Monday, April 9, 2012
Money Monday: Buying vs Leasing
It's a dilemma that can drive you crazy. You want a new car but should you buy or lease? 7's Lynn Martinez has some answers in tonight's "Money Monday."
WSVN -- Larry Aronstam never buys his cars.
Larry Aronstam: "I've been leasing cars approximately 30 years."
He loves driving a new car so for him leasing is the only way to go.
Larry Aronstam: "I change my car every three years so I never worry about having to have the car repaired or anything like that because I'm under warranty. By the time the warranty is due it's time for me to change and get a new car."
Larry also likes that leasing means: No dow npayment and lower monthly payments.
Greg Muir: "The average person who finances that car is going to have a payment in the mid to upper 50s with approved credit. When you lease the car you're going to be in the upper 30s so that's a significant difference."
But there are rules to the road when you lease. You have to have a high credit score to qualify. You can't exceed the yearly set mileage usually around 12,000 miles per year. And going over that limit will cost you and you'll pay for nicks or dings.
Scott Fanelli of edmunds.com says for many, the biggest drawback to leasing is never actually owning the car.
Scott Fanelli: "You're always going to have a payment so you're never going to have that time period where you are no longer paying for a vehicle. You're always going to have that monthly payment that's due so in the long term it is cheaper to buy a car."
If you buy, you can also customize the car and drive as many miles as you like penalty free.
Scott Finelli: "So if you want to drive it till the wheels fall off that's your option."
But buying does require a substantial down payment, higher monthly payments and the continued cost of maintenance. The experts say take a hard look at your driving habits before you decide.
Greg Muir: "Its all about your driving pattern. How many miles a year do you drive? And can you make the lease work within your limitations."
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