The question of leasing is one that’s common when people are buying a new car. Clark typically advises people to buy rather than lease. Some rare exceptions to that rule include when there is a special factory subsidized lease or a manufacturing oversupply leading to great lease deals at the dealership.
But now a lot of people are leasing not new cars, but used cars!
What you need to know about used car leasing
Used car leases are being pushed heavily now because it’s hard to figure out what you’re actually paying. The imputed interest rate is hidden and you don’t know if you’re paying massive charges. Moreover, the legalities of the used car lease contracts put you at a disadvantage if later you have a dispute with the seller.
Not to mention the fact that you’re getting a car that could have been someone else’s headache for a few years.
‘You’re taking a car that may have 35,000 to 45,000 miles on it and then you’re going to lease it for several years. When you’re done, you’ve got nothing to show for it because you don’t own the car,’ Clark says.
‘This is a terrible idea. Don’t do it. If you’re looking at used cars, never let the word ‘lease’ enter your mind. Buy that thing instead.’
Here’s the step-by-step on how to buy a used car
Arrange your used auto financing first. Look at credit unions, online banks or even traditional banks. Only take dealer financing if it beats any other offer you have. Of course, the best solution is to pay for an affordable used car completely in cash!
Make sure the used vehicle is worth what you’re paying. Check Edmunds.com, KBB.com or NADA.com for the true market value so you come up with a feel for the price. You can also use CarGurus.com, which lets you put in your zip code and the make/model of the vehicle you’re interested in at their website. They’ll comb through some two million listings available on published databases and rate the vehicles available for sale with notations of ‘great price,’ ‘good price’ ‘fair price’ and on down.
Check the vehicle number. Run the VIN though CarFax.com to find out if it’s a flood vehicle or if it’s been in a horrible accident.
Have the used vehicle inspected by an independent mechanic. One of the key things to know about buying a used car is that you buy ‘as is.’ CarFax alone is not enough of a check; you need to take this additional step. Never rely on any representations that the salesperson makes about the car, be it a commissioned employee at a dealership or an independent seller in your neighborhood.
Check out your no-haggle buying options. It can be tough to find a diamond in the rough and weed out the lousy deals. Try Carvana.com, which has a seven-day ‘no questions asked’ return policy. It’s kind of like the Carmax of the online used car buying world.
Read more: Best auto insurance companies