Leasing is an increasingly popular way to get a new car. It has both advantages and disadvantages. You'll want to be sure you understand the terms of the contract and review it carefully before you sign on the dotted line.
When you lease a car, you make monthly payments in exchange for using the vehicle for a set period of time. Generally, at the end of the contract period, which is usually two or three years, you can simply turn in the car and walk away. Since you don't own it, you get no trade-in or resale value. If you need to end the lease early, you can be in for a steep charge. Likewise, you may be charged for excessive mileage or excessive wear and tear. Most leases include an option to buy at the end of the lease for a predetermined price. Generally, however, you may wind up paying more than if you purchased the car in the first place.
On the positive side, a down payment may not be required, and monthly lease payments are generally lower than monthly payments when you purchase a car. Leasing allows you to enjoy a new car more often than you otherwise would. And you have the convenience of simply turning in the car at the end of the lease period rather than having to negotiate a trade-in value or sale.
Second-Hand Rose
Most of what you've read here is directed to the new car buyer. That isn't to say, however, that you can't get a great deal on a set of used wheels. Buying used is very similar to buying new: You need to assess your needs, estimate what you can spend and do your homework.
You have one additional variable to consider when buying a used car: wear and tear. If the car hasn't been in an accident, has been well-maintained and runs well, you may have yourself a first-class car at a discount price.
However, assessing a used car is better left to the professionals. If you think you've found a good one, have your mechanic check it out before you buy. A qualified mechanic can tell if the car is in good condition and worth the price, or if it's all just a good wax job.
To figure out the going price for a used car model, check your local classified ads and consult one of the used car price guides available at the library, such as the Kelley Blue Book Used Car Price Manual (commonly called the "Blue Book"), which lists estimated values for used cars based on what car dealers are paying for various makes and models. Keep in mind that price guides aren't the final word on a car's fair value and that factors such as mileage can change a car's value considerably.
