Is it better to buy or lease a car?
I need a new car and the dealer is pushing me toward leasing because the monthly payment is lower. But my dad says leasing is throwing money away because you don't own anything at the end. What are the real pros and cons? I drive about 12,000 miles a year and like getting a new car every 3-4 years.
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4 Answers
The biggest financial mistake I see people make is not having an emergency fund. Before investing, before paying extra on debt, save 3-6 months of expenses in a savings account. This protects you from going into debt when unexpected things happen.
My parents told me the same thing and they were right. But everyone's situation is different. Run the numbers for your specific situation before making a decision. There are good calculators online that account for all the variables.
Don't make a big financial decision when you're stressed or excited. Sleep on it. The dealership, the realtor, the salesman all want you to decide RIGHT NOW because pressure works in their favor. Walking away is always an option.
Pay off your highest-interest debt first — that's almost always credit cards at 18-22%. There's no investment that reliably beats paying off an 18% credit card. It's a guaranteed return. Knock that out before you even think about the stock market.
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