To Buy or to Lease a Car?

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Monthly costs: Lease payments are usually lower than purchase payments because you only have to pay for the "part" of the car that you "use" during the years of the lease. You will also have to pay something called the "rent charge," "lease charge" or "money factor." This is similar to an interest rate when you're financing a car.

Maintenance costs: Keep in mind, you are responsible for maintaining and repairing the car, even though after two to five years it won't be yours anymore. Some lease deals include maintenance, but may charge you a "deductible" each time you go to the shop.

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Penalties: You may have to pay fines for moving away from the area where you leased the car or turning the car in early, among others.

End-of-lease costs: Many leases contain yearly mileage caps of 12,000 to 15,000. Exceed the cap and you could be forced to pay up to 25 cents a mile for every extra mile you've traveled.

You may also owe for extra wear and tear to the vehicle. If you want to buy the car at the end of the lease, you'll have to pay for the car and pay a fee for that privilege. Well, isn't that special?

If you don't want to buy the car, you may have to pay a "vehicle disposition charge" for the dealer to prepare your car for sale.

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