Final answer:
Anyone planning to replace their car every five years or less may be better off purchasing lower-mileage used cars. Leasing can be cost-effective for a newer vehicle but comes with mileage limitations and potential additional fees. Marvin, while used car shopping, should consider more than just price, such as dealer reputation and potential future repair costs.
Step-by-step explanation:
When deciding whether to buy a new or used car, there are several factors to consider. If someone plans to replace their car every five years or less, they may be better off purchasing lower-mileage used cars. While leasing is an alternative that allows for a newer vehicle with a smaller monthly payment, it can incur extra costs if the mileage exceeds 10,000 miles per year. Alternatively, buying used cars can come with risks related to maintenance and reliability, especially if purchased from a seller with questionable reputation or from places such as Craigslist. On the other hand, new cars come with warranties, but at the cost of higher initial expenses. The decision ultimately depends on balancing the risk of unexpected repair costs with the savings upfront.
Imagine Marvin is shopping for a used car and finds two similar options. One costs $4,000, while the other is priced at $4,600. The decision on which car Marvin should buy does not solely depend on the price. It is essential to consider the car's history, the dealer's reputation, potential warranty, and long-term costs. A careful assessment could lead to more significant savings and fewer trips to the repair shop.