Leasing cars is becoming more and more popular as the price of new vehicles continues to climb.
But is it the right option for you?
Jay Leno, pioneering car builder and host of CNBC’s ” Jay Leno’s Garage ,” would advise against it.
“I always think it’s better to buy a car,” he tells CNBC. “Everyone seems to lease now. Everyone thinks you can write off this and write off that, and to a certain extent, you can. But at the end of the lease, you don’t have anything.”
The comedian and former host of NBC’s “The Tonight Show” prefers ownership when it comes to most things: ” I don’t carry debt. I own everything. I own my buildings. I own my cars. That way, if it ends tomorrow, I know what I’ve got.”
There are pros and cons to both leasing and owning that you’ll want to consider.
Lease payments per month are typically cheaper than loan payments per month. Buying offers more flexibility, though: The car is yours to keep or sell, and you don’t have to worry about going over an annual mileage limit.
Plus, once you pay off your auto loan, you eliminate a fixed monthly cost and won’t have to worry about a car payment until you buy again.
In an ideal world, you’d pay for your car in cash and avoid loans completely, says Leno, who didn’t buy his first home until he had the cash to do so. After all, he says, “when you don’t have to write checks every month, you’re just better off.”