A used car may initially appear to be the most fiscally responsible choice. Used cars tend to cost less than brand new cars. The monthly payment on a used car will almost surely be less than that of a new car. If you are trying to have a lower down payment and initial principal payment, a used car is the better choice. A "used" car does not necessarily mean an old car. However, this does not account for the lifetime cost of the vehicle, including maintenance and repairs. While a new car costs more initially than a used car initially, the interest rates on auto loans for new cars tends to generally be lower. Further, the lifetime cost of new cars is likely to be less.