Whether to buy or lease your next car

	Your answers to these questions may help you decide whether to buy or lease your next car.

When the time comes for you to choose your next car, will you buy it or lease it? Your answers to these questions may help you decide:

How long do you intend to keep the car?
If you typically switch cars every few years, you may want to consider leasing. Car values usually depreciate most rapidly during the first few years, so buying and selling every couple of years can be a costly strategy. Buying may make more sense if you tend to keep your car for several years. Once it is paid off, you can enjoy driving it without payments. With a leased car, lease payments continue for as long as you have the car.

How well do you usually maintain your car?
Even if a leased car might be under full warranty for the entire time you have the vehicle, lease agreements generally hold you responsible for all routine maintenance (e.g., oil changes) and wear-and-tear repairs (e.g., replacing brake pads). You also will probably be required to repair damage — even minor dents in the exterior and stains in the upholstery that you might not bother repairing on a car you own — before returning the vehicle. With a car you own, the maintenance is totally up to you, although you should keep in mind how the level of maintenance may affect your car's life span and resale/trade-in value. Also keep in mind that cars tend to need more repairs as they age.

How many miles do you typically drive per year?
Most lease agreements include a mileage allowance, typically of around 12,000 to 15,000 miles per year. If you drive more than the lease's annual mileage limit, you may face an excess mileage charge of about 10 to 15 cents per mile above the allowance.

Are you sure you won't change your mind about the car you choose?
You may sell or trade in a car anytime you wish if you own it. But if you cancel a vehicle lease before the term is up, you may incur steep penalties (depending on the conditions in the lease agreement).

How much of a monthly payment can you afford?
The monthly payments to lease a car may be lower than what you would pay each month if you were to buy it and finance the purchase. The main reason: When you lease, you basically rent the car for a period that is shorter than the entire life of the car.

How do you feel about trading in or selling your car when it's time to get a different one?
Some people like to sell or trade in cars, especially because it may help offset some of the cost of their next vehicle purchase. People who lease do not have to worry about selling their cars or trading them in.

The above article is for general information only and is not intended to provide specific advice or recommendations for any individual. Consult your attorney, accountant, or financial or tax advisor with regard to your individual situation. © Mutual of America Life Insurance Company December 2001. All rights reserved.

Mutual of America Life Insurance Company is a Registered Broker-Dealer.