New vs. Used vs. Lease Chart

Option Advantage Disadvantage

New

  • New vehicles are usually the most reliable.
  • You will be covered by a manufacturer’s warranty, which typically covers certain repairs and parts replacements for several years.
  • It is easier to customize and get exactly what you want.
  • New vehicles can be very expensive – not just the purchase price, but also the insurance and registration fees.
  • The value of the vehicle depreciates almost immediately
Used
  • Used cars are cheaper than their new counterparts, and you may be able to use savings to purchase the vehicle outright.
  • The value of used cars tends to depreciate less quickly than for new cars.
  • You may not know the vehicle’s history. It could have been in an accident or insufficiently maintained, making it less reliable.
  • Used vehicles typically have no warranty or a limited or soon-to-expire warranty.
  • The maintenance costs are usually higher than for a new car, and it will likely have to be replaced sooner too.
Lease
  • You can drive a new car every few years without having to worry about selling your old one.
  • You may be able to get a lower monthly payment with a lease than with a car loan.
  • Leased cars are typically covered by a manufacturer’s warranty.
  • The required up-front costs of leasing a vehicle are usually low.
  • The vehicle does not belong to you – it is not an asset.
  • It is difficult to get out of a lease contract if you become unable to handle your payments.
  • The costs of insuring a leased vehicle can be very high.
  • There is a limitation as to how many miles you can drive the car (usually 10,000-15,000 miles annually), and you must keep it in good condition. Non-compliance can result in extra fees.