7 On Your Side
Leasing vs. buying a car
NEW YORK (WABC) -- Choosing a new car can be tough enough, deciding whether to lease or buy it can be overwhelming to the average consumer.
So what's the right choice for you?
Before you step foot inside a dealership do some research first.
Look up the car you want on websites like Kelly Blue Book or Edmunds.com, to see the "invoice price", that's what the dealer paid the car maker for your car.
Next figure out how much you can afford as a down payment and what your monthly payments will be.
Some advantages of leasing are your cash outlay upfront will be less.
Monthly lease costs are almost always less than payments if you buy a car.
"Those buyers who have decided on a lease and are at dealership ready to start negotiating should try to avoid focusing on payment although you may know you can afford $200 or $250 a month don't disclose that to the dealer up front," said John Giamalvo, of Edmunds.com
Lessees should negotiate on the vehicle price first, work off the invoice price, not the sticker or MSRP.
The biggest factor is how much you drive. Leases limit the amount of miles you can put on the car, with financial penalties if you go over.
Leases are great if you want to drive a new car every few years and don't care if have equity in your car.
"The old attitude is that you buy what appreciates and lease what depreciates a car is a depreciating asset so ultimately whatever your paid for that much today it's not going to be worth that tomorrow," said Roger Ziontz, of Town Motor Audi.
Dealers now lease more cars than they sell and many more consumers are opting to buy their vehicles at lease end.
The advantages of buying a car are ownership.
If you purchase a car and pay it off you'll eventually own it outright, freeing yourself from car payments.
The disadvantage is that generally you'll put more money down and monthly payments will be higher.
Whether you plan to buy or lease ask about sales deals or incentives, dealers are anxious to make a deal which means you can drive the price.
"Absolutely negotiate there's inventory out there that's available and the want and desire to sell and move units keep the car going over the curb," Ziontz said.
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