Several factors can change the terms of financing a car. One aspect of Lexus financing that tends to raise questions is the difference between financing a new or used vehicle. Here, we will explain why the two are often different regarding what you pay and why.
Why the Difference?
New cars have advantages over used vehicles, including newer technology features, improved reliability, and more extended warranties. Those are often the same reasons lenders offer lower rates when financing a new car.
If something goes wrong with a used car, the lender will want to ensure the borrower can handle it. That’s why used cars can be more expensive to finance. However, there are some things you can do to offset this.
L/Certified Pre-Owned Vehicles
A small select number of pre-owned Lexus vehicles qualify as L/Certified. These vehicles undergo a rigorous 161-point inspection that tests every bolt and light inside and out of the car. If it passes, it comes with an extended warranty and a lower risk to the lender, which may reduce your interest if you finance one.
Trade-In and Down Payment
The other way to reduce the interest you pay on a pre-owned Lexus model is to increase the amount you put down as a down payment. Trading in your current vehicle may also significantly pad your down payment, offsetting the difference in rates between new and used cars.
Let Us Help You Find Your Next Used Car
As you can see, there are plenty of reasons why financing a used car can be different from a new one. The Keyes Lexus of Los Angeles team is here to help you. Our expert financial center staff can help you find the right vehicle for your lifestyle, matched to financing that perfectly fits your budget.