New vs used car finance: how the loan differs

Lenders generally see new cars as lower risk than used cars, which can affect your interest rate and the terms on offer.

New cars

• Rates are often lower than for used cars.
• Longer terms are usually available.
• They lose value quickly in the first few years, so consider how much you owe compared with what the car is worth.

Used cars

• The purchase price is lower, so the loan can be smaller.
• Some lenders limit the age of the car at the end of the loan.
• Rates are often a little higher than for new cars, and private sales may have extra requirements.

Before you buy a used car

• For private sales, we carry out a digital inspection for our clients at our own expense, including checking the registration.
• Ask the seller for the service history.
• Consider an independent mechanical inspection for older cars.

Whichever way you go, get pre-approved first so you shop with a clear budget.

Updated October 2026. General information only; not financial, legal or tax advice.