Value of a new car depreciates the most in the first year. Buying a one or two year old car with low mileage is not a bad idea, as long as the car is in good mechanical and cosmetic condition.
Buying a car on cash or getting it financed through a bank is really a matter of ones financial resources and commitments. In case of financing, the price of the car will be a lot more than what the cash price is today. You are going to pay finance charges over period of the loan. In cash transaction, that is not the case, obviously.
Leasing a vehicle is different from financing it. Lease is like renting a car; just the rent is very low compared to a true rental. You have the option to buy the car at a fixed price, stated in the lease terms, at the end of the lease, or you could just walk away. Lease payments are much lower than traditional car loan payments. Considering drastic depreciation of a new cars value in the first year, it is not a bad idea to lease a new car, since at the end of the lease term, generally 4 or 5 years, the depreciation in the value is quite comparable to the lease amount paid thus far.
