Car Shoppers: Should You Buy New, Used, or Lease?

Man sitting in the driver’s seat of a car, smiling as he drives.

So, you’re ready for your next car, but feel overwhelmed by the choices of buying new, buying used, or leasing. The best option for your financial situation will come down to how you like to use your car and what kind of car you’re interested in.

For example, some people like to upgrade their car every few years to get the newest models and features. Others like to buy and drive the car for as long as possible, with no plans to go car shopping again soon.

Keep reading for the breakdown on when it makes sense to buy new, buy used, or lease a car. Our car affordability calculators can help you explore all your options.

Buying a new car

Buying a new car could make sense for you if you like to have the latest tech and features. New cars come with the highest price of all three options, so it’s important to balance cost with your preferences.

Advantages of buying a new car

You can order the exact make, model, and features that are most important to you
You’re covered by strong consumer protection laws and new car warranties
Reliability is highest with brand-new vehicles
Most repairs and parts are covered by your warranty

Drawbacks of buying a new car

New cars are expensive
New cars require high insurance coverage and costly registration fees
New cars lose value almost immediately after purchase

Buying a used car

When you buy used, you’ll have a lot of options. You could buy a slightly used car, or go back several years to get something more luxurious that’s on budget. With so many options at your fingertips, you’ll need time to do your research and have patience to find the car that fits your wish list and budget.

Advantages of buying a used car

You might be able to buy a used car outright with savings, bypassing the need for a loan
You’ll pay less than you would for a new car – and lose less to depreciation
You’ll build equity as you pay it off

Drawbacks of buying a used car

Buyers must research the Carfax report to understand the car’s history
Reliability depends on how well the previous owner maintained the car
Warranty coverage varies by dealership and seller
Maintenance costs typically increase as the car ages

Leasing a Car

If you have strong credit and you like the benefits that come with having a new car, you might consider leasing. While you won’t be building equity, you’ll likely have a lower monthly payment than with a new car loan, and you may be able to get a luxury model at a more attainable price than buying new. For some, this can be a nice alternative to buying new.

Advantages of leasing

Lower monthly payments than financing a purchase
Minimal upfront costs and down payments
Short-term commitment allows swapping into a new car every few years
Strong warranty coverage on most leased vehicles
Access to higher-end models for less than the cost of buying
No concerns about resale or trade-in value

Drawbacks of leasing

The car belongs to the leasing company
Lease contracts are expensive and complicated to break
Insurance costs are typically higher for leased vehicles
Good credit is required to qualify
Leased cars come with mileage limitations (often 10,000 to 15,000 per year)
Additional charges apply for excess mileage or damage beyond normal wear and tear

From a smart financial perspective, buying and keeping a car long term (whether it’s new or used) usually wins out. You build equity, avoid constant payments, and spread the cost over more years. But if you love the idea of driving a fresh car every few years and don’t mind always making payments, leasing could be a smarter choice.

In the end, your decision comes down to the kind of car you’re looking for, how you drive, how long you keep your cars, and your short and long-term financial goals.

Remember to check out our calculators to help you estimate your costs for buying or leasing a car.

Last Updated: December 13, 2025

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