Should I Buy or Lease a New Car?

It's a tough question, but if you know your goals, you're halfway down the road to savings.

Buy the car if you plan to pay cash or keep the vehicle well beyond the time the loan is paid off. You will save money over leasing -- as long as you don’t trade in your car when it’s only a couple of years old. (Used-car values will be elevated for some time, just in case you do get the itch to move on.) Also, buying probably makes more sense than leasing if

Lease the car if you trade in every few years and tend to have a car payment all the time. Because you’re paying only for the depreciation over the term of the lease, monthly lease payments are lower than loan payments and you may be able to afford a more expensive car. If you match the lease term to the new-car warranty, repairs will be included for the life of your lease. And if you change your mind before the lease is up, you can probably find someone to take over the lease by using LeaseTrader.com or Swapalease.com.

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