Cars are like kidney transplants: if you need one, you really need one. Fortunately, there are a lot of options for those of us who—whether it’s because of where we live (three cheers for Los Angeles!) or what we do—need to be auto-enabled.
The downside of this upside, however, is that it can be tricky to decide which option is best for you. So let’s look at some of the possibilities:
Make sure you actually need a car: To belabor our opening metaphor, there is nothing worse than getting an unnecessary kidney transplant (well, maybe getting two unnecessary kidney transplants). If you’ve just moved to a new city or have always just had a car and kind of taken it for granted, it is at least worth considering going without. What is public transportation like? How far will you have to travel in your day-to-day life? How frequently will you have to go farther? If the answers to these three questions are a)Decent, b)Not that far, and c)Not that frequently, then congratulations: you may not need a car.
Every place with good public transportation also has frequent-user programs which should make it even more affordable, and for those times you find yourself absolutely needing a car, you can rent one, get into zipcar or the like, or just maintain a close friendship with one or more of your car-having friends. Also, for the commute, find out if there are any ride-sharing or casual carpool programs at your company or in your community.
Long-term rental: Somebody I know (possibly named “Me”) once rented a car for like three months. There is basically one good reason to do this: do you find yourself in a situation where you need a car for a limited time, and you will never ever need one again? Then long-term rental may be the way to go. Outside of this fairly unique set of circumstances, however, it is a horrible idea. If, at the end of your rental period, you are still going to need a car, then all you’ve done is carefully invested a few thousand dollars into a hopelessly temporary solution, like buying a really expensive band-aid. If you need a car, suck it up and get one; do not delay the inevitable by going the easy (and wasteful) route.
Buying new: Ah, now here’s an option. Everybody likes the idea of buying a new car; it’s practically written into the American Dream. And it may be the best fit for you:
• New-car smell. We have no idea why all new cars smell like this, but….mmmm, delightful!
• Confidence. Because you are its first owner, you can be sure that (barring a recall) it had no problems before you first buckled up in the driver’s seat. Knowing exactly what your car has been through is hard to put a price tag on.
• Lower maintenance costs at the outset. Your new car should, well, drive like new, at least for the first few years.
• Higher resale value. When you do decide to trade in your no-longer-new car, it will have a higher open-market value, which you can put toward your next purchase.
• Man it’s expensive. We’ve all heard how a car’s dollar value plummets the moment you drive it off the lot. This urban legend is true. By buying a car new, you are spending a lot of money up front and/or signing up for much higher payments in the future.
Pros and cons:
• Basically the flip-side of the pros and cons for buying new. You will have higher maintenance costs, you will never know exactly how your new purchase spent the first few years of its life on the road, and by the time you discover the Cheeto dust ground into the carpet under the passenger seat and carefully preserved under a petrified layer of mocha-lattecino, that unique melange will be yours to keep forever. On the plus side, it will be much cheaper at the outset.
Leasing: Is your company paying for the lease? Do you absolutely love to own the newest road-toy, one that you plan on ditching as soon as something younger and hotter comes along? Then leasing may be for you. If you answered no to both questions, however, then leasing doesn’t make much sense. Leasing can cost pretty close to buying new, and at the end of your lease you’ve got nothing to show for it except fond memories and a much-reduced bank account.
Once you’ve decided whether to lease or to buy new or used, you actually need to get the car. Next time, we will look at some tips for car-shopping, and also discuss how to actually pay for the car you end up getting. Until then, happy trails! (I’m assuming you are walking, or getting a ride from a buddy, because we haven’t gotten you a car yet.)