Lease or Buy?–How to Choose an Affordable Car (and Fix an Upside-Down Loan)
Money Girl
Macmillan Holdings, LLC
4.6 • 1.8K Ratings
🗓️ 10 April 2026
⏱️ 15 minutes
🧾️ Download transcript
Summary
1010. Are you feeling "car poor" or trapped in an auto loan that costs more than your vehicle is worth? In this Finance Friday episode, Laura answers a listener's question about how to navigate an unaffordable car loan when you’re upside-down (negative equity).
If you are looking to lower your monthly payments or are debating between a car lease vs. buying your next vehicle, you’ll learn the pros, cons, and math behind making the most affordable choice for your budget.
We talk about:
- How to manage an upside-down car loan: Strategies for refinancing or negotiating with lenders when you owe more than the car's market value.
- Auto Refinancing 101: When to switch your loan to a credit union or online lender to reduce interest rates and monthly payments.
- The 20% Rule: Why a significant down payment is the best defense against rapid vehicle depreciation.
- Leasing vs. Buying: A breakdown of the long-term costs, maintenance responsibilities, and flexibility of each option.
- Hidden Costs of Ownership: How to account for repairs, mileage restrictions, and residual value before you sign a contract.
Upcoming Wedding Series This May: We want your questions about wedding finances! Whether you're the bride, groom, or a guest, send us your questions about budgeting for the big day. Email: money@quickanddirtytips.com or leave a voicemail: (302) 364-0308.
Money Girl is a Quick and Dirty Tips Podcast, hosted by Laura Adams.
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Transcript
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| 0:00.0 | Diana says, I have a car loan that I really can't afford. I also owe thousands more for the car than it's worth, |
| 0:13.9 | so I can't trade it in for something less expensive. How can I find a reliable and affordable vehicle? |
| 0:21.2 | Thanks so much for your question, Diana. |
| 0:23.7 | I know being upside down on a car loan is stressful, but you're certainly not alone. |
| 0:29.3 | Whether it's due to high vehicle prices, rising auto loan interest rates, quick vehicle depreciation, |
| 0:35.6 | or just a change in your income and budget. Many people are feeling |
| 0:39.6 | the financial burden of having a car. Today, I'll answer Diana's question by reviewing some ways |
| 0:45.2 | to manage a car you can't afford. Then I'll review the differences between leasing and buying a car |
| 0:50.4 | and give you some tips for finding a vehicle that fits your budget and lifestyle. |
| 0:55.5 | Hey, everyone, and welcome back to episode 110 of Money Girl. This is Finance Friday, where I |
| 1:01.3 | answer your burning money questions. I'm Laura Adams, an award-winning author, spokesperson, |
| 1:07.6 | money speaker, and founder of The Money Stack. That's my substack newsletter. You can sign up for |
| 1:13.7 | the Money Stack and learn more at laura d.adams.com. And I'd also love to hear from you. You can leave me |
| 1:20.0 | a voicemail with a question or comment by calling 302-364-0308. I'd love to feature your question on Finance Friday, and we have an upcoming |
| 1:32.9 | series in May devoted to weddings. Maybe you have a question about getting married. You want to know |
| 1:40.1 | about being a wedding guest or paying for a wedding or maybe being a bridesmaid or groomspent. |
| 1:45.2 | All questions are fair game. Record a voicemail or send me your email using my contact page |
| 1:51.2 | at laura d adams.com. If you're like Diana and are upside down on a vehicle, you owe more |
| 1:59.7 | for it than it's worth. And that means if Diana were to |
| 2:02.9 | sell her car or trade it in for another vehicle, as she mentioned, she'd have to pay the difference. |
| 2:08.8 | And when you're upside down on a car loan or maybe you just need to reduce the monthly payments, |
| 2:14.7 | one option is to refinance it. If Diana could get a new loan with a lower |
... |
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