Should you buy or lease your new car?

Don't Waste Your Money

Leases are the hottest thing when it comes to cars this year, with almost 25 percent of new cars now being leased. That's the greatest amount since the 2008 recession all but ended leasing for several years.

But when does it make sense to lease? And when should you stick with a purchase?

Reasons to Lease

The average new car now costs more than $30,000.

That makes the average loan payment now $464 a month, according to MSN/Money. For many potential car buyers, that's a deal breaker.

As a result, leasing is back in a big way because you get that same car for a lower payment. If it's a car with great residual value after three years (a Honda Civic, for example), your lease payment could be half a purchase payment.

The car buying site Edmunds.com says leasing can be for you if...

--You are just starting out, and have no down payment for a new car. If the choice is a brand new Chevrolet Spark or a 12-year-old clunker, most of us would choose the new car.

--You can afford a new car every four years. So with leasing, you just turn it in and start over again with new-car smell.

--You drive less than 10,000 miles a year. Leasing rewards low-mileage drivers, just as it penalizes high-mileage drivers (more below).

--You always want to be covered by a full warranty. With a basic car repair now $600 or more, this can be a real budget saver if you have a breakdown-prone car.

Reasons To Purchase

But there are times when buying makes better sense and when it doesn't pay to lease.

Edmunds.com says you should purchase a car if:

-You expect to go over the 10,000 or 12,000 annual mileage limit. Exceed the preset limits and you will pay dearly because the car will be worth less to the dealer at trade-in time.

-If you haul a lot of stuff (artwork, crafts, dogs) and may dent and ding up the car. Fees are high at lease trade-in time to fix anything that you messed up.

-You want to make any modifications to it, whether decals, a spoiler, or a really cool Fast & Furious exhaust system.

Remember: While leasing will typically get you into a more expensive car than you could by buying, you have no equity at the end.

And you could become a serial leaser the rest of your life.

So think hard so you don't waste your money.

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Don't Waste Your Money is a registered trademark of the EW Scripps Co.

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