It's never been a better time to be a car shopper. That's because you have a wide selection of vehicles to choose from, as well as multiple financing options. One of the major decisions you'll have to make before you sign papers is whether you'd like to buy or lease. While there are advantages to both, one might be better suited for you depending on your driving habits and monthly finances. 

Buying

Many car shoppers prefer to buy their vehicle, paying a large down payment and financing the rest. When you buy, you'll likely need to pay about 10-20% percent of the sticker price up front (which is about $3,000 for the average new car). You'll also have higher monthly payments compared to a lease. What's the advantage? You get to keep the car when it's all paid off.

The cons of buying are that you need more money up front and that you need a stable monthly income. You're essentially committing to a long-term investment when you buy, so it's important to have plenty of cash coming in for payments and any necessary repairs.

Leasing

When you lease a car, you'll pay little to nothing down and have more affordable monthly payments. Though lease terms vary from contract to contract, leasing is often preferred by those on a fixed income, such as retirees or recent grads. Because leasing is more affordable, it's also a great option for those that want to upgrade to a luxury or sport model outside their normal price range.

The obvious disadvantage to leasing is that you don't get to keep the car when the lease is up. There may be mileage restrictions as well, and you're often responsible for repairs and maintenance costs.