Once you have decided that you are tired of your old car and are in need of a new one, the next biggest question is New or Used. The decision can go both ways on which is the better value for you.

-New Cars
New cars have many benefits to them that used cars do not. A new car has a full manufacturer warranty and a new car also has a clean record, No accidents, Flooding or damage of any kind. New cars are covered under Lemon Laws. Plus, you get to enjoy that New car smell (there is nothing like it). The biggest downfall with a new vehicle is that the owner will incur all of the depreciation on the vehicle. The minute a customer buys a new car and drives it off the lot the value of that vehicle goes down significantly. The majority of depreciation on a vehicle will happen during the first year. The owner will at the end of a year own a vehicle that is worth nothing near what he/she paid. Another problem with new vehicles is recalls. Many people over look recalls when they are purchasing a vehicle. Recalls on vehicles are free of charge to the owner but they do take time to have the work done. Some recalls only happen because of dangerous defects in the vehicle (ex. SUV's with tires that blow out).

-Used Cars
Some of the benefits with used cars cover the downfall of New Cars. Used cars already have incurred their depreciation and are less expensive then new cars. Used cars usually are sold when they are 1-5 years old and because of this they do not depreciate as extremely as cars that are less then one year old. Used cars can have a manufacturer warranty still active on it. BEWARE: some warranties only apply to the first own, or they are shortened significantly for any owner after the first. Ex. A 10 year/100,000 mile warranty is only a 5 year/60,000 mile warranty to the second owner. Most used cars already have the recall work done on them that is required. Most Certified Used Vehicles will come with a warranty from the manufacturer. Used cars do come with some risks that new cars do not. These risks include accidents, flooding, mechanical problems and/or body work. The best way to make sure that your used vehicle is safe from all these things is to work with a reputable car dealer that will warranty the vehicle for some amount of time. The only way to make sure you are covered is to work with someone who will stand behind their vehicles.

My opinion is that buying a used vehicle is the best decision financially. Find a car dealer that you trust, who has a good reputation, and will warranty their used vehicles. If you buy a vehicle with a warranty from a reputable dealer you take a lot of the risk out of buying a used car. New cars can be a great deal when they have deep discounts and great lease options. A discount lease on a new car can be a great way to take the risk of depreciation out of your car buying purchase, but that is a whole separate entry.

Happy Shopping!

Leasing Vs Financing is a hot debate for people shopping for a vehicle. To fully understand the debate you need to know what each is. A lease is where a company owns the vehicle and you are "renting" the vehicle. In a lease you are paying for the depreciation of the vehicle and a rent charge that is based off the sale price and the depreciation. Financing is where the vehicle is owned by the borrower and you pay principal and interest on the balance of the loan. You usually will borrow the out the door price less the down payment. Both have advantaged and disadvantages.
Financing
Advantages
With financing you will own the vehicle. If you decide to trade in the vehicle or drive it a hundred thousand miles there is no extra charge. If you put any accessories on the vehicle you are adding value to something that you own. Any damage to the vehicle will never cost money out of pocket.
Disadvantages
Some disadvantages are that financing usually has higher payments for the same term. If the vehicle depreciates at a high rate you will owe more money on a vehicle then it is worth. If you finance a vehicle you will have to pay state tax up front at the time of purchase.

Lease
Advantages
Leases will have a lower monthly payment then a financed vehicle. With a lease you don't own the vehicle so if it depreciates at a high rate you won't owe more then your lease agreement. At the end of the lease you can pay what you owe and walk away, even if the vehicle isn't worth much. Leases allow you to defer your state tax until you make your monthly payment.

Disadvantages
The largest disadvantage with a lease is that you don't own the vehicle. At the end of a lease you can either finance the vehicle to own it or you have to lease another vehicle, whereas a financed vehicle is "paid-off" at the end of the term. Leases also have charges at the end. If you go over mileage you will owe money for every mile over your allowed mileage. You will also owe for any excess wear and tear.

The Verdict
Leasing is a great option for owning a vehicle. Someone who leases a vehicle can have a $250 a month payment over ten years and never have to pay more then $250. That person can drive a Corvette for 3 years and then an Avalanche for another 3 years and then a Grand Prix for another 3 years. They will never owe more then $250 a month and can change to a brand new car every 3 years. Leasing also leaves you the option to pay for extra mileage up front and in most cases this per mile fee is less then the amount the car drops in value over that mile making it smarter to lease rather then finance. Damage to a lease vehicle can be very costly if you pay it at the end of the lease, however you can get the damage fixed beforehand and never be charged. Most people will fix damage to their vehicles so there is no advantage either way. My advice to you is if you want to have a specific payment on a vehicle, lease and you can pay that amount for the next 30 years and drive 10 new cars without ever owning something that isn't worth what you owe.