Buying a used car with a loan?

Cash strapped buyer in these tough time may consider buying a used car instead of buying a new car. If you are thinking of buying a used car with a car loan, think again. Crunch your numbers, get quotes for interest rates and terms of the used car loan and compare with whats available in the new car market and compare the terms of the used car loan against the terms and interest rates of a new car loan. You may be in for a surprise.

New-car sales are at historic lows and desperate dealers are offering tons of rebates and incentives so prices are plummeting. At the same time, demand is up for used cars and their values are rising. Used cars still generally cost less than new but a mix of drastic price cuts, rebates and finance incentives is narrowing the gap. Especially if you consider the high cost of used car loans.

Used car loan interest can be up to 9% higher than the new car loans in some cases. (You can get most domestic new cars for 0% interest). If you calculate that interest payment you can get close to buying a new car with same monthly payment of a used car with a high interest loan.

Think about it. Do you math. Save your $$$..