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People who lease a car are often more concerned with the short-term picture.

Leasing a car usually takes a smaller down payment and creates lower monthly payments than buying. The payments correspond to the amount the car is expected to depreciate, not to the full purchase price. If a dealer estimates a car will lose half of its value over a three-year lease, leaving it worth $13,500, payments will be $375 a month.

But buying a car requires paying for the car’s entire value divided by the duration of the loan. A $27,000 car with a three-year loan will require payments of $750 a month, plus interest.

Still, it’s usually better from a financial perspective to buy rather than lease, even though the payments are lower. Why? Because once the lease ends, you have no equity in the car. Leases also contain higher finance charges and upfront costs.

Buying also provides more flexibility. Leases typically come with mile limits of 12,000 to 15,000 a year that trigger hefty penalties if exceeded. Owning comes with no such mile limitations. Owning also allows you to change the car to suit your tastes; leasing does not. And leases can be complicated.

The advantages to leasing are lower down payments and monthly expenses. Some people also like driving a new car every few years, which is a pleasure that leasing accommodates. But buying makes more financial sense in the long run.

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