Leasing vehicles has always been a bit of a controversial way to own a vehicle. Consumer Reports argues that leasing a vehicle is the single most expensive way to operate a vehicle. Other consumers are perfectly happy with the leased vehicles they have. In most cases it does make sense to purchase your vehicle outright rather than go with a leasing option, but there are actually two situations when owning a leased car makes some decent sense.

If you really enjoy having a new vehicle on a regular basis and can afford to pay for it, then leasing a vehicle makes sense. You’ll only really have to worry about gasoline, oil changes and other routine maintenance on your vehicle. In this situation, it makes sense to lease a vehicle for two or three years, but not any longer than that.

The second situation where leasing a vehicle makes some sense is when luxury automobile makers, such as BMW and Lexus, offer subsidized leases where they eat a significant portion of the costs on their vehicle. Luxury automobile makers have a tendency to only want to sell to very wealthy people, so they make extra sales through their subsidized leasing programs.

These are really the only two situations when leasing a vehicle makes sense, otherwise you’re almost always better just to go out and purchase a vehicle outright. Always stay away from leases that extend four or five years. You’ll almost certainly go over the miles and end up paying far more than you should to operate that vehicle.

The good news for the vast majority of us who should not be leasing vehicles is that there will likely be a lot of good deals on the market when two or three year old leased cars are put back for sale on the used car market when the lease contract expires. The automobile leasing industry has increased 25% year-over-year and will likely continue to do so for some time, meaning that a lot of good deals will be coming down the pipeline in the near future.

Purchasing a two or three year old used vehicle is a great way to operate a car because you don’t take the initial hit of a major drop in price on the vehicle. Before you purchase any used vehicle, make sure the price you are paying is inline with what Kelly Blue Book states on their website. In addition, always get your next vehicle purchase inspected by a mechanic and always get your financing set up ahead of time through your local credit union if you cannot afford to pay for your next vehicle with cash.