Buying comes with some obvious pluses -- drive the new vehicle right and take care of it and it can be worth every penny you paid for it and when you finish paying, you own it. Along the way, it will probably be worth more than you owe in case you have to get out of it.

Leasing is a good move if you're someone who wants the very latest make, puts fewer than 15,000 miles (or whatever your lease limit is) a year on your car and treats it with kid gloves. Leasing generally offers lower monthly payments, too. But if you drive a lot of miles, treat your car like a workhorse and you're not sure how long you really want to keep it, maybe leasing isn't for you.
 

Only the prepared survive
Knowledge and strategy are the keys to negotiating a good leasing deal.

Ignorance -- not knowing terminology or how the lease works, or not being told all of those details by the dealer or lease company -- is the main factor in paying too much for a lease. In Florida alone, the state attorney general's office has identified 40 types of fraud in leasing. Most rely on customer ignorance to work.

State attorneys general, consumer groups and lawyers have developed The Reality Checklist for Vehicle Leasing and they claim that an uninformed would-be leaser could be hurt by as much as $4,000 in a single lease.

One thing to keep in mind: A lot of drivers pay thousands more to lease the same car they went in to buy. Commonly, these buyers are talked into a lease without understanding all the leasing details. To find out if leasing makes the most financial sense for you, answer the questions in this calculator.

Leasing gives dealers more options, more places to give and take than buying does. Make sure you are perfectly clear on every step along the way and know exactly what you are paying, when and what for, before you sign a lease.

What you are doing in a lease is paying for the difference between the value of the car brand new on the showroom floor (the capitalized cost) and the amount the dealer reckons it will be worth when you bring it back at the end of the lease (the residual value).
 

Costs are the key

So be sure you know what you are paying for the car (the capitalized cost) just as you would if you were buying. One key is to know how much that new car is worth before you hit the showroom. Start on the Net.

After you go to the showroom and get to haggling on the price, make you sure are clear on the capitalized costs before you sign! That cost is also a good basis for comparison-shopping lease deals from different dealers.

That's not the only basic question to have answered with complete clarity when you bargain.

Remember that a lot of numbers have to line up, just like buying. No down payment is fine, but that saving will probably be balanced out in the costs somewhere else in the lease. So perhaps a down payment and a different lease length or better mileage allowance would be a better deal for you.

Your lease may allow you to purchase the vehicle when the lease is up. Find out what the costs would be (it is usually the residual value stated in the lease). That figure plus your total costs from start to finish of the lease will tell you what it will cost to own that car in three years (or whatever the lease term is) down the road.

Before you lease, consider whether you would buy the vehicle at the end of the lease. You may have no intention of doing it -- but consider this "emergency planning" and know what it would cost, just in case. If the figure is outrageous, maybe you're not looking at the best lease deal.

And always remember to read every single word and number in the lease -- and be sure you understand them -- before you sign anything.