Car payments

The decision whether to buy or lease a vehicle may seem costly whichever route you take, but knowing exactly what you need could save you money in the long run.

“Buy vs. lease is always an individual calculation,” says Bill Potoczak, co-owner of Mills, Potoczak & Co., a full-service public accounting firm.

Many CEOs are in a position to get zero percent financing on borrowed money and easily purchase a car. Others find the idea of a low down payment and slightly higher monthly payments more attractive.

Potoczak suggests leasing if you want:

* A frequent change of vehicle. The purchase of a car is a long-term financial commitment, but brief lease terms allow consumers to upgrade their model at a reasonable cost.

* A small capital investment. Upfront costs in leasing can be smaller than down payments in purchasing, so many who lease acquire a more valuable car.

* A trouble-free vehicle. Most lease agreements require frequent maintenance checks to avoid the possibility of a major mechanical disaster.

Potoczak suggests buying if you want:

* Unlimited mileage. Many lease agreements allow the car to be driven only a a limited number of miles each year, but if you buy the car, it’s yours to use as you want.

* Ownership of property. At the end of a lease, payments are gone, leaving you with nothing tangible, but purchasing a car give you a future opportunity to sell.

* Maintenance freedom. Ownership allows consumers to take cars to the mechanic at their leisure instead of having to follow contractual appointments.

Also consider future losses when making automotive decisions. In 2002, the luxury auto threshold was $17,410, and anything above this cost is subject to depreciation limitation.

To avoid loss of value in buying or leasing, consider an SUV. The luxury car threshold applies only to vehicles with a gross weight of less than 6,000 pounds, and the size of the SUV exempts it from the luxury car rules despite its value.

“A lot of business owners have been buying or leasing Cadillac Escalades,” says Potoczak.

It’s important to figure out what you need in a car before you pay for it.

“Remember to look at all financing opportunities to determine the most inexpensive option” to meet your needs, says Potoczak. How to reach: Mills, Potoczak & Co., (216) 464-7481