By Bruce Watson

Filed under: How to Save Money, Car Buying, Auto Loans, Consumer Issues

The debate over whether it’s better to buy or lease a car is nothing new: Salesmen and experts, consumer advocates and finance writers have argued over the merits of leasing for decades. But between the still-shaky job market and Americans’ stagnant wages, the question of whether it’s better to own your rolling iron or rent it has taken on an additional urgency.

To get a better feel for the costs and benefits of leasing versus buying, we asked DailyFinance’s readers to tell us about their experiences — and you had a lot to say.

Investment

For a lot of car buyers, investment is a big concern — and a complex one. After all, as a car ages, it depreciates in value, particularly during the first few years of ownership. Then you have to add in maintenance costs, which rise as a car gets older, making the vehicle that much more expensive to maintain during a period when it has already become worth far less. To further complicate things, these all tend to happen not so long after most people finish paying off their car loans.

One reader, Jacqueline Price, advocated ownership, noting that, when you buy a car, “At least you have something that is yours after you pay it off.” Not only does this nicely shortcut the issue of buying a lease car at the end of the term, which Jacqueline notes can “costs a fortune,” it has another bright side: “It is nice to look forward to not having a car payment.”

“Redwolf0849” echoes Jacqueline’s concerns, asking “Why put thousands up front to lease a car when you can use it as a deposit on a car you buy?” “Joe” offers a similar perspective, noting that “I have learned over the years that the most economical way to get around is to buy a high quality new car, take care of it, and keep it until it won’t run anymore.” That way, he claims, “You get the new car experience, beat the new car depreciation curve and you know what has and has not been done to the car.”

But the investment issue can cut both ways. One reader, “Virginia,” argues that the question is whether it’s wiser to “invest $20,000 or more in an asset that depreciates in value, or in an asset that appreciates and generates income.” Noting that all new cars lose some of their value, she goes on to point out that they are often technically inferior. After all, she writes, “safety features are constantly improving each new car year,” and a 10-year-old car lacks “all the improvements in rear mirrors, side air bags, and tire pressure readouts” that have developed over the last decade.

Virginia notes that leasing makes it possible to get a …read more
Source: FULL ARTICLE at DailyFinance