When it comes time to buy a car, people with bad credit often opt for a used car because they believe used cars have lower monthly payments.  There are, however, other factors to consider in addition to the payment such as the total cost of ownership, lender rates, and the cash down payment amount required to get approved for financing.

• Aside from available rebates, new cars are under factory warranty for at least 3 years and 36,000 miles.  For similar coverage on a used car you would have to pay extra.  Some manufactures, Kia for example, protect their cars for 10 years and 100,000 miles.  If unexpected repairs are necessary, having a factory warranty will lower your ownerships cost when compared to a used car.
• It is a fact that lenders offer better rates and longer repayment terms for new cars than they do used cars.  A longer time to pay off your purchase at a lower rate equates to lower monthly payment.
• If you have bad credit, most auto loan lenders require a cash down payment.  Many new cars come equipped with a down payment, it’s called a rebate.  Cash rebates are not available on used cars.

Following are a few new cars that have a low sale price, long warranty, and/or rebate:

• The Chevy Aveo retails from $9,995 - $13,510 and has $1,000 cash back in most areas.  The Aveo, however, has a basic 3 year/36,000 mile warranty and a 5 year/100,000 mile drivetrain warranty.
• The Kia Rio retails from $10,770 - $14,595 and has a $1000 cash back rebate in most areas.  The Rio has a basic 5 year/60,000 mile warranty and a  10 year/100,000 mile drivetrain warranty.
• The Hyundai Accent retails from $10,415 - $15,015 and has a $1000 cash back rebate in most areas.  The Accent has a basic 5 year/60,000 mile warranty and a  10 year/100,000 mile drivetrain warranty.

Each of these new cars has excellent fuel efficiency as well.  So if you have bad credit and are going to buy a car, consider one of these if you’re concerned about your monthly payment, down payment, and overall cost of ownership.