Automakers Offering Low Interest Rates on Certified Pre-Owned Cars
Auto loan interest rates are typically higher for used cars than they are for new cars. Reasons for this vary, but a significant factor is the greater risk associated with the variability in used-vehicle mileage, condition, and value. Comparatively speaking, new-vehicle mileage, condition, value, and depreciation are predictable, resulting in lower risk to the lender.
Car companies also keep new-vehicle interest rates low. To help spark sales, automakers will offer low-interest or no-interest loans to make payments more affordable and enticing for prospective buyers. This practice also applies to an auto manufacturer's certified pre-owned (CPO) vehicles, which helps to make them more affordable in terms of a monthly payment even if a CPO vehicle is priced higher to cover the costs of certification.
As a result, interest rates on certified pre-owned cars are sometimes just as appealing as those offered for new vehicles. Keep in mind, though, that to qualify for the best interest rates you must have an excellent credit history and rating, as well as a steady source of income.
To provide consumers with concrete examples of the interest rates on CPO cars, we examined the special offers available from a range of luxury and non-luxury brands. The data was accurate for July 2017, but automakers regularly offer discounted rates and other incentives on their CPO vehicles.