By Jim Donovan
PHILADELPHIA (CBS) — Many people set aside long holiday weekends like that of Presidents’ Day to shop for cars and low interest rates recently have certainly helped to fuel car sales. But what if you’re on the fence about whether to buy or lease? 3 On Your Side Consumer Reporter Jim Donovan looks at what factors you should consider.
Patty Hidalgo says she can’t afford to own a Lexus SUV, but she can afford to lease one. She says, “I can drive a luxury car without paying the price tag I’d have to pay if I purchased it.” Patty has been leasing for over a decade and likes trading her car for a new one at the end of each contract. According to Patty, “I just like having a new car every 3 years because I give it back before the problems start happening.” But that convenience comes at a price. Leasing means always having a car payment.
Buying comes with higher monthly payments, but you will eventually pay off the loan and own the car. Rebates and incentives for new cars are abundant for buyers right now. In some cases, these offers might make buying significantly less expensive than leasing.
How much you drive is also a factor. Leasing comes with mileage restrictions. Drive over the limit and you’ll pay more. Patty stays within her mileage limits and doesn’t care that she never actually owns the car. She says, “At the end of the day it’s not worth much because cars depreciate.”
If you’re in the market for a new car, but didn’t get around to checking out some models this weekend, the automotive experts at Edmunds.com have a great 3-day plan for buyers that go car shopping on long holiday weekends. It gives you a step-by-step guide on what to do each day so that you walk away with a good deal. To check it out, visit: http://www.edmunds.com/car-buying/