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Leasing vs. Buying: Which is right for you?



If you're looking for a new Subaru in the Phoenix area, Camelback Subaru is your one-stop shop for great customer service and new and used car deals. Before you get here though, you may ask yourself whether you should be buying a new Subaru or leasing one. While our sales professionals are happy to help you answer this question on-site, here are the answers to some of the questions regarding leasing that we most frequently receive.

Leasing a new Subaru has several advantages for the prospective Subaru driver. When you sign a lease on one of our new Subaru models, you commit to pay manageable monthly payments for a short term, usually 24 or 36 months depending on the specific car, payments, and special offers. This short term agreement lets you explore the benefits of a new vehicle without committing to the full cost. At the end of the term, you can decide to pay the remaining cost of the car after the lease payments to purchase the vehicle, extend the lease, or lease another brand new Subaru!

So...what is the difference?

There a few major differences between leasing and buying a vehicle. The long term commitment of purchasing a vehicle is not for everyone--that's one reason why we'd suggest leasing. Leasing may not give you the power of ownership, but it does help you steer clear of the pitfalls of negative equity. Leasing a vehicle from Camelback Subaru also ensures that you'll have the full support of our sales staff and service department, especially since your new Subaru will be under factory warranty for the life of the lease.

Leasing

Lower monthly payments and less money down can make leasing seem like a great deal. The truth is that leasing offers a lot of convenience, but only if you are willing to abide by the restrictions, which can include lower mileage limits, typically only 12,000 miles per year, sometimes 10,000 miles per year, and diligent upkeep and care of the car and, in some cases, penalties for early termination.

After a lease deal is offered to you, be sure to pay close attention to the negotiated purchase price of the vehicle and any additional fees outside the lease rate. Never sign a lease contract unless the residual value or optional purchase price at the end of the lease is clearly shown.

You are a good candidate for leasing if you prefer to have a new car every few years, put limited miles on your car and/or can write off your car lease as a business expense.

If you are using a lease simply to reduce the amount of your monthly payment, it may very well be that you are considering a car that, if you were to purchase, would be outside your realistic capability to make the payments. If that's the case, you should consider choosing a less-expensive vehicle. If you abuse the opportunity the lease offers, you will pay for it in the future.

Buying

Before considering the purchase of a new car, it is wise to establish the amount you are willing to spend, or to calculate the monthly loan payment. Don't forget that after negotiating the final price of the car, you will need to allow some extra cash to cover tax, title, registration and documentation fees.

Next, arrange your financing. You may choose to obtain a loan with the dealership or go with the manufacturer's financing. There are many options, including online financing or pre-approval of a loan from your credit union.

When you do some of these things you may not have a specific vehicle in mind, just a general price range. When you make the deal you write the dealership a check for the total amount. Some institutions will give you a lower interest rate if you have direct deposit and an electronic loan payment, so be sure to ask about it.

What is important to you?

Lease - If you enjoy driving a new car every two or three years, want lower monthly payments, like having a car that has the latest safety features and is always under warranty, don't like trading and drive an average number of miles, then leasing might be the way to go.

Buy - If you don't mind higher payments at first, like holding on to your cars and prefer to build up some trade-in resale value (equity), enjoy the idea of having ownership of your car, like paying off your loan and being payment-free for a while, then buying is a good option.

Remember, whether you lease or 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. Whichever option you choose, Camelback Subaru is here to help!

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