What’s Better? To Lease a New Car or Buy a Used One?
Leasing a new car may be tempting, but is it a better idea than buying a used one? Here’s a fair comparison of both approaches to getting a new vehicle for your daily driving needs.
Interest Rates, Down Payments and Other Considerations
Buying used may mean a higher interest rate. If you buy a brand’s certified pre owned vehicle, you may get a new loan interest rate, but your price will be higher. On the other hand, you may be able to have a lower down payment or a lower interest rate, depending on where you get your used car loan.
Leasing doesn’t mean you get to skip the down payment. You’ll still be paying a sizeable one, and then you’ll have monthly payments. With a used car, you may get away with a much smaller down payment.
However, you may want to get a quote from your dealership for both a new car lease and a used car of the same make and model. This may be the only way to know for sure which one is the better deal.
Calculating Ownership Costs
If you are trying to save money by buying used or leasing new, you need to start by calculating ownership costs. There are a number of issues that surface when looking at these two approaches to securing a daily ride.
Insurance rates may be lower for a used car than for a new car that you are leasing. This can make a difference in how much you pay each month to drive.
Likewise, fuel economy may figure into whether you want to buy a used car or not. New cars have remarkable fuel economy in many cases.
Furthermore there are some that are all electric. This may make leasing a new car less expensive. You could think of it as a little rebate every week as you skip the fuel pump.
A used car may be quicker to break down than a new one. Furthermore, the leased car is under a warranty and this should protect you from the high cost of car repair.
Other Considerations in Favor of Buying Used
One reason that buying used appeals to some buyers is that they can make their dollar go further. They can buy an older car that has more amenities than the new car they can afford. Likewise, they may be able to get a bigger used car than they could afford new.
This can be a big consideration if you are trying to find a vehicle big enough to keep your family comfortable. A used three-row SUV is more logical for a big family than a leased two-row around the same price.
Other Considerations in Favor of Leasing
Some people want a lease because they feel like it frees them of the burden of ownership. They like the fact that the car stays under warranty. They don’t mind that there is a mileage cap because they don’t drive their car more than 10,000 or 12,000 miles a year.
Leasing leaves them ready to trade up when the lease is over. If they want to buy the car, they can. Otherwise, they can put their money toward the next new thing. With the way technology is changing, this is definitely a big appeal to those who choose leasing.
It’s probably best to go car shopping with both choices on the table. While a lease may be more exciting because the car is new, a used car may be more economical. Keeping an open mind may be the best way to find a deal that actually benefits you.