Leasing vs. Buying

Which One is Right For Me? Redding Subaru Explains

Should You Lease or Buy a New Subaru Here in Redding?

Our Redding, CA Subaru dealership is all about giving our shoppers plenty of options. That's so you can find the kind of new or used car that makes sense for your travels around the Redding and Red Bluff areas, and you can structure any lease or loan deal that works for the budget you have. By considering the benefits of both leasing and buying, we'll show you which way of financing your next new Subaru Outback, Forester, Ascent or Legacy will make the most sense, and we'll present a number of options so you can combine your specific edition with a down payment and monthly costs that works best. Be in touch today and see if leasing or buying from Redding Subaru is the way to go.

Benefits of Leasing a New Subaru

1. Ability to have a new car every two or three years

With all of the new safety, style and efficiency improvements that have and will happen, Leasing allows you to stay current and up to date and also allows you to plan as the costs are predetermined and fixed. 

2. Gap Protection

In the event of a total loss, the whole balance of the lease/residual is paid off, regardless of the actual market value of the vehicle, which is all that your casualty insurance will pay.

3. Limited Liability

The owner of the vehicle has primary liability. In the case of a lease, the vehicle owner is the company that leases you the vehicle, not the driver. The leasing company carries an umbrella policy, which covers everything over your primary liability limit.

5. Help in borrowing

The entire debt does not show on a balance sheet; therefore, a leased car does not show up as a liability on a loan application.

6. Tax Ramifications Have Changed to the Benefit of a Business Owner

The bigger the lease payment, the bigger the deduction, provided that the vehicle is used more than 51% of the time for business.

7. No depreciation risk

The guaranteed future value of the vehicle is the amount deducted at the beginning of the lease. It is also the expected value of the vehicle at the end of the lease. You have the term of the lease to decide if you want to complete the purchase.

- If the guaranteed future value compared to the actual market value at the end of the lease favors you, you complete the purchase.

- If it doesn't favor you, you simply turn the vehicle back to the lessor.

8.  Sales Tax Savings

The only thing better than a tax deduction is never having to pay the tax in the first place.The tax advantage of leasing is that you only pay tax on the monthly payments. For example, you would pay 8-10% of 100% in a buy situation, or you can pay only the tax on 50% in a lease, based on the guaranteed future value.

Common Objections to Leasing

1. "I won't own it.  I have no equity."

That's good, not bad! You won't have any equity because you won't pay for any equity. That's why your payment is so low. In order to have equity in the vehicle, or own the vehicle, your payment would have been much higher. Instead of equity in the vehicle, you have cash. You can use this cash to buy the vehicle if you want, but you don't have to decide until the end of the lease. Some assets are good to own, like a house or stocks, because they have the possibility of appreciating.

Vehicles do not appreciate; they depreciate.  Would you pay $100,000 for a house if you thought it would be worth $75,000 in three years?

2. "I've had a bad experience with leasing or someone I know had a bad experience."

It's true. Some people have gotten burned in leasing. It's because they were put into the wrong lease or it wasn't fully explained to them. Many people were put into an open-end lease and didn't realize they were guaranteeing the residual at the end. We don't offer open-end leases.  We offer closed end leases. In other cases, perhaps they exceeded the 15,000-mile per year allowance or had a charge back for abnormal wear and tear. If they had purchased the same vehicle and drove the same number of miles, or traded it in the same condition, they would have experienced the same deductions.

We won't let that happen to you. We tailor the lease specifically to your needs and let you know what your rights and obligations are up front.  

3. "I drive too many miles" or "I don't drive enough miles."

If you drive more than 15,000 miles per year you are an ideal leasing candidate. You can build the extra miles into the lease at .10 per mile or pay .15 per mile at the end of the lease. Which would you prefer?

.10 per mile is quite a savings for you. If you buy the same vehicle and drive the same number of miles, when you go to trade it in, they will deduct .25 to .30 per mile, over 15,000 miles, to get the appraised value. You can actually buy the miles you need cheaper in a lease than you can from yourself!

4. "I don't understand leasing."

Don't feel bad, very few people do. Worse yet, some think it is renting. Leasing is probably the most misunderstood consumer transaction in America.

Unfortunately, what has kept many people from leasing is the fear of the unknown.

According to a survey by J.D. Power and Associates, once people have leasing explained and they try it, 93% of them are so satisfied they lease their next vehicle! We don't view leasing as just another way to buy a car. We view it more as an insurance policy. It removes the risk of the vehicle's depreciation. Leasing offers value; ownership does not. 

Leasing gives you the ability to pay for the part of the vehicle you use, and give you a choice of "purchasing" after you have driven it for a few years.

Benefits of Buying

Leasing any new Subaru is appealing right away for an obvious reason. For well-qualified shoppers, you might not need to put much down, if anything at all, up front. Lease deals generally structure your monthly payments to be lower than you'd have when paying off a new car loan, and since your lease agreement will coincide with your new Subaru's warranty plan, you'll have most service costs covered as well. At the end of your lease term, you'll have plenty of options with what to do with your current Subaru or for finding a new one. You can either buy out your Impreza, Crosstrek or WRX for its remaining value, start a new lease if you want an updated version of the same Subaru, or you can go in a whole other direction.

Of course Subaru cars and SUVs are built to last, so if you're able to put down more up front and can afford higher monthly payments, buying your next Outback, Crosstrek or Impreza will be a smart long-term investment. You'll be amazed by the long-term value of any well-maintained Subaru that you can keep well past the point where your car loan is paid off, and many models from this brand known for reliability and value last well past 10 years on the roads around Redding, Shasta Lake and Red Bluff.

No matter how you finance your next new Subaru, you'll find great value. Visit or be in touch with Redding Subaru today and we'll help you make the best choice.

  1. Redding Subaru

    481 E Cypress Ave
    Redding, CA 96002

    • Sales: (530) 221-2436
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  • Contact our Sales Department at: (530) 221-2436
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