You're thinking of getting a new car but you're not sure whether you should lease or buy? You're not alone. Thousands of car buyers ask themselves this very question each and every day. The key to deciding whether you want to lease or buy your next car is in understanding exactly what a lease is and how it differs from an outright purchase.

The first thing to understand is when you're leasing a car, you're not buying it. It's more like renting the car from the leasing company with the option to purchase it at the end of the lease.

Why should you lease a car instead of just buying one then? Many people lease cars because it is the only way they can afford the car they want to drive. For example, purchasing a brand new sports car outright will cost you a higher monthly payment than leasing that same exact car would, and sometimes the difference in payment can be hundreds of dollars each and every month.

If you like the idea of leasing a car for less than what you can buy one for, it's important to remember that leasing can be a bit tricky and getting a good deal on the car you want is even trickier when leases come into play.

When you purchase a car you walk into the dealership and negotiate price. Technically, this is also what you're supposed to do when you negotiate a lease but many dealers want to charge full price for a leased vehicle because it's a lease and not a purchase. Don't fall for this game if you do decide to lease your vehicle. The first thing you should negotiate with the dealer is the price of the leased vehicle as this will affect your monthly lease payment.

Now, while it's true you can get the car of your dreams for a lot less money each month if you decide to lease it, you have to remember that it's not your car at this point – it belongs to the leasing company. That means you'd better take good care of the car and only drive it the number of agreed upon kilometers each year or you're going to end up owing the leasing company some cold-hard cash at the end of your leasing agreement.

While leasing may be right for some people, if you don't think you can stick to the restrictions imposed by a lease or you don't like the idea of making a monthly payment for something you don't really own, your best bet is to go to a car loan broker and find out how much car you can afford to purchase outright rather than lease.