Don't Waste Your Money: When to buy or lease a vehicle - Toledo News Now, Breaking News, Weather, Sports, Toledo

Don't Waste Your Money: When to buy or lease a vehicle

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(Toledo News Now) -

New car sales are red hot in 2013.

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

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

Reasons To Lease

The average new car now costs more than $30,000. That makes the average loan payment $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 the same car for a lower payment. If it's a car with great residual value after three years, like a Honda Civic, your lease payment could be half a purchase payment.

According to car buying site Edmunds, leasing can be for you if:

-You're just starting out and have no down payment for a new car. 

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

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

-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 car prone to breaking down.

Reasons To Buy

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

Edmunds says you should purchase a car if:

-You expect to drive 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 cargo, like artwork, crafts, and dogs, because they may dent and cause damage to the car. Fees are high at a lease's trade-in time to fix any repairs.

-You want to make any modifications to it, including decals, a spoiler, or other cool features.

-You're hoping to build up a down payment for your next car. 

Remember, while leasing will typically get you a more expensive car than if you were buying, you have no equity at the end. Plus, you could become a serial leaser for the rest of your life.

Think hard so you don't waste your money.

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