have mechanical issues, depreciate unpredictably, and be harder to value accurately. A used car is also less appealing as collateral. The rate difference is typically 1% to 3%, though it varies by lender and the age of the vehicle. Some lenders specialise in used car finance and offer competitive rates for cars under a certain age or mileage.

Depreciation is often the single biggest cost of car ownership — more than loan interest. A new car can lose 15% to 25% of its value in the first year and around 40% to 50% over three years. A used car has already absorbed that initial depreciation. When comparing new vs used, the purchase price gap already reflects some depreciation, but you should also consider that a lower-priced used car may depreciate more slowly in dollar terms.

A new car warranty — typically 3 to 7 years in Australia — provides peace of mind and caps your repair costs during the warranty period. Whether it is worth the premium depends on the reliability of the used car you are considering, its service history, and the remaining factory warranty if any. Some buyers value the warranty highly; others prefer to save the purchase price difference and self-insure against repairs. The calculator shows the pure finance comparison — factor in your own value for the warranty.