PHILADELPHIA (WPVI) -- When it's time for a new car, the choice between buying or leasing can be a tough call - especially with persistent supply chain issues and rising interest rates.
With the average price paid for a new car at nearly $50,000 and with higher interest rates above 6%, you're likely looking at bigger monthly payments no matter which you choose. But there are options to help you get the best deal.
Oscar Pagan says buying is a no brainer.
"The option to own is always better, in my opinion, than to lease because at least you have an asset and if anything ever happens, you can sell that asset," he said.
But on the surface, leasing can be more appealing.
"First, it's always under warranty. Second, you're always driving a car with the latest safety features. And third, if you're working part time in the office and part time at home, you're not driving as much, so that means you probably won't exceed the lease's limits on how many miles you can drive," said Jon Linkov from Consumer Reports.
Monthly payments are usually lower with a lease because you're not paying for the full value of the car, so you may be able to drive a more expensive vehicle than you'd be able to buy. But there is one major con.
"A major downside of leasing is that you have an endless cycle of paying for a car. You're never without a car payment because as soon as the one lease is up, you have to either buy a car or get into another lease," said Linkov.
It's hard to make a fair head-to-head comparison, but in general, Consumer Reports says two back-to- back three-year leases will always cost more compared with buying and owning a car over that same period, since a buyer will ultimately own that vehicle asset when that period ends.
If you do choose to buy your next car, there are a few easy ways to save money.
First, don't rely on the dealer for the best loan rate. Instead, check if your bank or local credit unions offers a lower rate. And if your heart isn't set on a specific make and model, shop around for financing incentives that might be offered by manufacturers.
And don't forget - even if you choose to lease, you should still negotiate the price of the car and the terms of the deal.