If your current vehicle keeps breaking down, or if it got seriously damaged in an accident, you might have to replace it. Even if you’re on a tight budget, a car is within reach. You can look for an affordable used vehicle or lease a new car.
Pros and Cons of Buying a Used Car
A used vehicle will cost significantly less than a brand-new one. You might be able to find a car that is only a few years old, is in good condition and has low mileage.
You’ll also save money on your insurance premiums. Insuring a used car typically costs much less than insuring a new vehicle.
If you buy a used car, when you pay off the loan, you’ll own the vehicle outright. If the car is in good condition and you keep up with routine maintenance, you might get to enjoy years with no monthly payments.
While a used car that’s only a few years old might still be covered by the manufacturer’s warranty, an older vehicle or one that has high mileage won’t be. That means that, unless you purchase an extended warranty, you’ll be financially responsible for all maintenance and repair costs. Before purchasing a used car, you should have it inspected so you don’t get stuck with a clunker that keeps breaking down.
Pros and Cons of Leasing a New Car
Leasing is another way to get a vehicle with affordable monthly payments. If you go that route, you’ll get a new car that’s in excellent condition and outfitted with the latest features and amenities. You’ll also get a warranty that will cover routine maintenance and repairs.
A leased vehicle might have low monthly payments, but other costs can be high. The leasing company will probably require you to get full insurance coverage, which can be expensive for a brand-new car.
You might also wind up owing a lump sum later. With a lease, there will be a cap on the number of miles you’re allowed to put on the vehicle. If you exceed the limit, you’ll have to pay for excess mileage when you turn in the car. You might also get charged a penalty for damage, including scratches and dings.
When the lease term ends and you turn in the vehicle, you’ll have to buy or lease another one. Then you’ll have to make monthly payments for the next few years.
Explore Your Options and Do the Math
Buying a used car and leasing a new one both have plusses and minuses. Do some research, find out about the costs associated with specific used and leased vehicles, and make the decision that’s right for your goals and budget.
