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Car Buying Options

Car Buying Options
Authored By: TCT FCU on 3/17/2023

There are pros and cons to each option. Your best choice will be based on various financial considerations, your driving habits, and personal preferences.

Buying Pre-Owned

Buying a used car is appealing to many people. Used cars are less expensive up-front, and they have the added benefit of not depreciating instantly (more on that later). Because you’re buying a used car and saving sometimes up to 25-30%, you can usually afford to buy a higher class of car than you could if you bought it new.

Buying New

New cars offer peace of mind and ease of purchase, however, one big drawback is depreciation. Depreciation is when something loses value over time. Everything depreciates, but new cars suffer a big hit almost instantly. Basically, the value of the car drops dramatically as soon as it leaves the lot. In many cases, it drops by as much as 20%! That means if you were to buy a new car for $25,000, it would be worth up to $5,000 less the moment it became yours.


The biggest benefit to leasing rather than buying is that you can get more car for your dollar. When you lease, you don't pay on the full purchase price of the car, rather, you pay on the depreciation of the car. This means if you lease a $25,000 car for 3 years, and the anticipated value of the car at the end of the 3 years is $15,000, you only make payments on that $10,000 difference. If you had purchased the car, you would make payments on $25,000. The drawback, however, is that the money you are spending isn't investing in an asset, it's simply spending money. Like renting instead of buying, you are not purchasing any equity in an asset you can later sell.

Payment Saver

A fourth option is our unique Payment Saver Auto Loan. Similar to a lease, your monthly payment is based on the difference between the car’s current value and the anticipated value at the end of your loan term. However, with a Payment Saver Auto Loan, the anticipated future value is guaranteed. That means there are no surprises. Plus, unlike a lease, you own the vehicle. It is titled in your name and you have all of the flexibility and benefits that come with vehicle ownership. At the end of your loan term, you have the option to simply return the vehicle, or at any time you may trade or sell it, or refinance the remainder of your loan and keep it.

With ever-rising car prices, a new car is more out of reach than ever for many. This can make a Payment Saver Auto Loan all the more attractive.

In March, TCT launched a new tool called EZ Car Finder where you can shop new & used vehicles, and compare estimated monthly payments for a Conventional and a Payment Saver Auto Loan. Your dream car may be within your reach!

Try EZ Car Finder

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If you have additional questions, call us at 1-800-721-8288 or visit a TCT branch to meet with a Member Service Specialist. 

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