Getting a new car is one of the biggest purchasing decisions many people make. But figuring out whether you should buy or lease can be tricky, and your decision can affect your budget and savings for years.

About 80 percent of auto consumers pay cash or finance their new cars with loans, according to Newsday. That means a fifth of consumers forgo ownership entirely to take advantage of the benefits of leasing. If you’re looking to get a new car, it’s important to figure out which financing approach is right for you and your budget.

Buying vs. Leasing: What’s the Difference?

When you buy a vehicle, you’re either paying cash or financing the cost with a loan. Most buyers make an initial down payment and then a monthly payment including interest. Eventually buyers get complete ownership of their vehicles, which are titled in their name. There are no limits on mileage or how long the buyer keeps the car. The owner can choose what to repair and when, and can sell or trade the vehicle for its depreciated resale or trade value to help defray the cost of purchasing the next car.

When you lease a vehicle, you pay only a portion of the vehicle’s cost. Depending on your financing plan, you may have the option of not making a down payment. Typically, you pay for your use of the car every month, plus an interest rate. There are usually limits to how many miles you drive, and you typically have to make agreed-upon repairs under the terms of the lease. At the end of the lease — usually two or three years — you can decide to buy the car or get a new one.

Which Costs More?

Although monthly payments tend to be lower on a leased car than a purchased car, most experts agree that leasing ultimately costs more. When you buy a car, you eventually pay it off — and at that point, you can keep driving it as long as you’d like without monthly financing payments. And you can sell or trade it to raise cash for a new car or other expense.

But if you lease a car, you’ll have to either buy it or lease another once the agreement ends. (And if you end the lease before the full term, you may have to pay a large penalty.) Either way, you usually end up paying more than you would have if you had bought the car and continued to use it for years afterward.

Which Option is Best?

In deciding whether to lease or buy, costs aren’t all you need to think about — consider your personal priorities, too. Leasing may make sense if you want a new car with the latest features every two or three years, want lower monthly payments and plan to keep your mileage low. Buying may be right for you if the higher monthly payments are worth owning your car, in addition to being able to drive unlimited miles, customize your car and keep it for many years.

And before you decide, it’s a good idea to research the differences. This article on looks at the financial differences, and and offer auto-financing calculators that can help you figure out your costs of each payment method over the coming years.

Did you buy or lease your last vehicle? What advice would you share about the difference?