In the late 1990s, more than one-third of American drivers were leasing their vehicles, a trend that faded in the early 2000s when automakers began offering zero-percent and low-rate financing. Today, approximately 20 percent of all motorists choose to lease. For most consumers, leasing a new vehicle every two or three years is a more expensive option than buying a car and keeping it after the final payment. But many drivers, particularly owners of luxury cars, are quite content to lease, even if it doesn't necessarily save money.

Click here to see Consumer Guide's Vehicle Class Buying Guides.

Leasing has two principal benefits:

• You drive a newer vehicle that is always under warranty and seldom needs more than routine maintenance, such as oil changes.
• For about the same money, you can often get a larger, more luxurious, better-equipped car by leasing than you could through a straight purchase.

Having a better understanding of this alternative to buying should make it easier to decide whether leasing makes sense for you.