Should You Lease or Buy?
"There's no one right answer for every family," says Chris Jacobs, spokesperson for eBay Motors. "The best option for you depends on your personal financial history and how long you tend to keep your cars." Buying and leasing are different ways of financing a car, so you have to decide which is more important: having new wheels every two or three years with relatively low monthly payments (leasing) or having higher monthly payments at first but owning the car debt free after several years (buying). Here, the rundown for each option:
- Leasing If you want a new car and low monthly payments, this might suit your budget. It's also a good option if you want to map out your exact car costs, since repair costs are typically built into your fee. Another big advantage: There's no huge down payment.
- Buying "If you keep your cars for more than three years, you're better off buying," Jacobs says. At that point, you've likely already paid off much of your car loan. Another important consideration: annual mileage. If you drive more than about 12,000 miles a year, leasing probably isn't a good option, as leased cars typically have low mileage allowances (driving extra miles can cost you 20 cents per mile). Then again, everything's negotiable.