Riverside, California is located about 60 miles to the East of Los Angeles. Although many people think of it as being a suburb of Los Angeles, the town is actually a metropolis in its own right, with a population of over 300,000. Nestled among mountains and some of the first successfully cultivated citrus orchards in California, Riverside is sunny nearly all year round. And its location amid the bustle of urban Greater Los Angeles and proximity to some of the most pristine national parkland in the U.S. make it one of the premier locations for taking automotive excursions. Riverside is a great town in which to own a new car.

However, if you want to own a car there, you must be prepared to fork over some serious money. That’s because California is one of the most expensive places in the United States to both buy and own a new car. The state taxes and fees alone are enough to make the jaw drop. A typical $25,000 car may incur costs as high as $2,500, in nothing more than state fees and taxes. Registration costs often run 3 times as high as neighboring states. And California’s strict environmental regulations mean that anyone who drives an older or higher mileage car is running the serious risk that their car will not pass inspection. This is a devastating event, when it occurs, essentially signaling the complete loss of the car’s value. All told, California is an incredibly expensive place to be a driver.

Leasing can hugely reduce the costs of owning and operating a car in California

Leasing your new car has a number of very significant benefits, no matter where you’re located in the U.S. But in California, those benefits can be truly enormous. The first benefit of leasing a car is that almost all lease vehicles are either zero-mile cars or very nearly brand-new. This means that passing your yearly inspection is practically given. But even if something did go awry with your car, almost all lease terms stipulate that the leasing company or dealership will cover the costs of broken, damaged or prematurely worn parts. This is effectively the same as a warranty for a car purchase. And it removes a ton of the risk of ownership from the lessee.

But an even bigger reason that leasing is the right move in California is the huge savings in taxes and fees that leasing allows. Being immediately hit with a required $2,500 payment is not the idea most people have of enjoying their new car. While monthly lease payments are taxed, the amounts you’ll pay each month in tax are almost imperceptible when compared with the gigantic, lump-sum payment to the state that is required when purchasing a new car.

Another huge source of savings comes from not having to make a down payment. With a lease, the drive-off costs are often minuscule, usually not amounting to more than a couple hundred dollars. There will typically be a small security deposit, which you’ll get back upon completion of the lease. It is also usually required that the lessee pays the first months payment in advance. For the price of a couple meals out, you get to drive off the lot in a brand new car.

Buying on a bank loan is a completely different story. The down payment on a car loan can run into the thousands or even tens of thousands of dollars. Unless your credit is absolutely perfect, you will be forced to make a huge, up-front cash payment on the new car you’re buying. There will also be the fees described above, as well as closing fees from the bank or finance company. Even on a $20,000 car, this can amount to thousands of dollars that you either don’t have or won’t have.

These required payments often mean that many Californians simply cannot afford a new car, forcing them to go to the used market. The much reduced price of used cars can be very tempting. But for those who rely on their vehicles for their livelihood, buying a high-mileage used car can be a serious mistake. After 100,000 miles, the frequency of mechanical breakdowns on used cars goes up exponentially. Past 150,000 miles, most cars are quite literally ticking time bombs, with each clunk and clang a stark reminder that someday soon the transmission or engine may explode.

Leasing, on the other hand, gets you into a brand new car, with all the confidence and reliability that brings. On top of all this, a typical lease can save hundreds of dollars per month on payments, with payments often being less than half what they would have been, had the car been purchased on a loan.

For these reasons, leasing your next new car may be the best move you ever make.

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