The answer depends on many different factors. When making a buying decision, your long term goals matter a lot. To help with your decision, the following are some of the main pros and cons of buy a used car versus leasing a new one.

The pros of buying a used car

Cost savings: New cars cost significantly more, compared to their used counterpart. Buying used means being able to save thousands of dollars on the transaction, and even avoiding financing it.

Cheaper insurance:  According to AAA, the cost of vehicle ownership is close to $9,000, with insurance making up a huge portion of that estimate. The insurance for used cars is generally much cheaper.

Depreciation: Vehicles lose value the moment they leave the lot. For used cars, a lot of this depreciation has already happened, meaning you could be getting excellent deals by shopping around.

Cons

Need for repairs: Repairs are to be expected depending on the condition of the car. Minor fixes may not matter much, but it becomes a problem if it ends up costing thousands of dollars.

No warranty: Whether you buy used cars, they may not have an extensive warranty from the manufacturer that new cars typically have.

Limited choice: It could take a long time before finding the right vehicle. With dealerships, this isn’t normally a problem as you can literally drive off the lot the same day with a brand new car of your choice.

The pros of leasing a new car

Fewer upfront costs: Leasing tends to offer reduced monthly payments, better interest rates and lower sales tax. This means fewer upfront costs for you.

Less maintenance: Most leases last between two to three years, meaning that major maintenance issues are generally not a problem.

Afford a nice car: You may not be able to buy a BMW or Lexus outright, but with leasing you can. In fact, nearly 75% of all luxury vehicles on the road are leased according to some estimates.

Cons

Mileage limitations: One of the biggest drawbacks with leasing is that the allowed mileage is limited to between 10,000 to 15,000 miles per year. If you go over the allotted amount, then penalties will need to be paid.

More to expensive to buy: Should you decide to purchase the vehicle outright at the end of the term, you could be paying much more compared to if you had just financed it in the beginning.

Financial obligations: If the vehicle has negative equity due to being in an accident, then you are financially obligated to pay for the differences.

Which one is right for you?

Each choice has its pros and cons with significant differences to each, money being one of them. Leasing a car may not be the most practical especially if you do a lot of driving. Likewise, buying used could be a financial burden if the costs to repair it keep piling up.

Jake Alexander is a free lance writer who enjoys blogging about cars. For information on used cars in Los Angeles, contact @JakeAlexander17.

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