Jay Leno and Suze Orman agree: Don't lease a car—buy

If you can't afford to buy a car outright, why not lease one? As the price of new vehicles continues to rise, it's becoming an increasingly popular option.

However, Jay Leno, car aficionado host of CNBC's "Jay Leno's Garage," advises against it. And so does financial expert and former CNBC host Suze Orman.

"I always think it's better to buy a car," Leno tells CNBC. "Everyone seems to lease now. Everyone thinks you can write off this and write off that, and to a certain extent, you can. But at the end of the lease, you don't have anything."

The comedian and former host of NBC's "The Tonight Show" prefers ownership when it comes to most things. "I don't carry debt. I own everything. I own my buildings. I own my cars. That way, if it ends tomorrow, I know what I've got," he says.

Orman calls leasing a car "the most stupid thing I've ever done with money."

Back in 1987, she leased a BMW 750iL in order to show off to the person she was dating. "There was a time that I was in a relationship with a very, very wealthy person and I wanted to impress this person and I didn't have money yet, so I went out and I leased a car," she tells CNBC.

But Orman wasn't spending the money for the right reasons, and the $800 monthly payments ended up being more than she could afford.

"That's where I came up with this statement, you know: Don't spend money you don't have to impress people you don't even like, because the truth of the matter is later I didn't even like this person and I'm spending all of this money," she says.

While lease payments are typically cheaper than loan payments per month, they still add up over time. Once you pay off your auto loan, you eliminate a fixed monthly cost and won't have to worry about a car payment until you buy again. If you're still leasing, that's another check you continue to write every month.

Like going out to eat, small individual payments can add up to huge annual costs.

If you're debating which option is best for you, take the time to deliberate and weigh the pros and cons. And before signing up for an expensive lease, consider Orman's advice and ask yourself, "When do you buy what you can afford versus what you need, when what you need is less than what you can afford?"

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