Anybody buying a new car who for a moment considered leasing has always asked themselves this question. And if you asked somebody to give you an answer it is possible that you've gotten as many answers as people you've popped the question to.

The answer to this question for anybody considering buying a new car is not so simple, cut and tried. Actually it depends on quite a number of factors.

Actually another way of looking at the whole thing is to realize that leases and loans are simply two different ways of financing your use of a new car. Leasing finances your use of a car while a loan finances your buying a new car. Each option has it's own advantages and disadvantages.

When you choose the option of buying a new car, you pay for the entire cost of the car and it does not matter how many miles you end up driving it. Usually you will make a down payment, pay sales taxes in cash or opt to roll them into your loan and pay an interest rate decided by your loan company. You will usually make your first payment a month after you sign your contract.

When instead of buying a new car, you opt to lease it, you will pay for only a portion of the car's total cost. Typically the part you "use up" during the period you will be driving it. What many people like about leasing is the fact that you will have an option of not making a down payment and in most states you will be able to pay sales tax only on your monthly payments. You will also be required to pay a money factor similar to the interest rate in a loan. You will also pay extra fees and possibly a security deposit that you would not need to pay if you were buying the car. Your first payment will need to be made when you sign your contract.

Those who prefer buying a new car to leasing say that at least when the loan is over, you have something to show for it. With leasing you will have nothing to show for your months of payments, unless you want to purchase the vehicle which will mean going into a totally new deal and arrangement.

Those who prefer leasing to buying a new car say that they save money on the monthly payments. They can then invest the extra cash in stocks or some other investment that will leave them with substantially more than a depreciated car whose value is very low if they had opted to purchase the vehicle.

The buying-a-new-car-with-a-loan crowd will counter back that the monthly savings are usually more likely to end up in groceries than in any meaningful investment.

And so the argument rages back and forth. The verdict really depends a lot on an individual, their priorities and temperament.

Visit Chris Kavila's buying a new car blog for other interesting tips and stuff you need to know when buying a new car. Visit now and claim the free gift of a detailed eGuide on how to shop for and buy a new car hassle free.