If you drive more than 12,000 or 15,000 miles a year,...

If you drive more than 12,000 or 15,000 miles a year, it might make more sense to buy your car. Credit: Getty Images/iStockphoto/Ridofranz

October ushers in the traditional car-shopping season. If you’re in the market for a new ride, you may be wondering: Should I buy or lease?

Why lease?

You’ll have lower monthly payments than if you bought the same car, repairs are typically covered by warranty, and as for a down payment, it will be lower -- or you may not have one.  “You can trade up frequently, allowing you access to the latest in advanced safety and technology features in your car,” says Alissa Todd, a wealth adviser with The Wealth Advising Consulting Group in San Diego.

Ask yourself questions

How long do you plan to keep the car? Leases typically run for two to four years. “If you like driving a new car every few years, lease. If you prefer to keep a car long term, buy,” says Kerim Tulun, a certified financial planner with Vanderbilt Financial Group in Woodbury.

How much monthly payment can you afford? When you buy, your payments are based on the car’s total purchase price. Compare this with leasing. Payments are based on the car's expected decrease in value over the term of the lease.

Analyze your driving habits. A typical lease includes 12,000 to 15,000 miles annually. Exceed this and you’ll pay extra at the end of your lease. Most lease agreements allow normal wear and tear. You pay for non-warranty repairs. “If you’re tough on your car, leasing may not be best for you,” Tulun said. 

The cons of leasing

See the big picture, says Christopher Congema, a certified financial planner with Landmark Wealth Management in Melville. “Financially, it’s often more advantageous to buy because eventually the payments stop. Once they do you can really add to your savings.”

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