Choosing Between a New and Used Car
Although as a kid you are perfectly content to let your parents drive you around, at some point, you want the independence which allows you to transport yourself. As an adult, you might get in a wreck, have your car break down, or simply get tired of the model you are driving. At this juncture, you might realize that it is time to go car shopping.
The first question you have to ask yourself before buying a car is this: Do I need a new car or a used one? In order to find the answer you might want to think about the advantages to each option.
Unless you are absolutely rolling in money, a new car might require you to take out an auto loan. A good credit history gives you a better chance of having your application accepted and getting a lower interest rate. Making your car payments on time will help boost your credit rating as well. As the economy continues to struggle, auto stores have included greatly reduced purchase prices. However, The Wall Street Journal tells us that depreciation of newer vehicles is a major risk, unless you are planning on keeping them for more than five years. Is it worth it for that new car smell?
Buying a used car typically gives you a better value than a new car. Prices are lower because of depreciation from age and use. However, used car dealerships do not typically offer the cash incentives that you get with a new car. Auto loan interest rates for used cars will also be slightly higher because of depreciation. Lenders want to make sure they will be able to make money off their investment if you default on the loan. If you are not willing to pay an extra couple thousand dollars for the newest model, a used car is probably the right choice for you.
After you make your decision, look to Cincinnati Banking Rates for the most competitive and recent auto loan rates to finance your car.