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Car Q&A: Leasing versus buying?

Find out if you should lease or buy your next car.

Should I buy a car or lease one? Which option makes more sense financially?

It depends on your financial situation and your priorities, but in the long run, most people will save money if they buy. Why?

Basically, anyone who plans to keep a car for 5 to 10 years should buy. If you don't have much equity or cash to put against a down payment and you want to keep the monthly payments low; however, leasing might be the better option. It would allow you to get a new car every two to three years (hey, some people just can't commit to a red coupe), and you'd get to take advantage of the latest technology and safety features as you keep trading up.

The downsides to leasing? There are limits on mileage (you might pay for going over), and you won't be building equity. Plus, when you turn it in, there will be a close inspection for wear and tear, and you might be charged extra. And leases are hard to break if your needs change (like you get a new job with a company car), so be very confident when making your choice.

-- The Nest Editors

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