Buy Or Lease A Car: Strategy For Savings

You are looking to buy or lease a car, and you want to save some money while doing it. The best strategy for savings is to consider your specific driving and financial situations and to make the decision based on those. Here are some useful tips to help you save money on your car lease or purchase.

Determine your mileage

This strategy is really simple: If you're going to be putting a lot of miles on your car, don't lease it. Leases tend to limit yearly mileage to 12,000 to 15,000 miles, so if you plan on going way over those limits, you'll be hit with some significant overage charges. For a lot of driving, you should be buying.

Short-term vs long-term costs

Leasing is always cheaper than buying in the short-term. Leases typically require little or no down payment and their monthly payments are generally lower than monthly payments for a purchased vehicle. However, remember about those pesky mileage overage charges and wear and tear charges that are common with leases. These charges can add up and cost you quite a bit of money down the road if you are not careful. As for the long-term outlook, buying may save you some money, as you may eventually pay off your vehicle and free yourself from monthly payments. Just remember to take care of your car, as the manufacturer's warranty will eventually expire, and you'll be responsible for its maintenance.

General buying tips

If you are set on buying a new car, look for an auto loan that will offer very low or no interest percentage. It is much easier to buy a car when you know that you are only paying for what you bought, as opposed to paying for your purchase plus extra money for financing interest. If you don't have your heart absolutely set on a new vehicle, quality used cars can really give you a great value for your money. Since new cars tend to depreciate so quickly after they are driven off of the lot, a late-model used car that is in great condition can feel like a new car for a fraction of the price. You should also do some research about the vehicle you are considering to see how likely it is to need costly repairs and how well it may hold its value in the future.

General leasing tips

Some types of vehicles will have generally higher residual values than others, so be sure to consider cars that will hold their value. Also, don't be scared to do a little bit of bargaining. Try and get quoted for a lower retail price and a lower residual value by the lessor. A lower quoted retail price and a lower residual value will surely help lower your monthly lease payments.

Saving money on a car may take a bit of research, time, and effort, but it is surely not rocket science. Be sure to understand your financial situation and what you want out of your vehicle. Once you do, you should be able to effectively develop a strategy for saving big bucks on your next car.