Lenders often offer lower rates on new or near-new cars, because they're more predictable security. Used cars are cheaper to buy, so you borrow less. The better choice depends on total cost, not just the rate.
New car finance
- Pros: sharper rates, longer terms available, warranty, manufacturer promotions
- Cons: higher price and fastest depreciation in the first few years
Used car finance
- Pros: lower price, a smaller loan, and much of the depreciation already taken
- Cons: potentially higher rate, vehicle age limits on term, more repair risk
How to compare
- Work out the total repayable for each option.
- Estimate what each car will be worth when the loan ends.
- Add running costs: insurance, servicing, fuel and likely repairs.
- Compare the net cost over the time you'll keep the car.
A common sweet spot
A two to four-year-old car often balances decent finance rates, remaining warranty and less depreciation. But the numbers on your specific options decide.
Comparing new vs used? Tell us both options in about 60 seconds and a licensed broker will call you. No credit check to enquire.
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General information only. This isn't financial advice. Finance the Ride is a referral service and doesn't hold an Australian Credit Licence. Last reviewed September 2026.
