What's the best way to buy a used car? Cash, lease or finance?

[Raww]

Given a schenario where you have all 3 options, what would you do and why?

[CatDog]

I'd purchase a used vehicle in cash as it doesn't put you into debt, and often interest rates from the bank are 6%+..

Although if you're purchasing from a dealer, often they have promotional rates at 0.9/1.9% for the first 36 months which I would then consider depending on how much car you need.

I'd advise leasing against a preowned, the entire point of leasing is to get into a brand new car every 3-4 years.

[Jeff-TheBiz]

Although if you're purchasing from a dealer, often they have promotional rates at 0.9/1.9% for the first 36 months which I would then consider depending on how much car you need.


If you find a dealer that is providing .9 or 1.9% on a used car, you are paying way too much for that car.

When a rate is bought down from +7% to the 1.9% that cost has to go somewhere.

side note... I am pretty sure that manufacturers that provide the .9 or 1.9% do not fall under this catagory.. ie BMW,

[mwong168]

If you have the actual cash to buy the car outright without having to struggle to get by for your other expenses (eg. rent, mortgage, and other bills) then buy it out. The last thing you need is another bill or debt to pay off every month.

You could finance if you are a bit tight on cash and set a realistic goal for yourself to pay it off as fast as possible. If you happen to manage your money well and save a bit or come into some extra money (eg. Win the lottery :lol:) you can always throw more money to bring your balance down so you can have your car paid off in less time.

Leasing is only good if you are self employed or contractor because you could write if off as a business expense up to $500-600/month I think? This option is also good for those that don't want the headaches of getting a used car that could be plagued with problems and potentially costing you more money out of your pocket.

[marcR]

I'm currently looking at used cars and will most likely get something I can pay outright. I have one car payment already, so it would be nice to have our second car paid for.

BUT, there's also the option of putting the money on my mortgage which was locked in at a high rate compared to current rates, and then putting the car on my credit line (or looking at bank loans) at a lower rate. I need to look into this a little more.

[CatDog]

side note... I am pretty sure that manufacturers that provide the .9 or 1.9% do not fall under this catagory.. ie BMW,

Mercedes Benz financial has 1.9% on CPO vehicles, depending on which Class.

[VivienM]

If you find a dealer that is providing .9 or 1.9% on a used car, you are paying way too much for that car.

When a rate is bought down from +7% to the 1.9% that cost has to go somewhere.

side note... I am pretty sure that manufacturers that provide the .9 or 1.9% do not fall under this catagory.. ie BMW,

Where is the money coming from if the manufacturer provides 0.9% or 1.9%?

I doubt BMW/Audi/etc Finance can borrow money at 0.5%... so there must be a subsidy somewhere. I'd assume the dealer effectively pays BMW/Audi/etc Finance to get the low rates...

[angel_wing0]

Given a schenario where you have all 3 options, what would you do and why?

If it's a 0% interest rate, finance. If not, cash.