Car Buying Tips: Is It Best to Buy New, Used, or Lease?

Getting a new car can feel overwhelming—between dealerships, financing, and finding the right fit, it’s hard to know where to begin. At Seattle Credit Union, we walk with you every step of the way, making the journey as smooth as a drive through the Cascades. To get you started, we’ll introduce the 3 options: buying a new car vs. buying a used car vs. leasing a car.
Before looking at the options, take some time to think about what you need. What do you look for in a car? What types of features are important to you? How much are you willing to pay? Be sure to also think about the safety and reliability of your car.

Is it better to buy a new or used car?
There are pros and cons to buying a new car. Here are some of the best advantages:
• Reliability: It’s brand new. The probability of running into issues is obviously lower than getting a used car.
• Manufacturer’s warranty: Even if you do run into problems, you’ll have a warranty from the manufacturer. The maintenance costs will be much lower than a second-hand car.
• Customizability: You can rarely ask for a customized used car. If you need a certain feature customized, getting a new car might be best for you.

There are also some disadvantages:
• Expensive: A new car costs more than a used car, and insurance and registration costs will also be higher.
• Immediate depreciation: The depreciation of a car’s value is not linear. For a new car, you lose roughly 10% of its value the minute you drive off the lot. After the first year, it will probably be worth about 20% less than the original price. From years two to six, depreciation will be around 15% per year. In other words, it’s not a good investment if you might want to sell it in 1–2 years.

Tip: Always ask for the MSRP (Manufacturer’s Suggested Retail Price) when shopping for a new car.

Buying a used car, on the other hand, costs much less and depreciates slower. There’s also more room for negotiation. However, you should understand the risks:
• You may not know the history of the car.
• There’s limited or no warranty, which means higher maintenance costs.
• You may need to replace it sooner.

In general, getting a used car may save you money, but you should spend more time researching to ensure you’re getting a reliable car at a reasonable price.

Tips for buying used cars
Worried that you’re paying too much for a second-hand car? Here are some fundamental tips for buying used cars:
• Use Yelp to check reviews of the dealers.
• Get a CarFax vehicle history report, either from the dealer or online.
• Ask for the VIN (Vehicle Identification Number) to see the vehicle history report.
• Have an independent or family mechanic inspect the vehicle.
• Consider purchasing Mechanical Breakdown Protection.
When is the best time to buy used cars?
Timing matters if you don’t need to get the car right away. To get a better deal, try shopping for a used car during these times:
• December / end of the year: Dealers are looking to meet annual sales goals and clear out prior model-year cars, making discounts more likely.
• Veteran’s Day, Labor Day, and Black Friday weekends: Holiday weekends are popular for buying new cars, which means many used cars are traded in or returned.
• After new models are released: Like smartphones, older car models often drop in price when new ones are introduced.

Read our auto buying guide to help inform your decision—so you can enjoy the journey to your next car without stress or surprises.

Pros and cons of leasing a car
Is leasing a car a good idea compared to buying one? It depends on your needs and preferences. Some benefits of leasing include:
• You can drive a new car without worrying about selling the old one. You can easily switch or upgrade after the lease ends.
• You may get lower monthly payments compared to a car loan.
• The upfront cost is typically lower than buying a car.

However, there are some disadvantages:
• The vehicle doesn’t belong to you, so it’s not your asset. You won’t be able to sell it after use.
• Canceling a lease contract can be challenging and may involve a high termination fee.
• If you decide to buy the car after leasing, it often costs more in the long run than buying it upfront.

Generally, leasing is suitable for those who want to change cars every 1–3 years or need a vehicle for a limited time. Keep in mind that leases usually have mileage limits, so it’s not ideal for long-distance commuters or frequent travelers.

Ready to get yourself a new car?
If you’re not sure where to start, read our free auto-buying guide to help you navigate your way to your next car. It covers much more than this article.
If you’re thinking about financing, learn about the four important steps to buying and financing your next new car. You can also use our auto loan pre-qualify tool to quickly check how much you may qualify for—without impacting your credit score.
To learn more about Seattle Credit Union’s auto loans, check our current auto loan rates and use our auto loan calculator to estimate your loan amount and payments.