Are you in the market to lease a new car or buy a used one? Phil Reed, senior consumer advice editor from the automotive information website Edmunds.com, says you should do some homework first. Jean talks with Phil about car buying trends and tips for those who are looking to buy or lease.
In recent years, leasing has been popular among car dealerships and some types of buyers, Phil says. "You can get more car then you can really afford when you lease, and the reason is because essentially you only pay for the part you use."
Phil says you should ask yourself these questions to determine whether or not you are a good candidate for leasing:
- Do I want to be in and out of a new car every three years or so? Phil says most leases are for three years with a buyout option. "After three years if you really like the car, you want to stick with it, you can buy it," he says. However, know that you will lose a little bit of money because of finance fees and other charges.
- Does my job require me to have a new car? Some professionals, such as real estate agents, want a new car at all times to impress the many clients who ride in their car, Phil says.
- Do I want to modify my car in any way? You can't make modifications on a leased car without being heavily penalized, Phil says.
- Do I plan on driving more than 12,000 miles a year? Most car leases require you to limit the number of miles you drive, Phil says. Going over the limit costs you extra and can get very expensive.
If leasing doesn't work with your lifestyle and a new car is out of your budget, Phil says you should consider a certified pre-owned vehicle. These cars are inspected by a mechanic and come with a warranty, Phil says. "You don't have to crawl underneath it, you don't have to kick the tires, you don't have to put it up on a rack and see if it is leaking oil because they have done all of that for you," Phil says. "If they haven't done a good job, they warranty their work and will fix it afterwards, so you pay a little more but it is an easier shopping experience."