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I don't think that's entirely accurate. If I trade or private sell, I'm getting money (or a credit toward a new car and less sales tax on the new car after trade) because of the equity in my ownership of the car. You don't get any money when your lease is up, you just get more monthly payments.

I can sell now and get say $30k toward my next purchase. So, I could go your route of monthly payments and get something more expensive, say a used $36k STI, and only need to write a $6k check with no financing. You would have monthly payments on said STI minus whatever down payment.

I'm curious what insurance costs are like for a lease since you have no ownership in the car. Guessing it's higher due to increased liability.
 

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I don't think that's entirely accurate. If I trade or private sell, I'm getting money (or a credit toward a new car and less sales tax on the new car after trade) because of the equity in my ownership of the car. You don't get any money when your lease is up, you just get more monthly payments.

I can sell now and get say $30k toward my next purchase. So, I could go your route of monthly payments and get something more expensive, say a used $36k STI, and only need to write a $6k check with no financing. You would have monthly payments on said STI minus whatever down payment.

I'm curious what insurance costs are like for a lease since you have no ownership in the car. Guessing it's higher due to increased liability.
Insurance is the same, there's no "larger liability."

The equity that you get back, is excess payments made on a depreciating asset. Your payments outpaced depreciation.

I'll make this really simple:

The car cost $30,000
You have paid $10,000 so far financing
Today you owe $20,000
Today resale is $25,000
Your $5,000 "equity" is just money that you already gave the bank being returned (your $10k in payments outpaced the rate of depreciation). You are not gaining equity like a house, these are depreciating assets. The car is worth less than when you bought it.

That is why you don't pay income tax on the money received from the sale.

The tax credit for a trade in is because you only owe the state for the period of time owned. The remaining state tax is credited to the new purchase.

That is a nice benefit, but for the lease, I only pay sales tax on the payments, not the total value of the car at purchase. I believe I'd get a similar credit for a lease with trade in as well, IIRC.

A lease on that same car, assuming similar assumptions, would have paid $5,000 in lease payments (+/- interest). We pay for the depreciation.
 

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'18 and '19 Crosstrek Limiteds
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Here's one way to look at it...

I found a lease offer on Subaru's site (details below). If you purchased it at the end of the lease your total payments to own the car after three years would be $24,756.

If you bought the same car at a sale price of $21,905 (net cap cost less acquisition fee) at Subaru's 0.9% APR with a three year term and 10% down ($2,191, similar to the amount due at lease signing) your total payments would be $22,180 but, of course the monthly payments would be higher ($555.24 in this case).

Some people lease for the convenience or because they want a lower monthly payment but there's no question that leasing costs more over the long term. Plus you have be careful with the miles. Go over and you'll get dinged, go under because of, say, a pandemic, and you've paid for miles you haven’t used.

Assuming I got the math right and didn't leave anything out, that's quite a significant difference - $2,576 more, going the leasing route!

$229/Month Lease

Offer valid for Zip Code 68516

Now through January 4, 2021 Lease a new 2021 Crosstrek for $229/Month on a 36-Month Lease (Standard Crosstrek trim, code MRB-03). $2,429 due at lease signing. $0 security deposit.

Disclaimers and Legal

MSRP $24,645 (incl. $1,050 freight charge). Net cap cost of $22,500 (incl. $595 acq. fee). Total monthly payments $8,244. Lease end purchase option is $16,512. Must take delivery from retailer stock by January 4, 2021. Other leases available on other trim levels. Cannot be combined with any other coupon, direct/email offer or promotional offer unless allowed by that offer. Special lease rates extended to well-qualified buyers. Subject to credit approval, vehicle insurance approval & vehicle availability. Not all buyers may qualify. Payments may be higher in some states. Net cap cost & monthly payment excludes tax, license, title, registration, retailer fees, options, insurance & the like. Retailer participation may affect final cost. At lease end, lessee responsible for vehicle maintenance/repairs not covered by warranty, excessive wear/tear, 15 cents/mile over 10,000 miles/year and $300 disposition fee. Lessee pays personal property and ad valorem taxes (where applies) & insurance. Offer not available in Hawaii. See participating retailer for details.
 
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2019 Crosstrek PHEV Lagoon Blue Pearl
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Here's one way to look at it...

I found a lease offer on Subaru's site (details below). If you purchased it at the end of the lease your total payments to own the car after three years would be $24,756.

If you bought the same car at a sale price of $21,905 (net cap cost less acquisition fee) at Subaru's 0.9% APR with a three year term and 10% down ($2,191, similar to the amount due at lease signing) your total payments would be $22,180 but, of course the monthly payments would be higher ($555.24 in this case).

Some people lease for the convenience or because they want a lower monthly payment but there's no question that leasing costs more over the long term. Plus you have be careful with the miles. Go over and you'll get dinged, go under because of, say, a pandemic, and you've paid for miles you haven’t used.

Assuming I got the math right and didn't leave anything out, that's quite a significant difference - $2,576 more, going the leasing route!

$229/Month Lease

Offer valid for Zip Code 68516

Now through January 4, 2021 Lease a new 2021 Crosstrek for $229/Month on a 36-Month Lease (Standard Crosstrek trim, code MRB-03). $2,429 due at lease signing. $0 security deposit.

Disclaimers and Legal

MSRP $24,645 (incl. $1,050 freight charge). Net cap cost of $22,500 (incl. $595 acq. fee). Total monthly payments $8,244. Lease end purchase option is $16,512. Must take delivery from retailer stock by January 4, 2021. Other leases available on other trim levels. Cannot be combined with any other coupon, direct/email offer or promotional offer unless allowed by that offer. Special lease rates extended to well-qualified buyers. Subject to credit approval, vehicle insurance approval & vehicle availability. Not all buyers may qualify. Payments may be higher in some states. Net cap cost & monthly payment excludes tax, license, title, registration, retailer fees, options, insurance & the like. Retailer participation may affect final cost. At lease end, lessee responsible for vehicle maintenance/repairs not covered by warranty, excessive wear/tear, 15 cents/mile over 10,000 miles/year and $300 disposition fee. Lessee pays personal property and ad valorem taxes (where applies) & insurance. Offer not available in Hawaii. See participating retailer for details.
I would never buy out a lease. There is so much junk built into that purchase price. It is rarely the market value of the car at the future date.
 

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@AstroKats there's a reason I shared that article with the forum. Leasing does cost more when you look at the same time frame as ownership. @Snow Drift would have 2 cars for the same lease periods as my ownership of 1 car and my only costs are routine maintenance, registration, and the roughly $600/yr in insurance. Since it's the PHEV, I won't have to worry about brakes, the tires should last long enough, and no changing bulbs since the majority are LED. This car is easier to maintain than my Legacy. I've driven the car enough for work that the reimbursement has covered more than the electricity and gas I've put in the car (still have $360 in the credit).

To date, I'm at $20,100 cost of ownership for 18 months. This includes all costs for the car, insurance, registration, maintenance, fuel, accessories, and my trade ($13,500). I'm looking at $670/yr for maintenance and about $160/yr in gas/electric based on my driving. $830/yr is much better than $400/mo in car payments.

When leasing, any accessories you buy (homelink mirror, mats, splash guards, bumper guard, etc.) is money down the drain because you won't see that on the other side of the lease. I probably lose some money there when I sell, but I'm not buying them through the dealer so I save.
 

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For what it’s worth, I’d like to include my two cents. If you’ll indulge me.

I have been leasing a 2019 Subaru Forester Premium. I have been considering making the jump to a full electric, but the wife is not entirely comfortable with that due to lacking infrastructure near summer destinations. we’ve had several scenarios come up where the Forester was too small to fit all of our cargo and the kids in the back.

so I started driving outback‘s and I like them. I formally drove a 2011 outback limited that I traded in towards my lease of the Forester. Long story short, the outback needed a lot of maintenance and some work done on it, and I couldn’t justify that. In hindsight it would’ve been cheaper, but the last two years with the Forester we’re pretty good and I had zero problems.

at the end of the day, the Outback’s cargo space is more usable even though it is not as tall as the Forester space. So when you were piling up a ton of beach things like chairs coolers and luggage, it fits better in my outback.

just as a point of reference, my lease was about $360 per month with zero money down and all fees rolled into the lease. I remember when I bought my 2011 Outback I was paying like $925 a month for 36 months. So, when you add everything up it probably comes out evenly except you have the actual equity of the trade-in. I was able to get out of my lease in 24 months instead of 36 months with zero penalty. I suppose that means my car had more value than they were expecting at the end of the lease.

my onyx now will cost me about $625 for 60 months. While I agree that there will be some equity in it, by the time I trade this in it probably would be worth next to nothing. there is a value in always having warranty coverage. There is a value in having maintenance included in your lease. There is a value and an expected recurring cost the same way you pay your cable bill.

cars will never ever ever ever ever ever ever ever not depreciate. Unless you were talking about classics from 50 or 60 years ago.

One of the perks of leasing is expected wear and tear. With leasing, I would never have to put on new tires, change brakes, rotors, spark plugs, all that other junk. There is a value and not getting the sticker shock at the dealer when you get rung up for a $500 service. Routine service.

if something were to happen to this car, like an accident, and it was totaled, I would probably reconsider the Hybrid. this car has been largely a commuter for me, and my wife still drives a large SUV. We still prefer her SUV anytime we go somewhere as a family. It’s bigger, it drives a little nicer, but it doesn’t have all the driver assist features. fuel economy is comparable because I have the turbo engine.

so, long story short, I think there’s a lot of value in the Hybrid as long as the form factor is good for you. I looked at a RAV4 prime, but it was not good for me. It’s too expensive for what you get. Toyotas interior has really fallen behind. I really like Subaru all wheel drive along with my comfort level of all their internal stuff. I would have no problems shelling out top dollar for the Hybrid. I would expect it to get me no less than 150,000 miles. At that point the sector change is so greatly that I probably wouldn’t want it longer than that anyway. I look at it as a sunk cost. Let’s say you pay $35,000 after the federal rebate. That’s it I’m expecting zero back after I sign that paper. On aggregate, that’s $194 per month if I hold onto it for 15 years. that is a heck of a lot better than a lease. Even if I buy out the lease at the end of the term.

but, if you were something that likes to get something new every four or five years, I would see why leasing could be a less stressful alternative. Turn it in at the end get a new one. Rinse and repeat. There is a cost of convenience involved. Only you can determine if it’s worth it or not.
 

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We've pretty much flogged this horse to death, many times over. Leasing is just another form of financing a new vehicle. With few exceptions (and there are some) it will cost more in the long term to lease than to buy because the finance company is taking on additional risk compared to a simple loan. That's all I have to say tonight... 😸
 
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I got into a nice tangent with Siri dictating my post :ROFLMAO:
Have you tried saying "Hey Cortana" to Siri? Or the other way around, I can't remember. It gets pretty funny...
 

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Leasing and buying should not be looked at as pure equivalents. If looking at spending the least amount of money then buying used always wins. But some people want more out of a vehicle than lowest cost so they are willing to pay for that added value.


Please, people, stop saying leasing is a waste of money. It is for some but not for everyone.
 
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