Which is better for you? 7 On Your Side explains leasing vs. buying your vehicle
NEW YORK (WABC) -- If you're in the market for a new car and went looking recently you may have had sticker shock.
New vehicles are very expensive and a lot of people are holding onto their cars which means less good used inventory.
If you're weighing the option to lease or buy we've got you covered.
Are you hard on your cars? The Tri-State area has some rough potholes, nails on the road, and stop-and-go soul-crushing traffic.
Our cars take a lot more of a beating in and around the Big Apple from bumper-to-bumper traffic than in the rest of the country.
If you're weighing whether to lease or buy, you want to think about if you are driving in the suburbs or if you commuting and putting a lot of miles on your car.
Cars cost about 30% more now than they were in 2020. But, the good news is prices are falling slightly.
The average price of a new car has a Manufacturers Suggested Retail Price (MSRP) of $47,000.
Most of us will haggle that price down, but keep in mind most dealers have a markup of between 5 and 7%.
So right off the bat, know that asking for $5,000 off that price is out of the question.
You can ask for incentives like rebates, military, student, and corporate discounts.
A lot of companies have relationships with car manufacturers. You can get a fleet code which is worth $1,000 off.
When you are shopping and deciding whether to lease or buy, first you need to know how much you are driving.
If you're commuting to and from work, and taking your kids to travel baseball, basketball, soccer, or some other activity, and you're putting more than 10,000-12,000 miles on your car, you probably don't want to lease because you'll be over the allotment and start getting dinged for anywhere from 10 to 50 cents a mile. That really adds up.
Let's look at the pros and cons of leasing versus buying.
With a lease, you'll have a lower monthly payment, but you can get a more expensive, better-equipped vehicle.
You'll always be driving a new car and in most cases, never have to pay for oil changes or maintenance, so there are no big repair bills.
On the downside, you are making endless car payments. You may have an early termination fee and mileage restrictions as well.
If you like the idea of having something and paying it off, buying may be for you.
Eventually, you'll have no payments and own an asset that you'll have the option to one day sell or trade-in.
You can forget about mileage limits, but, because you'll have a higher monthly payment, you're going to be looking at a lower spectrum affordable car,
You will be responsible for any repairs and maintenance once your warranty ends.
Labor and parts can get pricey and crush your budget, even if something minor goes wrong.
Going green can pay off on electric cars with state and federal tax credits ranging from $4,000 to $7,500.
Keep in mind there's a limited allotment and the rebates vary based on what type of car purchase or lease qualifies, down to the actual kilowatt.
Read more on how to get a rebate HERE.
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