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"Should I buy or lease a car?" is only the beginning of questions today’s buyers have when they are considering a new car. Also on the list are, How much should I pay? and, How should I finance? Luckily, today’s buyers also have more reliable resources and better information than ever before. We’ll take you through some popular websites, calculators and financing options, so you can cut through the clutter and dig into the information that answers the biggest question of all, How can I get the most for my money?

Start Online

Sites like Carvana and Truecar demystify car pricing and save you time and money. Carvana allows you to search its inventory of thousands of used cars by features you want, including body style, price and extras like heated seats and sunroofs. See a car you like? Access a free vehicle history report to help you make your decision. If it’s a yes, you can buy with cash, finance through your bank or other financial institution or through Carvana. Have the car delivered to you, or pick it up at one of their nine Carvana Vending Machines. If you need to fly and drive your new ride back home, Carvana even subsidizes $200 of your airfare. You may never set foot in a dealership again.

With Truecar, you can shop new or used and get an upfront, discounted price from a certified dealer in your area. The price includes all fees, accessory costs and incentives. They say it’s better than the price you’ll find elsewhere, because dealers compare information and compete for your business. And, it’s the price you would pay if you decided to buy. No haggling necessary.

Lease or Buy?

Once you know the best price for the car you want in your local area, determine whether you want to lease or buy. You may want to buy because you enjoy pride in ownership, for instance, or to lease because you savor the chance to drive home a new car every few years. But it’s important to consider worthwhile financial factors, including:

Your Mileage

Auto leases often have mileage restrictions. If you think you'll exceed those caps – 12,000 miles per year is common, according to LeaseGuide.com – you may choose to pay more in monthly payments for a higher mileage limit than pay penalties for excess mileage when you return the car.

How Long You Want the Car

Buying is often the best financial choice if you intend to keep a car for a long time. Yes, the vehicle depreciates in value, but it's yours once you pay it off, and you can one day sell it or use it to help you buy your next car. Lease and you have no equity unless you opt to purchase the vehicle after your lease agreement ends. But if you want to part before your lease term is up, it could get costly. You might be required to make the remaining lease payments and pay penalties. One consolation is that if your lease is transferable, you may be able to transfer it to someone through an online lease-swapping marketplace.

There are other long-term issues to consider. Cars with three-year leases generally are under the manufacturer's warranty, so aside from routine maintenance like oil changes and tire rotations, you likely won't have to pay for major repairs during your lease term. Of course, if you don't keep up your leased car's regular maintenance, or if you return it with more than just normal wear and tear, you can expect to pay penalties at the end of your lease term.

Taxes and Insurance

Taxes can have an impact on your buy vs. lease decision, and rules vary by state. According to LeaseGuide.com, while most states only charge sales tax on monthly lease payments and a down payment, some states require the entire sales tax to be paid up front. The amount could be based on the sum of the lease payments or the full sale price of the car. Find out what’s required in your state so you can best compare your options. Additionally, a vehicle leasing company may require you to get higher insurance coverage than you'd normally choose if you were to purchase the car.

Leasing and buying at least have one thing in common: You can negotiate in both scenarios. That means it pays to do your homework about leasing terms like capitalized cost, which, as you'll learn, is a fancy way to describe the leased car's price. By comparing costs, you can determine whether leasing or buying a car is the best bet for you. To make sure you have the best information, use a calculator, like this one from KeyBank, to weigh your options.

Our Best Tip? Get Approved for a Loan Before You Hit the Dealership

One way to make sure you get the best deal possible is to have a loan approved before you shop. With a loan in hand, you won’t be beholden to the car dealership’s financing options, and you can negotiate like cash buyer. You can easily research your bank’s auto loan options or shop around for rates at other financial institutions. Make sure to check out your bank’s relationship rates, preferred pricing and rates for customers with certain accounts. You may qualify already. Most banks will allow you to apply for your loan quickly online, so you can have your answer, and your money, available by the time you shop.

With so many innovative tools you can use to find and finance your purchase, you can buy (or lease!) your next car with peace of mind, while you save time and keep yourself on solid financial footing.

Disclosures

Credit applications are subject to credit approval.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on www.Key.com, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

Investment products offered through Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor.

Insurance products are offered through KeyCorp Insurance Agency USA, Inc. (KIA). KIS and KIA are affiliated with KeyBank National Association (KeyBank).

Investment and insurance products made available through KIS and KIA are:

NOT FDIC INSURED . NOT BANK GUARANTEED . MAY LOSE VALUE . NOT A DEPOSIT . NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY

KIS, KIA and KeyBank are separate entities, and when you buy or sell securities and insurance products you are doing business with KIS and/or KIA, and not KeyBank.

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