Should You Lease or Buy a New Car?

I’ve bought a couple of cars over the past few months (one for work and one my own) and am always a bit confused when asked about whether or not to lease or buy. In some regards, leasing can be a better option; especially with the tax benefits.

On the other hand, when buying – once a car is paid for it’s basically a “free car” and if you take good care of it — a decent automobile could last you for 8 to 10 years.

I stumbled upon a rundown of Car Leasing vs. Buying yesterday from TrueCar.com, and found it quite useful. One of the 10 tips really stuck out :

“A lease will have an annual mileage cap. The norm is between 10,000-15,000 miles. Once you go over the specified mileage on your leasing contract, you will incur mileage charges. If you think you will go over the mileage cap, we recommend that you pre-pay for the additional miles at the time of signing, because it’s typically cheaper to pre-pay rather than to pay at the end of the lease. When you buy, there are no rules on mileage, the car is yours to drive as little or as much as you like.”

Other lessons include :

* Learning how to get the lowest, haggle-free price for a lease, and other factors that should be considered before signing a contract, or purchasing a vehicle.

* Whether you want less contractual restrictions on your car, or the security of an excellent all-inclusive warrantee, there are options each consumer must consider.

When you’re ready to make a choice, consider this last tip: while leasing a car will give you a fresh, sexy vehicle every other year, owning a car will give you equity that can be liquidated in times of crisis.

This is a guest post by Alan Craiger.

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