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

Vehicles that come right off of the showroom floor are more expensive than second hand cars. One would think that a new vehicle loan would be more difficult to get. However, older autos are more difficult to finance because the lenders look at the overall costing of the purchase. If you buy a second hand vehicle, the bank has less collateral, in a sense. A new car loan insures that the lender will get a newer, and more valuable, auto 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 shiny-young autos. Achieving a new car loan is easier and there is nothing better than being the person who puts that very first mile on the odometer. However, the ease of Receiving a new hot rod loan versus one for a second hand car can work against us, too.

Many of us know that the auto goes down in value once that precious first kilometer is accumulated. The largest percentage of depreciation occurs in the first two years. You are going to make payments on a new vehicle loan during those first two years. The ideal would be to buy a vehicle that was two years old. This way, you are not paying back for a depreciating station wagon.

Proponents of a new auto loan would say that this argument is moot. The auto will depreciate in value no matter what. That is the nature of autos so enjoy your young car and sit back.