Leasing vs Buying

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:

Car Leasing Benefits:

• Leasing has you pay for the vehicle's projected value depreciation over the course of the lease, rather than the full value. This means a lower down payment, and lower monthly payments.
• The lease period is almost always covered by the vehicle's warranty
• Leasing has yearly mile limits, and you have to pay for each mile you go over. If you plan on going on a trip across the country, leasing might not be a good choice. If you plan to mostly just drive around town, leasing can be a good call
• Leasing lets you enjoy vehicles that might normally be out of your price range
• Once your lease is up, you can lease another new vehicle. Leasing lets you always drive the newest, most up-to-date models

Car Buying Benefits:

• Buying has you pay the for the full value of the vehicle. Once it's paid off, the vehicle is yours
• If you buy a vehicle, you can drive it as much as you want; no yearly mile limits here
• After you pay off the car, you can modify it as you see fit
• Financing a vehicle can help you build equity
• You can use the car as a trade-in for your next vehicle
• Less expensive in the long run

Quick Glance Lease vs. Buy

Key Points	Lease or Buy
Negotiate Price	Yes	Yes
Mileage Limitations	Yes	No
Down Payment	Yes	Yes
Purchase Price/Lease Initial Value Taxable*	No	Yes
Monthly Payment Taxable*	Yes	No
High Insurance Coverage Required	Yes	No
Can Modify the Vehicle	No	Yes
Own at End of Term	No	Yes

Lease vs. Buy Example

Lease vs. Loan

As with any question of this type, there can be more than one answer, depending on particulars. 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.

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.

Header	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.

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:

• Want a lower monthly payment
• Enjoy driving a new car every two or three years
• Want the latest safety features and is always under warranty
• Don't like trading and selling used cars
• Don't care about building ownership
• Have a stable, predictable lifestyle
• Drive an average number of miles
• Properly maintain your cars
• Are willing to pay more over the long haul to get these benefits

You should buy your car with a traditional car loan if you:

• Can afford the higher monthly payment initially
• Want to keep your car for more than two or three years
• Want to build up trade-in resale value (equity)
• Want to own your car
• Want to pay out the loan and not have payments at some point
• Drive more than average miles
• Want to drive your car for many years to spread out the cost
• Want to customize your vehicle

Summary

To summarize, car leasing is the right answer for people who want to save on monthly automobile costs but who have a stable predictable lifestyle and take good care of their cars. Buying is better for those who drive lots of miles, like paying off their car loans and enjoying their car without monthly payments for years to come.

Remember, whether you lease of buy, or take over an existing loan, your current credit score can make the difference between a good deal or a bad deal, or no deal at all. Browse all the new Subaru cars for sale in St. Louis at our nearby dealership, or look for a special incentive or Subaru lease offer today!