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Is leasing a car a losing game?

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David Zalubowski/AP/File

(Read caption) A line of unsold 2013 Darts sits at a Dodge dealership in Littleton, Colo.The decision to buy or lease a vehicle depends largely on personality, not finances.

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To buy or to lease? That is the question Consumer Reports asked in a recent article examining the pros and cons of buying and leasing new cars.

The answer? "In general it makes financial sense for most to buy a vehicle". The magazine says that goes double for slobs and parents -- and probably triple for parents of slovenly rugrats.

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Not surprisingly, leasing website Swapalease.com has come out swinging, criticizing Consumer Reports for its arithmetic. According to the site's Scot Hall, "It appears that Consumer Reports is forcing a highly unlikely mathematicalcar shopping scenario that comes across as anti-leasing. Leasing is nothing more than an alternate form of financing, and one that has become extremely popular again since the recession."

Is Hall right? Yes and no. To understand, let's look at four key areas of buying and leasing:

CASH PAID: If you're buying a car, you'll need to shell out for the whole megillah, including taxes and registration. Either you'll make a downpayment and sign a loan, or you'll pay 100 percent cash. If you take out a loan, the monthly payment will reflect a mix of principal and interest, spread over the life of the loan.

If you're leasing, you'll make a downpayment, and, like renting an apartment, pay a security deposit and the first month's lease payment. The monthly fee will usually be lower than that of a comparable loan, because with a lease, you're just paying for a few years of the car's value, not the entire thing. 

Verdict: From a purely dollars-and-cents perspective, leasing can keep more cash in your wallet. Although, if you think of your car as an investment, you also have to think about...

RETURN ON INVESTMENT: When you a buy a car, it's yours. Like a home or jewelry or a piece of artwork, it's capital. It's an asset that you can convert into cash. (Though how much cash, exactly, will depend on many, many factors.)

When you lease a car, it remains the property of the dealer. When the lease is up, you can sometimes purchase the vehicle -- often at or slightly above market value -- but more frequently, you'll hand over the keys and either lease a new ride or take the bus home. The car may have served you well, but it's not an investment. (Then again, you don't have to worry about selling it, either.)

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Verdict: If you don't care about getting a return on your investment, leasing is fine. To most of us, though, having a car is an expensive proposition, and it would be nice to get some of that money back. In that case, buying wins.

RESTRICTIONS: Owned vehicles have few restrictions. Even if you're still paying on a loan, the vehicle is yours to do with as you please. You can customize it, vacuum it (or not), take it on cross-country road trips -- whatever you like. Those things may affect the car's re-sale value down the line, but there's no legal restriction to stop you from doing them. Also, you can keep the car as long as you want. You can trade it in or sell it at any time.

Leases, on the other hand, come with strings. If you travel a good bit, leases can be restrictive. As Consumer Reports notes, leases tend to have range limits of 12,000 to 15,000 per year, which is about what most Americans drive. If you travel beyond that, you'll end up paying a fee -- though if you anticipate it, you can boost the mileage restriction upfront.

Cleanliness can also be a problem: just as with rental cars, you've got to return a leased vehicle in reasonably good condition, and any customizations will need to be removable. Otherwise, expect to pay up.

Also, the length of the lease isn't adjustable. Even if your life situation changes and you decide that you can't deal with the cost of getting another car, you have to turn in your leased vehicle when the lease is up. Penalties for turning in the car early can be high, too, although (a) you might be able to negotiate kinder terms upfront, and (b) there are a growing number of options for early exiters, like having someone else take over your lease.

Verdict: If you want to be free as a bird, buying's the way to go. 

PSYCHOLOGY: Ownership is something people understand. Yes, loans of any type can be complicated, and few lenders try to simplify the process. But ultimately, the idea of buying a car, of owning it, of it being a capital investment, makes sense. It's what most of our parents and grandparents did, and it's something that we're used to, too.

Leasing, on the other hand, is complicated. (Have you ever tried to work through a lease on a Xerox machine?) It's also fairly new to the auto industry -- if not for fleet owners, at least for individual consumers. Those complexities may not have the same impact on your purchase decision as, say, financial obligations. But if you don't feel comfortable with a lease, you're probably not made for it.

Verdict: As far as ease of mind goes, buying probably wins.

Our take? It's impossible to say which approach -- buying or leasing -- is right for every customer because every customer is different.

If you're the sort of person who wants flexibility with your vehicle, who wants to take care of it as you please, to hold onto it for as long as you like, to drive it for11 years or more, and to reach a point where you're not paying a note every month, buying is probably the way to go. If, on the other hand, you like sparkly new things and are more concerned with driving a late-model vehicle than getting a return on your investment, consider a lease.

Bottom line: the decision whether to buy or to lease isn't about cash, it's about personality. 

Do you strongly prefer buying to leasing? Or vice versa?