Whether you choose a hybrid or an SUV, that's only the first step. You've got to decide how to pay for it, too. Here's expert advice on closing the deal

Leasing

How it works: Think of leasing as renting a car. You make a monthly payment to drive a brand-new model over a two- to three-year period.

Is it for me?: "There is often no down payment required, or it's very low," says Rik Paul, automotive editor at Consumer Reports. Most lease agreements grant you a limited number of miles, so "the ideal lease customer drives under 15,000 miles a year and keeps her car in good shape," says Paul.

Advantages: With a lease, you'll pay less per month than you would repaying a car loan. The first few years of a vehicle's life rarely require any serious repairs, so maintenance costs will be relatively low. Plus, you won't have to deal with the hassle of eventually selling or trading in the vehicle for a newer model.

Disadvantages: It can be frustrating to pay for something you'll never own. And if you need to terminate a lease before it expires, the fees can be hefty. "Try to anticipate any major lifestyle change that could happen within the time frame of the lease," says Paul. "Moving to a new home or a longer commute to a new job can easily offset the leasing benefits."

Buying

How it works: While you can always pay the full amount of the price that you negotiated with the dealer up front, most young families will need to take out a loan and make monthly payments until the debt is paid off.

Is it for me?: If you're able to put down at least 10 percent of the purchase price and plan to keep your car for more than two or three years, your best bet is to buy. Again, consider your driving habits—clocking more than 12,000 to 15,000 miles per year makes you a better candidate for buying.

Advantages: Without fear of wear-and-tear penalties, you won't have to worry if your tot turns the backseat into a demolition derby. "Buying also gives you the most bang for your buck," says Paul. "Keep your loan repayment schedule short, no more than five years, and once it's paid off, you'll have full equity."

Disadvantages: On the flip side, the older your car gets, the more you can expect to incur repair and maintenance costs. And once the manufacturer's warranty expires, typically after three years or 36,000 miles, you're on your own. Cars depreciate in value over time, lowering the potential resale price when you're ready to upgrade to a newer model.

Fave Family Cars

Consumer Reports recommends that you look for a vehicle with a roomy interior and plenty of cargo space. Take your baby's car seat for the test drive to make sure it fits without a struggle. Here are Consumer Reports's top-rated models for their safety and kid-friendliness:

Best Sedans...
Honda Accord, Toyota Avalon

Fuel-Efficient Wagon...
Subaru Outback

Affordable SUV...
Toyota RAV4

Family Minivan...
Toyota Sienna

Stylish Crossover (part van, part wagon)...
Mazda5

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