If you're trying to decide whether to lease or buy a car, the key is to focus on how long you plan to keep it.
Buying a car is overwhelming. From deciphering dealer fees and avoiding pressure tactics to figuring out what features you actually need (versus what just looks good on the lot), it can feel like you’re speaking a different language the moment you walk into a dealership.
And even though women make the majority of car-buying decisions in the U.S., far too many of us still feel left out of the conversation. We’re told to “go with our gut,” but when it comes to thousands of dollars and years of payments, that can feel… risky.
That’s exactly why we brought in Chaya Milchtein, automotive educator, TikTok star, and author of: “Mechanic Shop Femme’s Guide to Car Ownership,” to break it all down. In this episode, Chaya shares whether it makes more sense to lease or buy a car, what to consider before going electric, and how to walk into a dealership with total confidence.
So whether your current car is on its last legs or you’re simply exploring your options for the New Year, here’s what you need to know before making one of the biggest financial decisions of your life.
Why Buying (Used) Can Be The Best Deal
Jean Chatzky: Is a used car generally a better decision than a new car these days, or is it really on a case-by-case basis? And if it is case by case, how do you make that call?
Chaya Milchtein: A used car will certainly save you money. The average used car purchase right now is $30,000, versus a new car purchase, which is averaging just under $50,000, so it is certainly less expensive to buy a used car. But whether it’s the best decision for you and your specific needs is on a case-by-case basis.
There are some vehicles, like Subarus, for instance, where purchasing a used car that’s two or three years old doesn’t provide as big a savings as with some other vehicles, like Volvos or luxury vehicles, where that initial depreciation is significantly more.
So it’s going to depend on:
- How much do you want to spend on the car?
- How long do you want to keep the car?
- Are you willing to deal with problems with the vehicle sooner rather than later?
So, will you save money if you buy used? Yes. For most people, it’s certainly a better option to purchase used.
How to Decide If You Should Lease or Buy An Electric Car
Jean Chatzky: If I’m going electric, should I buy or lease?
Chaya Milchtein: Leasing is often more advantageous than purchasing the vehicle. Electric vehicle technology is rapidly evolving. Three years from now, the options that will be available for electric vehicles might be significantly better or more attractive to you than what’s available right now.
Also, there’s a big depreciation factor in electric vehicles. Electric vehicles also have a major drop in depreciation, so when you purchase one, you often will take a bigger hit from the depreciation than you will on the leasing. And remember, when you lease the car, you still have the option to buy it at the end of the lease if it turns out to be perfect for you.
Negotiating at the Dealership? Walk in With Power
Jean Chatzky: Tell me about the negotiating game these days. I’ve been told that because so much can happen online, the process of negotiating for a car is not as much of a game or a confidence drain as it used to be. Is that true?
Chaya Milchtein: I think a lot of going into a dealership and going into a space where people inherently don’t have your best interest at heart, and their goal is to get the most amount of money for you, is often going to do a number on someone’s confidence.
I’ll always tell people, when you’re walking into a dealership, you should have all your questions already answered:
- You should have done your research
- You should figure out what car you want
- You should have figured out how much that car is worth
- How much is it available for in the market
- Consider the different fees that are out there
Going in and being prepared is your best hidden weapon. So, building yourself up and remembering that this is your money, this is your purchase, you have the right and opportunity to walk out of there at any given time is super critical.
MORE ON HERMONEY:
- How to Not Get Ripped Off When Buying A New Car
- How To Make Extra Money During The Holidays
- Ask Jean: Are CDs Worth It Right Now, Or Should I Keep My Cash Liquid?
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