
Once you decide on the right Subaru for you, you need to decide if you want to lease or buy. Each option has its pros and cons, and neither is best for everybody; it really depends on what you're looking for. Here is a quick rundown of each option:
10100 Watson Road
Sunset Hills, MO 63127
LOVE. It's Why We Are Going The Extra Mile For You!
Once you decide on the right Subaru for you, you need to decide if you want to lease or buy. Each option has its pros and cons, and neither is best for everybody; it really depends on what you're looking for. Here is a quick rundown of each option:
Sunset Hills Subaru
10100 Watson Road
Sunset Hills, MO 63127
Quick Glance Lease vs. Buy
 Â    Key Points | Lease or Buy | ||
   Negotiate Price |
| ||
   Mileage Limitations |
| ||
   Down Payment |
| ||
   Purchase Price/Lease Initial Value Taxable* |
| ||
   Monthly Payment Taxable* |
| ||
   High Insurance Coverage Required |
| ||
   Can Modify the Vehicle |
| ||
   Own at End of Term |
|
Lease vs. Buy Example
As an
example, if you LEASE a $20,000 car that will have, say, an estimated
resale value of $13,000 after 24 months, you only pay for the $7,000 difference
(this is called depreciation), plus finances charges, plus possible fees.Â
You return the car at lease-end, or buy it to own it. Â
When you BUY, you pay the entire $20,000, plus finances charges, plus
possible fees. You own the car at the end of your loan, although its
value is less than the $20,000 you initially paid.
Lease
vs. Loan
As with any question of
this type, there can be more than one answer, depending on particulars.Â
Let's simplify the answers and summarize them here:
Short-term: The MONTHLY cost of leasing is ALWAYS SIGNIFICANTLY LESS
than the cost of buying.Â
For the same car, same price, same term, and same down payment, monthly lease payments will always be 30-60% lower than loan payments. This is still true even when compared to 0% or low-interest loans. Typical lease compared to a 6% loan and a 0% loan. Leasing always has lower payments. Does this mean leasing is always better? Not necessarily. Payment is not the only factor that should influence your decision.
 |
Lease - 6% |
Loan - 0% |
Loan - 6% |
Car Price |
$23,000 |
$23,000 |
$23,000 |
Down Payment |
$1,000 |
$1,000 |
$1,000 |
Interest Rate |
6% |
0% |
6% |
Residual |
$11,000 |
n/a |
n/a |
Months |
36 |
36 |
36 |
Payment |
$388.06 |
$611.11 |
$669.28 |
Long-term: The cost of leasing is ALWAYS MORE than the cost of
buying, assuming the buyer keeps his vehicle after loan-end.Â
If a buyer keeps his car after the loan has been paid off and drives it for many more years, the cost is spread over a longer term. It doesn't take rocket science to figure out that the cost of buying one car and driving it for ten years is less expensive than leasing or buying four or five different cars over the same period. Therefore, leasing is always more expensive than long-term buying. If long-term financial cost savings were the most important objective in acquiring a new car, it would always be best to buy the car and drive it for as long as it survives - or until the cost of maintenance and repairs begin to exceed the cost of replacing it. However, many automotive consumers have other more immediate objectives that are more important than long-term cost savings.
Who should lease and who should buy?
It's personal. All
of us have different personal styles, objectives and priorities - in cars,
life, and in finances. Car lease-versus-buy decisions must be made with
your own lifestyle and priorities in mind. What's right for one person
can be totally wrong for another.
You should get a Subaru lease if you:
You should buy your car with a traditional car loan if you:
Information provided by www.kbb.com and www.leaseguide.com