Lease or Buy?

What Exactly is an Automobile Lease?

Think of leasing like you are borrowing a car - but you only have to pay for the part you use. Basically, you are financing the use of the car and not the car itself.

Let's Start with a Summary

When you lease a Subaru...

When you Purchase a Subaru...

- Generally LESS up front money

- Generally MORE up front money

- LOWER monthly payment

- Higher monthly payment

- No trade-in negotiation 

- Negotiated trade-in value

- Responsible for maintenance costs after warranty expires

- Less maintenance cost (always under warranty)

- GAP protection NOT included - added expense to purchase

- GAP protection included

- Safety & technology does not change

- Update safety & technology every three years

- No loyalty incentives

- Receive Subaru Lease Loyalty Incentives

- Potential negative equity when you sell if value is less than payoff

- No chance of negative equity

- Sales tax due on total price of vehicle and due at time of purchase

- Sales tax applied to monthly payment and spread out over term of lease

 

 
Price of new car is the same for both
Insurance cost the same for leased or purchased vehicle.

 
About Subaru Leases
  • A typical Subaru lease is 36,39 or 42 months at 10,000, 12,000 or 15,000 miles per year. You may pre-buy additional mileage at .10 per mile at the time of your lease. Excessive mileage is currently charged at .15 per mile at the end of the lease
  • There is NO security deposit required.
  • A $300 disposition fee is waived if you purchase or lease another Subaru.
  • Subaru offers lessors a loyalty bonus equal to the first month of your next lease free (up to $500).
  • Subaru is very generous with $1,000 "wear and tear" allowance when you turn your car in. This covers typical scratches, dings, and minor deferred maintenance items.

Less Sales Tax and No Upside Down

  • When you purchase a vehicle, you have to pay the entire sales tax amount UP FRONT when you register it. When you lease, the sales tax rate is added to each monthly payment.
  • According to BankRate.com, 40% of consumers are upside down on the vehicle they are financing. This means that their car is worth less than what they owe. This is not possible when you lease a Subaru because at the end of the lease, you owe nothing and you don't carry forward any negative equity into your next lease or purchase.

 
What are my options at the end of my Subaru lease?
You have three choices at the end of your lease.
 
1. Simply hand the keys over when you turn the car in. You can either re-lease (owner loyalty), purchase or simply walk away. Disposition and excessive wear and tear fees may apply.

2. Buy it. You've driven the car for 3+ years and no one knows it better than you. What a great way to get a quality "used" car at a pre-determined price. Ganley Subaru East will help you with the paperwork and/or financing on the balance of the car at very competitive rates and even help you extend the bumper-to-bumper warranty.

3. Trade it. This is really cool! IF the actual cash value of your leased Subaru is higher than the estimated residual value, you could trade the car in to Ganley Subaru East and use the equity toward your next lease or purchase. It's almost like free money you weren't expecting! Because Ganley Subaru East offers top trade value on leased or pre-owned vehicles, this option is favored by most Subaru owners from the Wickliffe, Willoughby, Mentor, and Chagrin Falls area.

 
Questions and Answers About Leasing

What is GAP insurance?


GAP insurance stands for Guaranteed Auto Protection and covers any difference between the current market value of the car (insurance settlement) vs your outstanding loan or lease payments in the event of total loss, theft or destruction of the vehicle. All Subaru leases INCLUDE GAP insurance. If you purchase a car, you have to buy GAP Insurance separately.

What is Cash Cap Reduction?


When you put money down on a purchased vehicle, you lower the payments because you are financing less money. That makes sense.

When you put money down on a leased vehicle (called Cash Cap Reduction), you buy down the payments only - on a car you don't own. In the event you total your car toward the beginning of the loan, GAP insurance will cover the value of your car but you will loose your money down.

IMPORTANT: Ganley Subaru East recommends that you put the LEAST amount of money down on a leased vehicle as possible. Instead of buying down a payment, use the money to actually make the payments - at no risk to you in the event the vehicle gets totaled. This is why most of our Lease Specials are $0 down leases.

 
Can you lease a used car?

No. Subaru and most other manufacturers do not allow leasing on a used vehicle. However, Ganley Subaru East has some fantastic rates on Certified Pre-Owned Subarus that will save you money. By going certified, you get a like-new warranty at a used car price.

What about those $79 a month lease payments you see on TV?
 
There is a reason they call it "fine print". Those low lease payments generally require a HUGE Cash Cap Reduction (also called due at signing if you can read the fine print). As you can see above, that can be a huge risk if your vehicle is damaged beyond repair or stolen. You loose it all!

What happens if I need to get out of my lease early?
When you sign a lease agreement you are obligated to make all of the monthly payments until the end of the lease. However, job downsizing, divorce, new baby or other factors may change your vehicle requirements. Don't walk away from the lease and harm your credit. Ganley Subaru East will buy out your existing lease, no matter what make or model, for a new Subaru that best meets your needs. Give us a call at (877) 361-3557 and we will be happy to inform you of your options.

When I BUY a car, I own it after the loan is paid off and I have no more payments. Why should I lease?
The typical car loan is for 5 years or 60 months. People are willing to accept a higher loan (vs lease) payment with the understanding that at some point they will own the title to the car. Remember, a car is a depreciating asset and should not be considered an "investment", unless you are Jay Leno! What often happens is that the owner gets tired of the car before the loan is up. Perhaps they want a different color, more features or perhaps that new Forester or XV Crosstrek? If you trade your the car before before the loan is up, you go from one higher payment to the next. Why not just lease at a lower payment?


To Lease or not to Lease, that is the question...

You should NOT lease a Subaru if you:
  • Tend to drive more than 15,000 miles per year.
  • You can pre-pay for additional miles @ .10 per mile at the time of leasing but the penalty afterwards is .15 per mile for overage.
  • Expect a change in your job or family status.
  • Changing status (job, family, baby) could alter the requirements of your current vehicle. Early termination of your lease could be costly.
  • Like to keep your cars for a long time.
  • This allows you years of no car payments.
  • Mistreat your cars or don't maintain them.
  • You are responsible for maintaining your leased vehicle according to Subaru's specifications
  • Want to customize your car.
  • What goes on must come off without damaging or altering the car when you turn it in. This commonly happens with performance vehicles like a WRX/STI.
 
Consider a Subaru lease if you:

Want a lower monthly payment or more car for your money

Desire less maintenance headaches.
  • Subaru's 3 year, 36,000 mile bumper-to-bumper warranty covers everything (even wiper blades) except for regular scheduled maintenance - which you would do anyway whether you bought it or leased it.
  • Have fairly consistent mileage history so as to not incur mileage penalties.
  • Enjoy the latest safety, features, technology and mileage improvements.
  • Just like the smell of a new car.

Conclusion

As you can see, there are many factors to consider when deciding if a Subaru lease is right for you. We recognize that every customer has unique requirements. At Ganley Subaru East, our goal is to LISTEN to your requirements and PROVIDE you with helpful information to make a good decision. If we don't think your circumstances are right for a lease, we'll tell you!
 
Use the link below to select the Subaru you want and then ask us to run BOTH lease and purchase payments for you. You'll be surprised how easy it is!

Ganley Subaru East

28840 Euclid Ave
Directions Wickliffe, OH 44092

  • Call or Text Sales: (877) 361-3557
  • Service: 844-321-6499
  • Parts: 844-488-6404

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