New vs. Used Cars: What’s the Best Option for Your Auto Loan?
If you're planning to finance a car in 2025, one of the biggest questions you'll face is whether to buy a new or used vehicle. Each option comes with benefits and trade-offs, especially when you're applying fora non-prime auto loan.
This guide will help you weigh the pros and cons of both so you can make the best decision based on your financial situation and driving needs.
1. Price and Monthly Payments
Used cars typically cost less than new ones, which mean slower loan amounts and more manageable monthly payments.
If you’re rebuilding credit or sticking to a tight budget, a reliable used car can help keep your debt-to-income and payment-to-income ratios in check.
2. Interest Rates
New cars usually qualify for lower interest rates, but only for prime borrowers. If you’re applying for a non-prime loan, the rate difference may be minimal.
In some cases, the lower price of a used vehicle can offset the slightly higher interest rate.
3. Depreciation
New cars lose value quickly, often 20–30% in the first year. Used cars depreciate at a slower rate, which helps maintain better loan-to-value (LTV) ratios.
A stable LTV can improve your approval odds and reduce risk of owing more than the car is worth.
4. Insurance Costs
Used cars typically cost less to insure than new vehicles. This can save you hundreds of dollars per year, which is especially important if you’re financing with a tight budget.
5. Maintenance and Reliability
New cars come with manufacturer warranties, which reduce out-of-pocket repair costs for the first few years. However, modern used cars(especially those under 5 years old) are often just as reliable.
Consider getting a certified pre-owned (CPO) car or having a used car inspected by a mechanic before purchase.
6. Vehicle Selection and Features
New cars offer the latest features in safety, fuel efficiency, and technology. If those are a top priority, you may want to go new.
Used cars, however, offer more variety and better value if you're willing to forgo the latest updates.
7. Approval Flexibility
At NuFin, we work with dealers and borrowers to help get deals approved, regardless of whether the car is new or used. We evaluate the value of the car, your income, and loan structure to create a path to approval.
NuFin Helps You Finance the Right Car for Your Needs
Whether you choose new or used, NuFin provides flexible financing for customers in all credit situations. Our team works closely with you and your dealership to ensure a smooth approval process and fast funding.
Visit nufin.com/customers to get started today.
No SSN required. No credit pull. Just smart, simple auto financing.