Angie's List: Car Leasing - KULR-8 Television, Billings, MT

Angie's List: Car Leasing

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Automakers are rolling out new models and dealers are trying to get you in the door. You may be tempted to update your ride, but is leasing right for you? In this Angie's List report, KULR 8's Stella Daskalakis has the pros and cons of leasing a car.

"When we compared both costs we realized that we were better off leasing, and again, considering the fact that we only wanted it for a short period and then needing a new car after several years," says Citrana Harmon Forgenie.

Auto experts say a brand new car can depreciate in value by up to 20% as soon as it's driven off the lot. Jeff Roush, a car dealership general manager, says leasing is a very common option.

"Leasing is really back in a big way. We run anywhere right now from 40-50 percent lease of all our new vehicles."

Lease payments are generally lower than loan payments. Monthly lease payments can range from $160 to well over $1,000 depending on the vehicle's make and model. A typical least lasts for 36 months though some dealerships offer them for 1 to 5 years.

"Additionally, remember that if you are leasing there is usually limitations on mileage so if your office is a long distance from your home you want to be careful you have enough miles on the lease," says Angie Hicks, founder of Angie's List.

Whether you lease or buy, it's important to do your research, know what you want, what you can afford, and fully understand the lease before signing.

"You don't own that car. The lender owns that car. So when they get it back they'll allow you to have some wear and tear, but it can't be all beat up or they will charge you. Those are things you need to consider prior to committing yourself to a lease."

"In our leasing agreement all the maintenance is included and one of the good things about it is that when we take the car in for servicing we get a car available to us for that day and we also get free roadside assistance."

You might also want to check into gap insurance. In case of a wreck gap insurance will cover the difference between the car's actual value and the remaining balance to pay off the lease.

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