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While a new car every three years is an attractive proposition, it may not make much financial sense. Depending on the car you want, your financial situation, and the terms of the lease, it may be a better decision to buy.

On its face, a lease usually means lower monthly payments. This is because a lease takes into consideration the value of the car at the end of the lease, which is always going to be less than the value of a new car. It can also mean a lower payment upfront--no down payment or sales tax.

However, when considering whether to buy or lease, you need to take a deeper look at the numbers. There are a myriad of hidden costs associated with car leases.

Signing a lease may come with preparation fees, while ending a lease may mean fees for wear and tear, excessive mileage, and termination. The warranty may also not cover any problems with the vehicle when in your possession. And to make matters more complicated, even without these fees, you may be actually paying more in the long run when you lease.

There are a few instances when the "buy or lease" question is answered with a definitive lease, according to MSN Money. Only do it if you absolutely need a new car when you can't afford it, or if the lease is subsidized or discounted.

Whether you decide to buy or lease, it's important to really read your contract through and to understand it completely. Take it home and look up terms and information on the internet, or ask friends and family with more experience. Knowledge will allow you to negotiate better terms.

And if a salesman pulls out his hard-sell tactics and tells you the deal won't be available tomorrow? You probably don't want to do business with him anyway.

Related Resources:

• Is it better to lease a car or buy a car? (FindLaw)
• Look Before You Lease (FindLaw)
• Keys to Vehicle Leasing (Federal Reserve Board)