If you lack a car to trade in and don't have the cash for a down payment, a lease may be your only option.
"Most car dealers won't offer 100 percent financing and will require either a trade-in or a down payment of 10 percent or 20 percent," Michalek says. "But be careful on a lease, too, because the advertised low monthly payments usually require a down payment."
D'Arruda says consumers should never tell the dealer their car payment budget. "Negotiate the price of the car first as if you are buying it, then tell them you want to lease it," he says. "You'll get a better deal that way."
Yochim says consumers often make a down payment to reduce their monthly payments, but she says they should never put cash into a car lease arrangement.
"A lease is like long-term renting. You're not building any equity," she says. "At least if you are purchasing the car, you're not throwing away your cash on rent."