Buy or lease a car: Andy's guidelines - WMC Action News 5 - Memphis, Tennessee

Reported By Andy Wise

Buy or lease a car: Andy's guidelines

Leasing a car is a great option these days.

You don't have to have a down payment. You can often drive more car than you would normally be able to afford, and some lease options allow you to keep the manufacturer's warranty.

Now for the downside...

At the end of the lease, you have no equity -- no trade value -- to put toward a new car.  There are also those "end-of-the-lease" fees:

EXCESS MILEAGE. Most car leases have a set maximum mileage. You go over that, you pay -- sometimes in the hundreds of dollars.

* EXCESS WEAR & TEAR. If you didn't keep it in good condition, you pay more.  Dealers have a way of finding that one scratch or dent that you didn't notice before!

HIGHER INSURANCE PREMIUMS. Insurance companies tend to charge more for insurance on a lease than on a financed or purchased vehicle. The car's really not your own, from the insurance company's point-of-view. Higher risk.

So who should NOT lease?  Here's what Consumer Reports says:

* DRIVERS WHO ARE HARD ON VEHICLES.  They'll get hammered with the excess wear & tear charges.

* DRIVERS WITH SMALL CHILDREN.  Those little guys can do some damage!

* DRIVERS...WHO DON'T REALLY DRIVE.  If you don't spend a lot of time on the road, the higher insurance rates and the fact that you may turn the car in early and suffer an early lease cancellation penalty makes leasing a bad idea.

Interest rates are at all-time lows, making it easier to finance a car.  Consider that if you're comparing the cost of buying/financing versus the cost of leasing.

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