Auto Loans

[lilrosy4]

Im trying to figure out what the best direction would be.....My husband and I were discharged from a Ch 13 plan since we paid it in full..Our Credit scores from here ( a couple weeks ago) were 685 and 675... I know there is differnt rules for new auto loans and for used auto loans..Im just not sure what would be best. Are you more likely to get approved for a new auto loan than a used in our situation? My husband works for Caterpillar so he does get a discount on a lot of new vehicles...So with that and our trade in that would give us a good chunk of $$$ off of what we decide to get...Other wise with the used we would just have our trade and a lil $$ to put down..Just not sure what road to take...Any input is appreciated... We are looking at crossover vehicles and Big suvs if that helps....

[HoldingOntoHope]

The new auto is always going to give the dealer more room to maneuver the numbers for financing (i.e. Employee discount, discount from MSRP, down payment, etc.) So the financing on a new car will be easier to obtain than a used car. That being said with the type of vehicle you are looking for there should be some sizeable discount from book value on SUV's and most crossovers. Most people are looking for smaller fuel efficient vehicles and trading in SUV's. So if you find a relatively late model / low mileage the same maneuvering room may be there.

Go to the dealers and shop around. Their F%I guys should be able to work with you once you find the vehicle you want. If they try to push you in a direction or to a vehicle you are not comfortable with just vote with your feet. There are plenty of dealers and plenty of choices available today.

[lilrosy4]

Thank you! Another ?? Is it true we would get a possible lower interest rate for buying new??? So many factors to weigh.. Its either spend  lots more money, and end up getting the new with the warranty and everything, hopefully getting a lower interest rate or spend less money and get the used with lil to no warranty left so we buy an extended and probably end up with a higher rate...decisions decisons

[Revelate]

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lilrosy4 wrote:

Thank you! Another ?? Is it true we would get a possible lower interest rate for buying new??? So many factors to weigh.. Its either spend  lots more money, and end up getting the new with the warranty and everything, hopefully getting a lower interest rate or spend less money and get the used with lil to no warranty left so we buy an extended and probably end up with a higher rate...decisions decisons

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Usually yes: there's plenty of statistically relevant data that underwriting used car loans is higher risk than new car loans.  Ergo, lenders charge higher interest rates to offset that increased risk for used car loans.

That said, even recently used cars (call them lease returns in this case) can be substantially less expensive, which often offsets or outright beats the lower APR on the new car loan.  Used SUV's especially these days are probably going for a song with the current gas prices.

Do the math on all of them, new, certified pre-owned, low mileage used, and high mileage used, and take the half hour or so fiddling with some various interest rates on any calculator.  KBB value or look at dealer websites for relevant pricing... it's more of a challenge getting financing for private purchases.