Here’s the latest reader question, along with my reply!
Warren asks: Subaru of Little Rock wants $446.00 per month for a three-year lease at 15,000 miles per year with $842.50 down. I am totally clueless on the value of this information. My salesman this morning emailed me to say they’ll wave the $842.50 down and not charge me for the optional tow hitch that I had asked for to tow my 1,400 lb. pop-up camping trailer. The cost of the dealership tow hitch was already factored into the rates expressed . This Outback is a 4 cylinder version not the six cylinder.
My reply: When you lease, you’re essentially renting the vehicle for a period of time, with the cost of the rental based on a variety of factors, including the price of the vehicle and its expected depreciation over time.
In your case, the dealer wants about $16,000 to rent you the car for three years. This figure does not, I assume, include “acquisition fees” and so on. But it may.
In any event, let’s take the $16k rental and consider…
The 2019 Outback’s base price is $26,345.
So, you could buy an Outback for about $8k more than the cost of leasing one. I don’t know all the details of the lease deal you’ve been offered; it may be the numbers you gave me are based on a loaded Outback. But $446/month seems haltingly high for a car that – even with a few options – ought not to cost you more than about $30,000 or so to buy.
A rough calculation of a six-year purchase on a principal of $30,000 works out to about $416/month (assuming zero interest).
More people than ever are leasing – because (usually) the payments are lower than they would be if they bought the same car. But $446 per month to lease an Outback?
Nothing wrong with the Outback – I like this car – but it’s not a Lexus and spending nearly half a grand each month to lease one seems a little much to me.
. . .
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