New Car Loan

Buying a vehicle is one of the most important decisions you can make. You may already know which automobile you want and there is no debate about the color. The decision-making lies in finding a good loan. You don’t need to do much research to find what you like. However, you need to do quite a bit of research to finance what you like.

I immediately knew that I was going to buy a PT Cruiser. This is my favorite vehicle ever designed in the history of auto manufacturing. Once I saw the great little vehicle I knew that I had to have one. I started looking into various ways to finance the PT Cruiser and found a few surprises in the various loans. Many of these surprises were pleasant.

The first thing that surprised me about financing and automobile is the benefit of buying a brand new auto rather than a used on. I immediately started to browse the used vehicle section and was guided by a friendly salesperson to the latest selection. The salesperson explained that it is actually easier to get new car financing than it is to get a loan for a used vehicle. This came as shock.

Cars that come right off of the showroom floor are more expensive than used autos. One would think that financing for new cars would be more difficult to get. However, older autos are more difficult to finance because the lenders look at the overall value of the purchase. If you buy a used vehicle, the bank has less collateral, in a sense. A car loan for a new car insures that the lender will get a newer, and more valuable, automobile if the loan goes into default.

This is a bleak view of the situation but is does work in the favor of those of us who want showroom-young automobiles. Getting a loan for a new car is easier and there is nothing better than being the person who puts that very first mile on the odometer. However, the ease of getting a loan for a new car versus one for a used automobile can work against us, too.

Many of us know that the vehicle depreciates once that precious first mile is accumulated. The largest percentage of depreciation occurs in the first two years. You are going to make payments on your new car financing during those first two years. The ideal would be to buy a car that was two years old. This way, you are not making payments for a depreciating vehicle.

Proponents of loans would say that this argument is moot. The vehicle will depreciate in value no matter what. That is the nature of automobiles so enjoy your young vehicle and relax. Your car is to bring you joy and many years of trouble free driving pleasure. Make the most out of it.

Jim Powers 'Certified Car Nut"

Check out BankRate.com for the latest rates. Go to: http://www.bankrate.com/brm/rate/auto_home.asp