Compare the total cost of a new car loan against a used car loan — side by side.
Compare the total cost of a new car loan vs a used car loan. See monthly payment, total interest and overall savings from choosing used. Free.
01 —INPUTS
Drive-away price of the new car.
Drive-away price of the used car.
Cash deposit or trade-in value. Same deposit for both.
New car loans typically have lower rates.
Used car loans often have higher rates.
Same term for both loans to compare fairly.
02 —RESULTS
New CarUsed Car
Monthly repayment586.98307.75
Total interest5,219.073,464.88
Total cost35,219.0718,464.88
Savings from choosing used
Monthly saving279.24
Interest saving1,754.19
Total saving16,754.19
Depreciation is usually the biggest cost of owning a car — not the loan interest. A new car loses thousands in value the moment you drive it off the lot, while a used car has already taken that hit. This calculator isolates the finance side: it compares monthly repayments, total interest, and total cost between a new car and a used car, factoring in the different purchase prices and interest rates each attracts.
Keep in mind that a used car may have higher running costs (repairs, maintenance) that offset some of the finance savings. Use this calculator alongside the car loan repayment calculator to test individual scenarios in more detail.
Common questions
Why are used car loan interest rates higher than new car rates?
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.
Does depreciation matter when comparing new vs used car loans?
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.
Is the new car warranty worth the extra cost?
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.