To Buy or to Lease: That is the Question!

If you're in the market for a new daily driver, you know that you have a lot of decisions that you have to make. Not only do you have to decide on the make, model, and trim, but you also have to decide how you want to finance your new car. Here at Suburban Subaru we are here to help! We have put together a quick comparison of buying versus leasing to help you determine which financial route to take when you're considering your next new Subaru vehicle. While both options are excellent, we encourage our customers to explore them to decide which is best for your family.

Buying a New Subaru

  • One of the best parts of buying a new Subaru is knowing that, at the end of your payments, you will own your Subaru. This means you can put as many miles as you would like to on it, which is good for folks who like family vacations or long commutes.
  • While new Subaru vehicles are covered by a warranty, it only lasts for so long. With this warranty you can take care of major and minor repairs, maintenance, and more.
  • Monthly payments may be higher because of taxes and fees-but that means ownership later on!
  • With a loan, people often put down a down payment. Other finances also include taxes, lender charges, insurance, a security deposit, and first monthly payment. 

Leasing a New Subaru

  • As opposed to ownership, leasing a new Subaru means that you are essentially renting your vehicle. Monthly payments are lower because of this, and you have the option of turning your vehicle in for a new one at the end of your contract, or buying the vehicle you've grown to love. 
  • When you lease a vehicle, you generally have to keep an eye on your mileage restrictions. Leasing typically allows drivers to travel between 10,000 to 15,000 miles per year.
  • Enjoy a high quality Subaru vehicle with an extensive warranty. Most repairs are typically covered for the duration of your lease while the warranty is in effect. 
  • Leasing allows drivers to enjoy driving a new vehicle more frequently. You can take on the newest trends with each trade in. We also offer a rewards program for qualified customers returning a leased vehicle with plans to lease a new model.

How Loans and Leases Differ

Here are some of the major differences between buying and leasing a car:

OwnershipYou own the vehicle and get to keep it as long as you want it.You don't own the vehicle. You get to use it but must return it at the end of the lease unless you decide to buy it out!
Up-Front CostsThey include the cash price or a down payment, taxes, registration, and other fees.They can include the first month's payment, a refundable security deposit, an acquisition fee, a down payment, taxes, registration, and other fees.
Monthly PaymentsLoan payments are usually higher than lease payments because you're paying off the entire purchase price of the vehicle, plus interest and other finance charges, taxes, and fees.Lease payments are almost always lower than loan payments because you're paying only for the vehicle's depreciation during the lease term, plus interest charges (called rent charges), taxes, and fees.
Early TerminationYou can sell or trade in your vehicle at any time. If necessary, money from the sale can be used to pay off any loan balance.If you end the lease early, you're still responsible for all the remaining payments. 
Vehicle ReturnYou'll have to deal with selling or trading in your car when you decide you want a different one.If you return the vehicle at lease-end, you pay any end-of-lease costs, and just walk away.
Future ValueThe vehicle will depreciate, but its cash value is yours to use as you like.On the plus side, its future value doesn't affect you financially. On the negative side, you don't have any equity in the vehicle if you turn the vehicle in. 
MileageYou're free to drive as many miles as you want. But keep in mind that higher mileage lowers the vehicle's trade-in or resale value.Most leases limit the number of miles you may drive, often 10,000 to 15,000 per year. (You can negotiate a higher mileage limit.) You'll have to pay charges for exceeding your limits.
Excessive Wear and TearYou don't have to worry about wear and tear, but it could lower the vehicle's trade-in or resale value.Most leases hold you responsible. You'll have to pay extra charges for exceeding what is considered normal wear and tear.
End of TermAt the end of the loan term, you have no further payments and you have built equity to help pay for your next vehicle.At the end of the lease (usually two to three years), you can finance the purchase of the car, or lease or buy another.
CustomizingThe vehicle is yours to modify or customize as you like, although doing so may void your warranty.Because you must return the vehicle in salable condition, any modifications or custom parts you add have to be removed. If there is any residual damage, you'll have to pay to have it fixed or you'll need to file an insurance claim and pay a deductible.

We at Suburban Subaru believe each customer is different. That's why we take the time to discuss your options so we can tailor your financial plan to your unique needs. We encourage you to visit our Finance Center to learn more about what we can do for you. If you have any questions please give us a call, contact us online, or visit us in person to learn more. See you soon!

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Suburban Subaru

14 Hartford Tpke
Directions Vernon, CT 06066

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