The Lowdown on Buying vs. Leasing

Congratulations -- you've decided to get a new car. But now comes the hard part: buy or lease?

Which option you choose depends on financial priorities. Some factors to consider include how much you can afford in monthly payments, amount of cash on hand for a down payment and expected number of driving miles a year.

With leasing, you pay the difference between the car's sticker price and value when the lease ends, called residual value. Lease payments cover this change in value along with financing charges, fees and taxes. As a result, leasing is a good option for business travelers or people who like exchanging cars every few years and drive fewer than 15,000 miles a year. (Mileage is important because the higher a car's mileage, the lower its residual value.) ...