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Buying a Car? Three Decisions You’ll Need to Make

Buying a new car may seem overwhelming but thinking through your options can help you make the right decision. Should you lease or buy? Buy a new or used car? Purchase from a dealer or direct from an owner? The good news is that there are many options to help you find the right car for your needs and budget. Evaluate these decisions as you keep in mind how you are going to use the car: Will it be used primarily to commute to work, to drive kids to school, sports and the grocery store, or for longer-range travel?

Decision 1: Lease or Buy?
Leasing can be appealing if you regularly drive short distances, or only need a vehicle for a 2- to 3-year time period. If you lease your car, you may have a lower monthly payment (with a newer car) and you can often purchase a maintenance package to cover any repair costs. But be prepared: You will not build up an ownership stake in the car, there are typically annual mileage limits, and you may owe additional fees for excess mileage or lease fees on the car at the end of the lease term.

Buying can be a good option if you plan to keep your car for a long time and desire to own it outright at the end of the financing period. There is greater flexibility in options for buying, as you can evaluate both new and used vehicles. Check out the resources on our Auto Loans page and the Auto Loan calculator to help clarify the financial end of the decision.

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Decision 2: New or used?
Whether to buy a new or used car largely depends on your preferences and needs. Buying a new car has its advantages: With a new model, all systems are new and under warranty for the first few years, your gas mileage may be more efficient and, you can often customize the car with options you want—whether it’s Bluetooth, a roof rack, or the type of seating in the interior. However, new cars are expensive—you’ll not only pay more for the sticker price, but you may pay more for insurance and excise tax, too.

If you are seeking a budget-friendly option, a used car may be a good choice. After all, the worth of a car depreciates over time, so why not pay less up front? But, before you buy, consider the car’s condition and think about how much you may need to pay for yearly repairs and maintenance. Make sure the car checks out mechanically and that you know of any warranties that are transferable or available from the seller.

Decision 3: Dealer or owner?
So, you’ve decided a used car is the way to go. Now comes the big question: should you buy from a dealer or an owner? A big part of the equation is how much time and money you want to put into finding the right car. A dealer is more likely have a wide selection of vehicles, and you will usually have the option to buy an additional warranty on the vehicle. The downside: You may pay more for the car, unless you prepare your negotiation tactics beforehand.

If you buy from the vehicle’s owner, you may get a lower price on the vehicle—but it’s almost certain you’ll need to do more research to find the car that you want. Once you do find the right vehicle for you, we recommend using a vehicle history service such as CarFax to research the vehicle’s history. It’s also a good idea to have a trusted mechanic perform an inspection to ensure the car is safe and reliable before you purchase it.

Take the time to think through your options and, with a little forethought and planning, you’ll find the best car for you and your family. And when you are ready, you can look to PenAir’s Auto Loan page, where you will find resources for all of the phases of the car buying process.

Next Steps

When you are ready to take off on a new driving adventure, check out the resources we have for you here at PenAir:

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