Lease or buy your next car

Lease or buy? Looking through the dealership advertisements in my local newspaper, it looks like the only option nowadays is to lease. But is leasing best for the consumer?
First, let's consider the facts about leasing:

• Leases only apply to new cars
• New cars depreciate quickly the first 2-3 years (the car is no longer worth its retail value once you drive it off the lot)
  
• Leases include mileage and modification restrictions
• Penalties can be assessed at the end of the lease for wear and tear, excess mileage
• A lease consists of two parts, a depreciation charge and a finance charge (money that you will never see again)

Now, let's run some simple numbers. If you lease a car for the next 3 years, with an average monthly payment of $349. That's $12,564 that you paid over the three years. At the end of the 3 year lease, you have no car. Many people then sign another lease. Do this for 10 cars (30 years), and you have spent a minimum of $125,640 on car rentals, not including penalties and down payments.

What is the alternative? Buy a car you can afford. Most cars today last 10-15 years and over 150,000 miles if properly maintained. Many of these cars with 5+ years left are cheap enough that you could save for a few months and purchase one without a loan. Once you purchase a good, used car, put away some money equal to a car payment every month for your next car. For example, if you save for and buy a $4,000 car, after this initial purchase, save $400 a month. In 10 months, you will have $4,000 saved plus your $4,000 car. Sell your car and you will have $8,000 available for your next car. Continue to save, and 10 months later $12,000 will be available for your next car. Continue down this path, and you will be able to drive nice, paid for cars the rest of your life.