Published on December 7, 2022
New vs Used Car Loans: What Is The Difference & Advantages?
When buying a car, there comes the consideration of choosing between a new or used car. If this is going to be your very first car, the possibility of owning one soon can be really exciting. However, before running off to your nearest dealership to pick out the car of your dreams, there are quite a few aspects you would have to factor in first. Predominantly, you need to know whether you can afford the car, used or new, with your current financial situation.
Buying a car goes beyond shopping for a vehicle, it entails looking for the best way to finance it as well. Unless you have a stack of cash available, the purchase of your car, new or used, can only be completed through a car loan. Now, between a new and used car loan, what differences and advantages are there? Let’s find out!
Learn More: The Pros & Cons Of In-House Car Loans
Differences Between New and Used Car Loans in Singapore
While both these loans may look similar on the surface, there are several notable differences between a new car loan and a used car loan that may affect your buying decision.
1. Lower interest rates
Breakdowns and other risks are relatively low when buying a new car. Since they also cost more and are still under warranty, banks and other financial institutions can afford to charge you a lower interest rate.
With a new car loan, you get a choice from a wide variety of new makes and models, equipped with the latest features and technologies that will surely enhance your driving experience.
Advantages of Used Car Loans
With a used car loan in Singapore, the benefits are as follows:
1. Small Loan Amount
Used cars are known to cost thousands less than their brand-new counterparts. Since the price is lower, the loan that you apply for would also be smaller, making the car an affordable option for many.
2. Slower Depreciation
Unlike new cars that depreciate as soon as they leave the showroom, used cars would have already gone through its major depreciating value in its first few years. So, you never have to worry about owing more than what your car is worth.
3. Shorter Loan Terms
Although used cars are considered to be riskier, they also have a shorter loan term as used cars are generally cheaper. With a shorter loan term, you do not have to accrue as much interest over time compared to financing a new car. You also get to be debt-free quicker.
At the end of the day, the loan you choose depends on your decision to purchase a new or used car. For the best loan terms and interest rates in Singapore, do check out our hassle-free in-house car loans at Swee Seng Credit. Enjoy affordable interest rate offers, redemption plans and many more when you apply for a car loan with us! Contact us today to learn more.