There are so many decisions to make when you decide to purchase a vehicle. One of the first decisions is whether to buy new or used or lease.
Many people want to buy new, but the price of new vehicles is getting further and further out of the reach of many people. The length of loans has gone from three years to five or six years to keep the monthly payments more affordable, meaning the vehicle is no longer ‘new’ when it is paid off. New vehicles mean higher insurance and DMV costs as well as higher payments. New vehicles lose their value quickly at first.
Leasing offers a way to buy a new vehicle at a lower down payment and lower monthly payments, but like renting, at the end, you do not have ownership. The DMV and insurance costs associated with leasing a new vehicle are the same as if you purchased a new vehicle, so even though you will not own the car in the end, the additional costs are equal to a new car purchase. Depending on your vehicle needs and requirements, leasing might still be the right option for you – many companies chose to lease because of how many miles they put on the vehicles each year. If the wear and tear on the vehicle is high, then sometimes leasing and getting a new vehicle every 24-36 months makes more sense, since the investment is lower monthly.
Buying a used car is not what it used to be. Many used cars have warranties left or you can purchase warranties, which is one reason people often purchase new is because of warranties. Used vehicles have lower payments, as well as lower insurance and DMV expenses. They also maintain their value better over time.
If you are looking for the most economical, budget friendly car buying experience, consider purchasing a newer used vehicle, but no matter what choice is right for you, know your options.