Most financial planners will tell you that over the long run, leasing costs more than buying. But Goldstein’s doesn’t pay full price. He uses leasebusters.com—a website that connects people who need to break a lease with people who want a new car. Goldstein says that by doing so, he can get some serious deals. For instance, the first owner of his Mercedes put $17,000 down, which reduced his monthly lease payments to $695—about $500 lower than they would be if he drove the car off the lot.

But is taking over someone else’s lease always the best way to go? And is it cheaper than buying used? We talked to George Iny, director of the Automobile Protection Association, to find out.

Iny told us that assuming leases can indeed save you big money over leasing direct from the dealer. To get the best bang for your buck, he says you should make sure that the original lessee made a substantial down payment of at least $3,000. You should also look for distressed sellers who offer cash incentives to take the car off their hands. Having the seller cover two to four months of payments is typical agreement if he needs to get out of his lease fast.
The other advantage of taking over a lease is that up-front costs, such as the GST and PST, have already been covered by the original lessee.

But even so, there are some cases where it may actually be cheaper to lease directly from the dealer, Iny cautions. Toyota, for example, now offers cheaper lease rates than it did four
years ago. So a new lease from them could have lower monthly payments than an assumed one.

And when you compare lease busting to buying used,Iny says leases usually lose over the long run. “A vehicle loses its largest percentage of value in first three years,” he says. Sometimes, the price can even drop by half. Most assumed leases can’t compete, especially if you plan on driving the car for at least five years.

The only instance where assumed leases might come out ahead is when you must have a new car on a regular basis. That’s the case with Goldstein: He loves driving a different car every couple of years, so his love affair with leasing will continue, he says—whether it makes financial sense or not.

At one time, that meant it was time to move, but that’s not the only option. More and more homeowners are opting to build additions instead. Some are even razing their homes and rebuilding from scratch. All three options for upgrading have their pros and cons, but which one makes the most financial sense? MoneySense decided to crunch the numbers to find out.

Buying a new home
Let’s say you want to move from a 1,200-sq-ft starter home in Toronto to a place that’s double the size. You’ll likely be able to sell your existing place for roughly $450,000, and buying a larger house of the same vintage in a similar neighbourhood would cost about $700,000, says Marni Lokash, a Toronto-based real estate agent. So at first glance, it looks like your upgrade cost is roughly $250,000.

Unfortunately, when you move there are other costs too. Generally, the seller has to cough up 5% of the purchase price to the realtors, so you’ll pay $22,500 for that. When buying your new place, you’ll also have to pay between $10,000 and $23,000 in land transfer fees, depending on what city you live in. Legal fees, staging your home and home inspections will typically add another $4,500. Take all those costs together, and the price of your upgrade can climb to $300,000.

Of course, if you live in a city where real estate prices are more reasonable, it makes a big difference. For instance in Winnipeg, the total amount you’ll spend on upgrading from a 1,200-sq-ft home to a 2,400-sq-ft home will be more like $200,000.

Total cost: $200,000 to $300,000

Building from scratch
Leveling your existing home and building a bigger house from the ground up has its advantages. You can create a home that’s customized to your family and you don’t have to move neighbourhoods. On the other hand, relying on builders to get the place done on time and finding somewhere to live while your new house is being built can be a massive headache.

But what about the cost? Mike Cochren, owner of Oakville, Ont.-based Cochren Homes, says most contractors can build a large home with good quality amenities for about $300 per sq ft, while a more modest home can be built for $225 per sq ft. In our scenario of demolishing a 1,200-sq-ft home and building a new 2,400-sq-ft home, he estimates the total cost to upgrade will be about $790,000. That includes architectural fees, surveying, hydro, landscaping, labour and materials.

Extras like adding a second floor, upgrading to fine finishings or installing state-of-the-art wiring can push that number much higher though. Jeremy Jacobs, a Toronto-based investment property manager, tore down his 1,200-sq-ft home and is in the midst of erecting a 3,500-sq-ft replacement. He’s going for high-end finishings and he says his new place will cost $1 million at least.

Total cost: $790,000+

Building an addition
If you like your location and your existing house, hiring builders to put on an addition is another option. You’ll still have the same hassles of dealing with contractors and potentially finding alternative living arrangements—but it’s much less expensive. For starters, says Cochren, architectural fees will be lower and demolition fees will be cut in half. Plus, you don’t have to build a driveway, and landscaping costs could be reduced. He estimates he could do an addition that increases your square footage from 1,200 to 2,400 for about $400,000.

Total cost: $400,000

The bottom line
The most expensive option by far is knocking down your house and building a new one, according to our scenario. Building an addition is a better deal, but is also pricey. In most cases, packing your bags and moving is less hassle and will save you a big pile of cash.

That’s not to say that you should never renovate. If you absolutely love your location and you live downtown in a big city, the cost difference will likely be less than $100,000, so it might make sense to stay put.