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2013 and earlier-Subaru Forester Lease Questions

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Comments

  • ursusursus Posts: 48
    Thank you Car_man.
    I got mine X Premium+All Wheather last Saturday. According to the dealer, residual was 62% and MF 0.00160 for 36/10K through Chase.
    MSRP: $24,668
    Cap Cost: :$22,497 (incl. freight and 0 reduction) - I guess it's "at invoice" w/out freight or $695 under invoice since freight is included?
    Adj Cap Cost: $23,092 (incl. $595 acc. fee)
    Residual: $15,294
    $278/month and $1,350 at signing (tax, dealer fee, first month, tags/registration).
  • ateixeiraateixeira Posts: 72,587
    62% is an amazing number. It's low 50s for most competitors.
  • You might ask them to spell out what's in the $1,350 at closing?

    you don't pay tax up front on a lease.

    if 1st month is $278+tags/regis of $150, that leaves dealer fee of $900 - yikes!
  • ursusursus Posts: 48
    Actually, it was my choice to pay taxes ($720) upfront, rather then rolling them in the lease (extra $20/month). Dealer fee was $289 and I know exactly what was in the $1,350 ;)
  • For my benefit, can you tell me what the economic advantage is to paying the tax up front. It's not like your saving on any money factor financing cost since the tax is applied last?

    If you have the $720 available for the tax, why wouldn't you just park it in your savings account or other no risk investment, then siphon the $20 each month from it. Certainly, we are not talking about a big difference, but it is more than zero.

    thanks
  • ursusursus Posts: 48
    I like lower monthly payments, that's all.
    Plus, you will pay interest on the sales tax by adding it to the adjusted cap cost. By "parking" these taxes in a savings account even at 2%, you will earn about the same amount as you'll pay in finance charges (on you sales tax included in the lease payments), even if you don't "siphon the $20 each month" from your savings account. If you do "siphon the $20 each month", then you will lose money.
  • Tax is NOT added to the cap cost.

    The lease payment is determined first THEN tax is added by multiplying your lease payment by (1+ your state tax rate)

    Ask anyone.

    No economic advantage in this case to have the lower payment. Better to park the money in your savings account to

    1) earn a little interest
    2) have cash on hand in case of emergency
  • That depends on where you live..

    Many, many states charge the tax upfront (some on the entire sales price!).

    regards,
    kyfdx

    Moderator - Prices Paid, Lease Questions, SUVs

  • ursusursus Posts: 48
    Exactly, but tsxowwner doesn't know that :)
  • pano1pano1 Posts: 11
    Hey Car_man! I usually pay cash for all vehicle purchases but am having people tell me that I am foolish for not leasing since I seldom keep cars for more than a year or two. I am looking at an '09 Forester Limited that stickers for $27350. I don't want to lease for more than 24 months. I can buy the car outright for $24750. If you could be so kind as to give me your opinion on buying outright versus leasing for this situation, it would be greatly appreciated.

    I can usually resell my vehicles pretty easily by asking for KBB Private Value since people who know me know that I am very easy on cars and scrupulously maintain them. I drive 12000 mi/year and would be looking for a lease that allows 12000 mi. I know that Foresters keep about 61% of their value after 3 years and find it difficult to see that leasing for 24 months would be a better deal than buying outright.

    All the jargon that is used in this forum is unmitigated gibberish to me because I know nothing about the process, so if you would be so kind as to avoid that in your explanation or opinion, it would be very helpful to me. What I would like for you to help me determine is based upon the following premise. I believe that at the end of two years I will be able to sell my Forester for more money, thus expending less, by buying outright than by leasing. Feel free to blow my thesis out of the water. If you could provide some comparatives or numbers for my situation, it would be very helpful.

    Thanks,
    Pete
  • I can definitely see in this climate that leasing would far outweigh buying. The used car market is just as bad off as the new car market. Dealers are more and more frequently quoting people wholesale prices on their trade-ins. Even if you sell your car privatley after 2 years you are not guaranteed to get KBB value.

    Having said all that, you can't get a good deal leasing just any car. The numbers are the sole factor. You have to find a 24 month lease that has a high residual value (around 70% is good) and has at least a midrange money factor.

    Not sure on the Forester. The Legacy has numbers like this for 24 months. In fact the 24 and 36 month leases are about the same monthly payment. This is normally not the case. 24 month leases normally are $50-$100 more per month.
  • pano1pano1 Posts: 11
    Thanks for your input, but I'm still looking for a definitive answer that isn't mired in technogibberish. I don't know what a money factor is nor do I care about a residual.
    What I'm asking here is at the end of my 24 month lease, will the lease be more cost effective than me buying outright and then reselling at a value higher than what I think a residual value is?? Example: my local paper is advertising a 2009 Toyota Camry on a 24 month lease for $9995. The car stickers at $22395 and the residual is $13935. This is a one payment ($9995) with 15K miles per year. So I know that for $9995 I can have a Camry for 2 years and walk away. My out of pocket is $9995. Now, say I buy the same Camry for $19995 have it for two years with no mileage penalty and then sell it in two years for $13935. My out of pocket is $6000. So in my example here I saved $3000 by buying outright rather than leasing. So indianajohns, can you see where I'm coming from now?? Remember that I am a virgin and unlike you, I don't know the workings of lease like you aces here do, so I might be full of it and that's why I am seeking your counsel. Thanks for your time.

    Pete
  • ateixeiraateixeira Posts: 72,587
    It may be worth it to find out if the new tax deduction still applies if you don't pay all the tax in a given year, since they just passed that car-buying incentive.

    Maybe you deduct it little by little, as you pay the state sales tax.
  • My guess is: Leases won't qualify..

    Moderator - Prices Paid, Lease Questions, SUVs

  • ateixeiraateixeira Posts: 72,587
    They should - why not? You're still paying state sales tax, and it still helps the auto industry and the economy.

    The deduction is proportional so that seems fair.
  • In most cases, the owner of the car (the bank) pays the tax... you are just reimbursing the bank for their expenditure, according to your lease contract.

    So... since you don't pay the tax, you don't get the deduction..

    As stated above, this is my (somewhat educated) guess...

    Moderator - Prices Paid, Lease Questions, SUVs

  • Not an expert, but I will throw out some thoughts/questions for discussion:

    - you might get less than $13,935 in two years.

    - does your 19,995 include everything - tax etc if not need to factor that in

    - are you paying cash? lost return on your 10,000 (19,995 - 9,995)
  • Thanks for all the info here guys. I signed the following deal last week

    2009 forester 2.5x limited
    MSRP: 26,690
    negotiated price: 24,479 (~500 under invoice)
    acquisition fee: 595
    SVCS fee: 99
    Gross cap cost:25,173
    Residual (58%):15,480
    money factor 0.0016
    term: 36 months 15,000 miles/yr
    total due at signing: 445.48 (1st month plus title and registration fees)
    total monthly payment: 334.29 + 18.39(tax) = 352.68

    I feel I got a pretty good deal.

    We just had some freezing rain/snow and the forester handled it as well as the jeep commander we just turned in, but with better gas mileage :)

    Very fun to drive. My only gripe is the climate control takes a long time to switch from blowing hot to cold air, but no car is perfect....
  • ateixeiraateixeira Posts: 72,587
    Sounds good, prices are a lot lower than a year ago. Congrats.
  • pano1pano1 Posts: 11
    Still seeking an answer from the gurus here about the merits of buying or leasing. In my previous post (see above) I surmised that I would be further ahead by buying my Limited outright rather than leasing for 24 months. His residual was almost $16K after 3 years so a 24 month lease should yield a much higher residual. If I pay cash for the same vehicle gdtrfb bought at roughly $24K, certainly the residual would be much higher than the $16K he has after 36 months. As I read it, after two years the value of my Limited should be somewhere about $18k. Simple math tells me that I would have spent $6k for 24 months use versus the $13k that gdtrfb did on his 36 month lease. Am I missing something here?? Oh, I'm paying cash and could care less about money factors, SVCS, acquisition fees, etc. I just have to be overlooking something here because buying outright seems to just be a plain better deal.

    Thanks for your patience,
    Pete
This discussion has been closed.