I feel the whole “emergency” situations can go both ways. If you have debt and all of a sudden you or your spouse lose your jobs it could definitely make making those payments much more difficult.

 

Like Randy said, it’s a good discussion regardless of what side of the coin one falls.

 

That’s true too. I’ve lived on both sides. I mismanaged money in my 20’s (though not anywhere near to the point of being in big trouble), and then for most of my 30’s I carried no debt except my car and house. Now I’ve selectively, and carefully added some small debt and a few credit cards to maximize rewards, which provide me thousands of dollars in value every year (airline tickets and cash back). What little debt I carry has improved my financial situation and net worth substantially over my “cash only” days.

The classic answer - it depends. (And do not rule out leasing)

 

I have been on all sides of this equation since 2000. And - the best option depends on who and how and how long you plan to keep the vehicle.

 

Buying new:

 

The last new vehicle we bought out-right was a 2005 Suburban. Was expensive - even then. We were done with lease on mini-van (explain why leased below) and needed the Burb when our kids went into travel hockey. Paid some down, got every discount available and even got a GM credit card for the points a year before we bought it and used it to reduce the price. Still took out a 5 year loan on what was left. The good news - still have the vehicle and was worth buying and keeping.

 

Buying used.

 

Bought a 6 year old BMW X5 used that had 90,000 miles on it. I did OK for a few years but maintenance was always high (hey, its a BMW...nothing is cheap on them). Then it hit its second mid-life around 130.000 and we spent at least $1,500 a year on it for 3-4 straight years.

 

My son bought a low-mileage Gulf GTI VW from CarMax. He has had very good luck with it and loves it.

 

Held onto a 2001 Avalon until recently. Over 200,000 miles. Most carefree 18 year old car ever. No major work ever needed.

 

Leasing.

 

I got into leasing because I wanted to keep the wife in a newer, low maintenance vehicle many years ago. I was traveling for business a lot and had no time for vehicle care. So 3 year leases were good - you just had to negotiate them well since the dealers would make bad leases look good if only compared to buying. My first lease negotiation was a $100 swing in monthly payments. When the guy asked why I thought it should be that I gave him my printed spreadsheet. He came back and said - ok we can do your numbers. That was the problem with leases in the early days - a lease that was $100 month more than it should be still looked good compared to buying. For a 3 years lease that would mean the dealer made $3,600 that they should not have on a lease.

 

Now we use the wife car for trips and weekends and she drives each day to work. So we still lease hers. Reason is still the same (mostly) - an almost no maintenance vehicle for her and she does ike her NX with all the toys. I am driving the Burb with over 200,000 miles on it. Work from home when not traveling and it just needs to get the airport during the week. And it is still the hauler for the kids as they move apartments, houses, etc.

 

Used car loans from our CU are around 2.5% and the money factor on leases continues to be ridiculously cheap (also around 2-3%. So borrowing or leasing does not carry a heavy burden at these rates.

 

Good luck.

@MJAlltheWay24 , I don't know what specific vehicle you're looking for (and really, it's none of my business), and I know you're probably under a time crunch...but, I'm concerned that you've only mentioned three possibilities (new, 1 year old, and 3 year old w/accident history.) I would highly suggest you widen your search area to more than just your "local" area.

 

About a decade ago, when I was looking for my first truck, I searched not only Kentucky/Ohio/Indiana, but also West Va., Pennsylvania, Michigan, Illinois, and Tennessee with regularity. Basically anywhere where I could drive within a day was on my radar. I was even "this close" to flying to Texas to get one, before I found one 8 hours away in northern Michigan (Cheboygan). I got the Carfax sent to me, and requested a boatload of additional pictures from the dealer. Once I was satisfied that this was the one, the dealer even agreed to meet me halfway. After a brief test drive, we finalized the deal in a Cabela's parking lot not too far away from Toledo.

 

But, I guess what I'm getting at is, if I had limited myself to just the Greater Cincinnati area...I would've never got the truck I got. I would've had to "settle" in one way or another. I know you might be under a time crunch that I wasn't...but it may still be worth your while to exhaust some other areas' availability.