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You have plenty of new and used models to choose from, as well as a few financing options to consider. While secured car loans from a third-party lender might come with the most competitive rates, leasing or financing directly through a dealer can likely get you behind the wheel faster. Here’s how your different financing options stack up:
When comparing your car loan offers, keep these factors in mind to ensure you get the best deal:
There’s always going to be a debate over which is better: new versus used cars. For many, there’s a certain peace of mind that comes with owning a brand-new car, like having a warranty, knowing there’s no possibility of previous damage and that enticing new-car smell. However, new cars decrease in value at a steep 40% after the first three years of ownership due to depreciation.
With a used car, you’re usually able to benefit from a lower sticker price. But it might not have the latest bells and whistles that the latest model has. And while there’s a risk of not getting what you paid for, this is less likely if you go through a certified preowned dealer rather than a private seller.
While $20,000 won’t snag you a new Benz, it can get you a pretty nice car — new or used. Here are some of the top cars in your price range currently on the market:
*Prices as of November 2018.
Not sure a $20,000 car loan is right for you? Ask yourself these questions to help you decide:
If you have decent credit and want to get a loan as quickly and easily as possible, financing through a dealer might be your best bet. However, you might be able to score a more competitive deal by comparing your car loan options from banks and online lenders yourself.
Learn more about how they work and compare lenders with our guide to car loans.
Should I get a secured car loan or an unsecured personal loan?
It depends on your priorities and personal financial situation. Secured car loans usually come with more competitive rates — though you risk losing your car if you can’t afford repayments. On the other hand, an unsecured personal loan doesn’t require you to use your car as collateral. However, these typically come with higher rates.
How old can my car be if I want to use it as collateral?
This depends on the lender. Some require that your car be less than seven years old to qualify, while others have more lenient criteria. Find out more with our used car loans guide.
What’s the maximum loan term for a car loan?
Maximum loan terms vary by lender, though many allow you to take up to seven or even eight years to pay back your loan.
Image source: shutterstock
Back to topKellye Guinan was a financer writer for Finder, covering everything from loans from auto to personal to business finance.
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