Once a driver has settled on a used car, the important question is whether they want to buy or lease the vehicle. While each strategy has its pros and cons, drivers will ultimately have to decide which one is right for them.

MSN Autos examined some of the considerations that drivers will have to think about when it comes down to closing the deal on their used auto. A driver who is informed about the procedure that goes into buying or leasing a car will be able to negotiate better at the dealership.

The news source writes that for many years, leasing was not an economically effective way to own a vehicle. Buyers were often better off and buying a vehicle that they could keep for several years. However, leasing continue to grow in popularity as it allowed drivers to not have to pay a lot of cash up front and change their vehicle every few years.

Now, the news provider believes that the economic changes in the auto industry have made leasing a viable option, both in terms of perks and finances.

An important thing to understand about leasing is residual value. At the end of the lease, the driver has the option to buy the car outright for the residual value. This is calculated not at the time the car is turned in, but at the time the deal is signed, based on the mileage allotment and other factors. By negotiating a desirable residual value, drivers keep their options open.

But because the dealer will more than likely end up with the car at the end of the lease, it is in their best interest to keep the car running. This is why many dealers will offer free maintenance for the life of the lease – a feature that no potential lessee should pass up.

Another big benefit of leasing is that the monthly payments are often much, much smaller. If a buyer doesn’t have the ability to pay cash on a car, they’ll be forced to get financing with interest, not to mention that they’ll be paying sales tax on the full price of the car rather than just the fraction that they would with leasing.

Yet the real reason that leasing has become an attractive option is the unpredictability of the economy. It’s no secret that the auto industry struggled during the economy and while sales are up as of late, many dealers will still do anything to move their cars.

This is where a residual value becomes important. Dealers are making their estimates based on the auto industry today, and they simply don’t know what will come of the future. In two years, the car might be worth quite a bit more than the dealer first predicted. If it’s not, a driver isn’t stuck with the car like he would be if he bought it – he can turn it in or buy it if he wants to keep it. But if it is, he can buy the car for the residual value, then turn around and sell it for a profit if he or she desires.

That’s not to say that buying isn’t a great option – especially if the buyer has the cash to buy it outright. With dealers offering incentives and a number of great used cars hitting the market at reduced rates, it’s a great time to buy – or lease – a vehicle.

Before drivers enter the market for a used car, they often have to sell their own vehicle first. While there are many factors that go into the price of a car there are a few things that sellers can do in order to ensure that their vehicle goes for the price they desire.

MSN Auto recently compiled some tips that explain a few good habits that will help drivers sell their car for a higher price. They talked to Charles Vogelheim, editor of the Kelley Blue Book, for some thoughts on the car selling process.

Although maintaining the vehicle and ensuring that it is in working order is obviously an important consideration, Vogelheim points out that aesthetics play a big role in influencing what the vehicle is eventually valued at.

“The most important thing is to clean the car inside and out,” Vogelheim told the news source. “If the car is older, a good wash and wax on the exterior and vacuum of the interior is probably enough. The extent of the detail will vary depending on the age of the car.”

Vogelheim says that the car doesn’t necessarily need a full detailing. For those who want to save a bit of money, one of the premium options at a full service car wash will usually do the trick.

That takes care of the interior, but for the exterior, Vogelheim recommends paying special attention to dents, chips, scratches and dings. These imperfections can severely affect a driver’s ability to sell a vehicle. This can be a quick fix, and if a car has multiple flaws, many repair shops will do the work at a reduced rate.

Beyond that, buyers should focus on repairing any damage, as this can also prevent a vehicle from being sold. Lights, mirrors and windshields are all highly-visible areas that should be repaired in order to ensure a better price.

“The difficulty with repairing body damage is that the greater the amount of damage, the less return on your investment you will get when you sell the car,” said Vogelheim. However, he cautions that these can often be dealbreakers, especially if the buyer is considering trading their car into a dealer rather than selling to a third party. “You don’t want to give a buyer a reason to not buy your car.”

Finally, drivers should be certain that they have a vehicle’s service records in order. This can go a long way toward assuring a driver that a vehicle is in working order. At the same time, Vogelheim cautions that a driver is not required to provide any type of warranty on their vehicle, and should set the terms of the agreement clearly in the bill of sale.

Your used Toyota may still be running great, but with advances in technology and a wide variety of cars for sale, it may be time to trade in for a different model. While many factors go into the trade-in process, by keeping a few things in mind, buyers can get a great price for their used car and be driving off the lot in a new vehicle in no time.

Edmunds.com recently talked to a dealer, salesman and their own data analyst to get their thoughts on the trade-in process. While each have different opinions on what to look for, their advice could be valuable in working out a great deal at the local used auto lot.

There are a few misconceptions that many drivers have about their vehicle. One that all three agree on is that drivers often overvalue their vehicle by looking at prices online. Often, people are tempted to see the highest quoted price and refuse to budge from that.

Kenneth Mills, a car salesman who has sold used Hondas for eight years, says that every used car is different and that factors into a dealer’s quote. The Edmunds analysts concurs, adding that a number of factors go into trade-in prices that are actually on the dealer’s end – such as the number of similar cars already on the lot, the time of the month and whether the salesman is one or two sales shy of making a bonus.

Bill Weismann, a used car dealer in Orlando, says he normally doesn’t check the Blue Book value, instead opting to search auto auction prices to get a true idea of what a consumer will pay for a vehicle. He also uses a service normally reserved for buyers – Carfax – to check the history of a vehicle. Weismann also cautions that the appearance of a car affects trade-in value tremendously – paint damage on the exterior or the interior of a heavy smoker’s car will fetch a lot less than a car in pristine condition. A custom paint job can also ruin a vehicle’s trade in value.

The three generally agree that a trade-in can heavily benefit a car buyer. Mills points out that in most states, consumers save on sales tax by trading in. If a customer was going to buy a $20,000 car, he’d normally pay a percentage offthat figure for taxes. But by engineering a trade of $12,000, he will only have to pay a tax off the remaining $8,000 – a move that could save hundreds of dollars.