BobbyR Posted January 20, 2019 Share Posted January 20, 2019 Another way to look at a lease is that you are borrowing money to buy the first 3 years of the car's life along with the right to purchase the remainder at the end of the 3 years. If you do buy out the lease, you come out pretty much the same financially as if you had bought the car outright at the outset at the same interest rate. I have leased five vehicles and have only bought out one of them because buyout was at a very attractive price. In all the other cases the buyout was at or higher than market so I turned the cars in for new ones. For me, it's the convenience of leasing that I find attractive. I don't want any mechanical or reliability issues with my cars so it's important to me to always be in a near new car with a new car warranty. Leasing just makes it a lot easier than buying with no hassles or dickering at trade in time. All your costs are known up front (assuming you don't damage or wreck the car). btw, it was our previous Subaru Outback (which wasn't leased) that convinced me to never keep a vehicle beyond factory warranty. We purchased that vehicle (a 2.5XT) in 2005 and just got rid of it last year after sinking tons of money into repairs just to keep the damn thing running. I pity whoever bought it. Driving a car for 10 or more years isn't always the best approach financially. It's a crap shoot. Link to comment Share on other sites More sharing options...
TTG Posted January 24, 2019 Share Posted January 24, 2019 Again renting is renting car or real estate it does not matter, buying a car at the end of a lease is beyond dumb decision financially.... talk about over paying for something.... Have you ever leased a car? Do you know how lease returns work?? I have been leasing my daily drivers for a long time and have NEVER returned a lease...... Example on my last Subaru (I do not remember the exact numbers so here are the ball park figures) 2015 Legacy 3.6R = MSRP $32K (Factory ordered car) Selling Price = $28K w/ $0 down payment (you don't know what you are doing if you put money down on a lease) Term = 3 years / 15K miles per year Payment = $400 a month which includes 10% WA State tax (we will get to that later) Total amount of payments including tax = $14,400 ($12,960 without tax) Residual @ 55% = $17,600 If one chooses the buy the car total cost would be $17,600 + $12,960 = $30,560 .....almost equal to new price, I would not call them dumb When I decided to get rid of the Legacy 2 years 24K miles into the lease, its pay off was ~20K. I walked into the selling dealer and asked them to buy my car for $22.5K which they did (just as they did with all of my previous Subarus) and I got a check for $2500 Dealer certified the car and put it on their lot for $28,999 which sold in 3 days. Someone bought a 2 year old used car pretty close to what I paid for it brand new and they paid 10% tax on top of that. Total cost of ownership for me $400 X 24 months = $9600 less the $2500 = $7100. If I were to buy the car at the beginning and sell later I would of had to pay $2800 in taxes when brand new. With lease I am protected from lemons, accidents (which 2 of my Subs were in), theft & etc as well as all the headaches of selling a car. This simply works for some people especially in states with higher taxes. Life is too short to drive the same car for 10 years 200K miles (thinking about it gives me a headache) and many might disagree with that which is totally OK. In short, if you know what you are doing, there is a min difference buying a brand new Subaru vs leasing one. Link to comment Share on other sites More sharing options...
TTG Posted January 24, 2019 Share Posted January 24, 2019 Returning in May.. Should I repair tear in leather seat? It's about 3 inches long Or wait for inspection .. Before day of return..do I need to do oil change (it would be due) Do I have to thoroughly clean interior? I.e. pay a detailer Anything else? How it works in the US is that Subaru either sends someone to your house / business (where ever you chose) for an inspection or you make an appointment with the dealer with in 60 days of your return. They will give you a list of things that you need to repair or replace or how much they would charge you if you decide not to do any of these. My experience is that dealers will waive almost all of it if you chose to lease another car. GL Link to comment Share on other sites More sharing options...
Falcor Posted January 25, 2019 Share Posted January 25, 2019 When I decided to get rid of the Legacy 2 years 24K miles into the lease, its pay off was ~20K. I walked into the selling dealer and asked them to buy my car for $22.5K which they did (just as they did with all of my previous Subarus) and I got a check for $2500 Dealer certified the car and put it on their lot for $28,999 which sold in 3 days. Someone bought a 2 year old used car pretty close to what I paid for it brand new and they paid 10% tax on top of that. I have never thought about selling the car back to the dealer. On our last 2 leases we just turned them in at the end of the lease and leased the next vehicle. We are on our 3rd lease and it up in September. Your method sounds like a win win for everyone. Link to comment Share on other sites More sharing options...
BobbyR Posted January 25, 2019 Share Posted January 25, 2019 How it works in the US is that Subaru either sends someone to your house / business (where ever you chose) for an inspection or you make an appointment with the dealer with in 60 days of your return. They will give you a list of things that you need to repair or replace or how much they would charge you if you decide not to do any of these. My experience is that dealers will waive almost all of it if you chose to lease another car. GL I wouldn't fix anything except collision damage before the inspection. No point in fixing it if you don't have to. Link to comment Share on other sites More sharing options...
TTG Posted January 25, 2019 Share Posted January 25, 2019 I have never thought about selling the car back to the dealer. On our last 2 leases we just turned them in at the end of the lease and leased the next vehicle. We are on our 3rd lease and it up in September. Your method sounds like a win win for everyone. It totally is. Subarus keep their values and they are almost always worth much more than the residual value. Especially, where I live, it is very tough the find a clean low mileage Sub. Also, my coworkers usually line up to buy my leases as well. I wouldn't fix anything except collision damage before the inspection. No point in fixing it if you don't have to. Absolutely!!!! Link to comment Share on other sites More sharing options...
dgoodhue Posted January 26, 2019 Share Posted January 26, 2019 Example on my last Subaru (I do not remember the exact numbers so here are the ball park figures) If I were to buy the car at the beginning and sell later I would of had to pay $2800 in taxes when brand new. You mention above that you don't remember the exact numbers, so I won't dig into the numbers and beat you up on. Something is a little off on the numbers, because they don't add up (likely the residual or payoff is off). Anyways, monthly cost numbers are in the ball park. For the taxes, you are paying ~$1300 of the $2800 in taxes. In my state out taxes aren't quite that high, but we do have vehicle taxes based on the value. A lease is constantly paying the highest property tax rates (our vehicle taxes drop drastically in years 4 and 5), so in my state would essentially by paying the full sales tax if not more on 3 year lease vs buying a car and keeping it longer term. On your example in my state, year 1 excise tax is $720, Year 2 is $480 and year 5 is $80. Link to comment Share on other sites More sharing options...
TTG Posted January 27, 2019 Share Posted January 27, 2019 You mention above that you don't remember the exact numbers, so I won't dig into the numbers and beat you up on. Something is a little off on the numbers, because they don't add up (likely the residual or payoff is off). Anyways, monthly cost numbers are in the ball park. For the taxes, you are paying ~$1300 of the $2800 in taxes. In my state out taxes aren't quite that high, but we do have vehicle taxes based on the value. A lease is constantly paying the highest property tax rates (our vehicle taxes drop drastically in years 4 and 5), so in my state would essentially by paying the full sales tax if not more on 3 year lease vs buying a car and keeping it longer term. On your example in my state, year 1 excise tax is $720, Year 2 is $480 and year 5 is $80. Yes the numbers I provided was just to give an idea. It will always be cheaper to buy 1st of course, no argument there. I think what you are referring are the annual registration fees which is also based on vehicles value in WA. It has nothing to do if you own or lease the car and they will be due separately. Yes, on older cars they significantly go down. At the end of the day people will do their own math and make decisions accordingly. I have 6 cars in the stable and will always lease the workhorse. The rest I own out right. Subaru offers some amazing leases and my intention was to make people aware. Link to comment Share on other sites More sharing options...
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