Are you in the market for a new car but unsure whether to get a new or used auto loan? This guide will break down the differences between the two options to help you make an informed decision.

A new auto loan is used to finance the purchase of a brand new car from a dealership. This type of loan typically comes with lower interest rates and longer repayment terms, making it a more affordable option for those looking to buy a new car.

On the other hand, a used auto loan is used to finance the purchase of a used car from a private seller or dealership. These loans often come with higher interest rates and shorter repayment terms, but they can be a good option for those on a tighter budget or looking for a specific make and model.

When deciding between a new or used auto loan, it's important to consider your budget, the type of car you're looking for, and the overall cost of the loan. While a new car may have a lower interest rate, it will also have a higher purchase price, whereas a used car may have a higher interest rate but a lower purchase price.

In summary, a new auto loan is ideal for those looking for a brand new car with lower interest rates, while a used auto loan is better for those on a budget or looking for a specific make and model. Ultimately, the decision between the two will depend on your individual needs and financial situation.