If you’re looking to lease or buy a new or used car, you’re in good company. There are more than 276.1 million cars registered in the United States in 2018, and Chicago alone had 4.5 million private and commercial automobiles registered in 2016.
But deciding on the car you’ll be driving on those Chicago roads can often be quite the process. There’s the make, the model, the color, the features — but the first big decision is lease, buy new, or buy used? There are advantages and disadvantages to each option, and there are a number of factors to consider.
Pros of Leasing a Car
Wide Choice – You get to choose the car that you drive and reap the benefits of a new car, such as warranty and maintenance.
Lower Out-of-Pocket Costs – Leased cars often have low or non-existent down payments, and monthly lease payments are generally lower than you would pay if buying a car on time. Plus, there’s no sales tax.
No Worries About Depreciation – While your lease rate includes the impact of depreciation, leases aren’t typically responsible if the car’s resale value at the end of the lease is lower than originally projected.
Cons of Leasing a Car
Continual Payments – Your lease entitles you to the use of a vehicle, not the ownership of the asset, so your total out-of-pocket costs may be considerably higher than if you purchased the car.
Excessive Use Fees – If you go over the mileage limits specified in the lease or the dealer determines that your returned car is in worse shape than expected, you may be subject to fees.
Insurance Considerations – The leasing agency often requires higher levels of liability coverage for its vehicle than an owner would generally purchase for their own vehicle.
Pros of Buying a New Car
Excitement – Everything is new and shiny and smells fresh — and it’s all yours — which is a feeling that’s pretty hard to beat.
Less Worries – A new car is often under warranty for several years, and you’ll often end up driving one for as long as a decade. Plus, it has the latest safety features and technology.
Selling Option – There’s no mileage penalty, and if you buy a car and decide it’s not right for you, you can sell it— even if you’re financing it.
Cons of Buying a New Car
Depreciation – It’s true that the second you drive it off the lot, the car loses value. In fact, it can lose almost half of its retail value in the first three years.
Higher Costs – Manufacturers may ask for a higher down payment than if you were signing a lease, and insurance rates are often higher for new cars due to their greater value.
Maintenance – With a purchase, you’ll most likely keep a vehicle long after the manufacturer warranties end, which means you’re on the hook and out-of-pocket for any upkeep.
Pros of Buying a Used Car
Lower Costs – Not only do you pay less than you would for a new model, but insurance rates are often lower for used vehicles.
Reliability – With regular maintenance, modern vehicles can easily go 100,000 to 150,000 miles without expensive overhaul, and extended warranties are available for many used cars.
Less Stress – An older car already has its share of minor cosmetic damage, so you won’t be as worried about something happening to your brand new ride.
Cons of Buying a Used Car
It’s Not New – That sounds obvious, but you can’t customize the features to your liking, and there is bound to be wear and tear.
Risk – While you think you’re buying your dream used car, there’s a chance that it’s a lemon and you’ll be on the hook for any hidden issues and repair bills.
Safety – Older cars don’t have the latest safety technology.
So What Should You Do?
It all depends on your needs and what you’re looking for in a car. The key is to take your time, do the research, and make the right buy for you. Once you have that new-to-you car, be sure to bring it into Milito’s Auto Repair for all your car care needs!