Buying a car can be expensive, and with budgets stretched to the breaking point, many would-be car buyers are looking at leasing as a possible lower-cost option. But is leasing a smart move?

In the following video, Motley Fool investment-planning editor Lauren Kuczala talks with longtime Fool contributor and financial planner Dan Caplinger about the pros and cons of leasing a car versus buying. Dan explains how leases work and goes through the pros and cons of leases, explaining how many automakers offer incentives for customers to get favorable lease terms. In addition, he discusses the recent decision from Tesla (Nasdaq: TSLA) to offer a lease-like financing option that's technically not a lease but which includes some of the same attractive traits. Dan closes by offering guidance on how to decide whether leasing is right for you.


Neither Fool investment planning editor Lauren Kuczala nor Fool contributor Dan Caplinger has any position in any stocks mentioned. You can follow Dan on Twitter: @DanCaplinger. The Motley Fool recommends Ford, General Motors, and Tesla Motors and owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.