Clark frequently fields one question from the public when he's on the road during his book tours: "When is it right for me to lease a vehicle?" With the leasing market up about 25 percent year over year, it's a great time to address this question again. There are two circumstances when doing a lease is acceptable: The first is if you like new wheels all the time and you only want to worry about gas, oil changes and routine maintenance on your vehicle. Then it's OK to lease a new car every two or three years, but no longer than that. The second instance is when luxury automakers offer factory-subsidized leases where they eat a lot of the cost. Luxury automakers hate to cheapen their brands with a bona fide sale, so often they offer such leases to help move extra product. But other than in these two circumstances, don't lease. And stay away from four or five year leases unless you want to face financial Armageddon, Clark says.

Meanwhile, the strong growth in leases means that in a few years there will be great deals on two and three year old cars when they enter the used auto market. Clark is a big fan of used cars, but be aware that you must always have them inspected by an independent mechanic before you buy. Finally, beware of one cousin of the long-term lease -- the balloon loan. This is the kind that starts with an extra cheap monthly payment, but at the end of five or six years you may owe the lender up to $10,000 or even $15,000. And by then, your vehicle's worth won't be able to keep up with that inflated balloon rate.

Clark made a prediction in January that ended up wrong. He said gas prices would be a lot lower by this summer. He says he really blew it on that one. However, he made another prediction several years ago that may just be turning out to be true. He predicted there would be increasing demand in the US for shared cars services. Two companies who are doing this are Zipcar and Flexcar. These are services where you can rent a car by the hour just to do your errands, and just return it to where it was parked when you're done. Gas and insurance are usually included. It's kind of like "public transit, private driving," and it's much cheaper than adding another car to the family fleet! It's expanding like wild fire to many American cities, and even to some suburban markets. Since cars are such a huge part of our daily budget, it can save you a lot of money. It's like owning 1 and 1/4 cars, instead of 2 cars, or a time share for a car. But everyone knows that's not a term Clark likes to use -- so he prefers to call it "shared ownership!"

An oldie and mostly baddie is back -- car leasing! Clark thought the practice had gone the way of the dinosaur since manufacturers, dealers and consumers all got burned by it. The question now is, "When does it make sense to lease a vehicle?" There are really two such situations. The first is when you're talking about luxury automobiles. Luxury brands don't want to give discounts and cheapen their image, so they do it in a hidden way by subsidizing the lease. BMW is a great example of this -- almost two-thirds of their vehicles are now leased. Jaguar and Audi are other luxury brands that are very into leasing. The other situation where leasing is OK is if you like new wheels all the time and you don't mind that depreciation is demolishing your wallet. Then leasing a new car every 24-36 months is understandable.

But be honest with yourself. Make sure your lease doesn't come with an exceedingly low mileage allowance and beware of excessive wear-and-tear assessments in the future. The average leased vehicle gets hit with wear-and-tear charges to the tune of just under $2,000. When you get a leased vehicle, you should take extensive photographs of the interior and exterior so there's no question when you return it in top shape. And if you do spill something in the car or tear the upholstery, fix it before returning the car. It will be one-fifth cheaper for you to pay to have it repaired. Finally, before you return the leased vehicle, make sure you've gotten a third party to do a thorough inspection of the car. This alone could save you up to $1,500 in unnecessary turn-in fees.

Luxury automakers are hurting a bit right now because sales have declined. At the same time, they have to promote the new lines that are just coming onto the market. And, luxury carmakers can’t really offer deals on their cars or they lose the cache. So, what are they doing? They are offering factory subsidized leases. Mercedes is now offering an average incentive of $6,500, for example. BMW has boosted its incentives by a third, taking the average to about $4,500. Infiniti is up more than 20 percent and Lexus is up 16 percent. So, you have a great opportunity right now. Just remember that deals are often hidden from view. A good way to find the deals is to check out Edmunds.com and look up “special lease financing offers.” Just make sure that the offer comes from the manufacturer’s leasing arm, not from a bank. You’ll see the logo of the manufacturer. The best deals are on the “near luxury” models, which include the lower priced Mercedes, Acuras and Infinitis. Leasing one of these vehicles may be very enticing for you. But Clark would rather wait until they come back into the market in two or three years when the lease is up. That’s when the real, deep discount deals happen. For example, the cars that these companies are leasing today will be ultra cheap in 2009, when they come back on the lot and dealerships need to sell them. Today, the deals are on luxury cars from 2004 and 2005. So, look for deals on luxury vehicles from those years.

Clark never thought he'd be telling you this, but there are a couple very rare circumstances when it is okay to lease a car. Click here to get the scoop!

Clark hasn’t talked about leasing a car in a while, mostly because he doesn’t normally recommend it. But he has an offer he wants you to know about just this once. If you like new wheels every 24 months or the manufacturer is offering special subsidized financing, it’s ok to lease. And that subsidized lease from the manufacturer should last no longer than three years. You should not lease because you think you’ll get more car for less money. That’s just plain hooey. Also, if you’re in a lease now, you can refinance it if you have good credit. How does it work? Well, there is no requirement under law that you’ll be told the actual interest rate on your lease. You’re basically borrowing the car, so the terms are always skewed. If you refinance your lease, you will be paying less and can get out of the lease earlier! Get help doing this at lowermylease.com. Just remember that you never want to extend the length of the lease, regardless of whether you get a lower rate.

The percentage of people leasing cars was falling, but it is now back up to more than 20%. As leases increase, so do sales pitches for leasing. Clark believes leasing can be major trouble. Do not be a payment buyer, which means you only think about what it will cost per month. Think about the whole picture.

Positives of leasing:
-if you want a new car forever, and you can cycle in and out of a car every 24 months, leasing may work for you
-if there is a special deal on a lease from a manufacturer to help sell the car, a lease may work

Negatives of leasing:
-you don’t know your future and you don’t know where you will be in five years (children, new job, new home, etc.)
-the turn in of a leased vehicle can be ugly and brutal with lots of penalties for unusual wear and tear. You must make sure you photograph the car thoroughly before you turn it in. And make sure you are present for your car inspection and get a copy of the report.
As the leasing market increases, the used car market gets better and better. A used car customer, who buys a car that was originally leased, does not take the car’s depreciation hit because the original leaser has already paid.

The percentage of people leasing cars is dropping like a rock, according to the Detroit News. Apparently, consumers who’ve been burned once or twice are swearing off car leases. Plus, the automakers were burned as well. The leasing thing ate up everyone except those people who came along and bought the used cars after the lease was up. Four years ago, one out of three cars were being leased. Today, it’s one in 11. Leases account for just five percent of sales for domestic automakers. For the Japanese, it’s nine percent. But European automakers are still leasing vehicles in big numbers. More than one-third of all European brands are still being leased. So, what you need to know is that this year and next year there will still be good deals on cars that are two, three and four years old. The leases made years ago are flooding the market and creating an opportunity as a used car buyer. Looking several years down the road, however, the deals will not be so good. People are leasing cars right now for the longest time periods in history. Many are upside down in their vehicles, so they’re going to have to stick with them for many years. It will starve the used car market starting in about 2006 and 2007. European brands will still be available, though. You’ll continue to find good deals on those cars. But this is great news that people are not leasing as much. Leasing a car is the worst financial circumstance you can be in. It’s a commitment without a way out. And you can be destroyed financially by getting a lease. And if you terminate early, the penalty may exceed what the remaining monthly payments are. So, if it seems appealing, think twice. You can buy a nice luxury car that is two or three years old, and the payment will be about the same as a new car lease payment would be. Then, you can own the thing at the end of the loan.