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Should I Lease or Should I Buy?
Is it time for you to get a new car? Whether you're updating your current automobile for another or getting your first car, there are several issues to consider during the hunt for your next vehicle. The average auto shopper spends about two months researching, locating, and selecting a car, and one of the most popular questions posed is whether to lease or buy.

Many of you know about the concept of buying a car, but how does it differ from leasing? In a nutshell, it's all about what you're financing - the purchase or use of the auto. If you plan on buying, you will most likely finance the automobile purchase by obtaining a loan. You and the lender will both be on the Certificate of Title until you pay off your loan. A loan consists of the principal, or the vehicle purchase price, and interest.

For those of you planning to lease a car, you will be financing the use of the vehicle. A lease consists of the depreciation cost - the amount the car depreciates for the length of time you have that car, and the finance charge, which is the interest on the amount of money put in by the leasing company for the car.

The following chart provides a breakdown of key issues when trying to decide between buying a car vs. leasing a car. For each question, an "X" in the appropriate column marks whether it is typically more favorable to buy or lease. Please keep in mind, these are general points to help start thinking about your next big ticket item. Ultimately, after you have done your research, you will have to make a decision that you should feel confident about when you finally sign on the dotted line.

Questions Better To Buy Better To Lease
Do you prefer to own something of value after making payments for several years? X  
Do you want to get a new vehicle every two or three years?   X
Don't want to worry about penalties if you change your mind about the terms, such as early termination of lease? X  
Do you hate the hassle of selling your old car every time you want to buy a new one?   X
Do you plan to put a lot of miles on your car (over 12,000 - 15,000 a year)? X  
Do you want to eventually be free of car payments? X  
Do you want to be able to 'test drive' a car for a few years before ownership?   X
Do you want to drive away with a new car without down payment or trade in (depending on factors such as credit and auto dealer)?   X
Do you want lower monthly payments (using the same car for consideration)?   X
Do you want to be able to customize or modify vehicle? X  
Do you want a factory warranty that usually covers vehicle for as long as you have it?   X
Don't want to have to keep vehicle in showroom shape? X  

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