When looking to get a new automobile, the question is, should you lease it or should you buy it?
From a financial planning standpoint, buying it is a better recommendation. The key is to buy it and use it for at least 4 to 5 years.
One of the problems with leasing is you’re always making a payment on it. If you lease your entire life, you will always be paying and you won’t be getting anything for it. You don’t actually own the car when you lease it. That means it’s kind of like renting an apartment versus buying a house, you never have anything in the end to show for it.
There are also a couple of other drawbacks to leasing. For one, if there are any damages done to the car when you go to turn it in, they are going to charge you for it. If you own the car and you get a scratch on it, no big deal.
Finally, there are mileage limitations on leases. Many people think they can stay within the mileage limitations, but things usually come up. If there's an emergency and you need to drive to Florida, for example, the trip will end up costing a lot in mileage.
So, from a financial planning standpoint, buy a car, make payments on it for three or four years, then go a year or two without making payments and driving that car. If you do this your entire life, you will come out much more ahead financially.
