Need Feedback on 2017 Outback lease terms being quoted

ressalg

Hi,

So I believe I have all the variables to determine what the monthly price should be and am coming to a different number than what's on the dealers lease sheet.

Not sure if this matters but it's for a 2017 Subaru Outback Limited 3.6 with eyesight in Colorado.

With 2,000 down the quote is 370-380 a month but my calculations come out lower. It would be much appreciated if someone could let me know what they come to or what variables I am missing. Thanks in advance!

Money Factor: 0.00165
Residual: 68%

MSRP: 38,460.00
Discount: (4,514.00)
Sales Price : 33,946.00
Taxes: 3,014.02
D&H : 499.95
Title & Re: 27.20
Total: 37,487.17

Regards,

Alex

kyfdx

ressalg said:

Hi,

So I believe I have all the variables to determine what the monthly price should be and am coming to a different number than what's on the dealers lease sheet.

Not sure if this matters but it's for a 2017 Subaru Outback Limited 3.6 with eyesight in Colorado.

With 2,000 down the quote is 370-380 a month but my calculations come out lower. It would be much appreciated if someone could let me know what they come to or what variables I am missing. Thanks in advance!

Money Factor: 0.00165
Residual: 68%

MSRP: 38,460.00
Discount: (4,514.00)
Sales Price : 33,946.00
Taxes: 3,014.02
D&H : 499.95
Title & Re: 27.20
Total: 37,487.17

Regards,

Alex

The money factor is marked up from the .00115 base.
Residual is correct for 36/10.
Tax in CO is collected on the lease payment, so their tax number and total aren't relevant for a lease.
D&H; $499? This is likely a garbage fee

Also, $2000 due at signing isn't the same as $2000 downpayment. Part of that $2000 goes for 1st payment, and $595 acquisition fee (which also isn't shown on your quote).

Ask them for the adjusted CAP cost, and to please not give you numbers that aren't relevant to the lease.

ressalg

Thank you so much for the feedback!

I will see about the money factor because I should qualify for the best rate and this is a 36/10.

For the 2,000 down, so when I told them I would put that down it was really only reducing the capitalized cost by 2,000 minus all additional fees?

So the adjusted CAP cost should be taking out the tax and a piece of the down payment, correct? (putting it around 34,000)

Thanks,

Alex

karhill1

The price should be negotiated the same as if you were purchasing the vehicle.

The MF of .00165 is the same as a 3/96 percent interest rate. Not great. To get the actual interest rate, muliply the MF by 2400.

The fee of $499.95 is a FAKE FEE. In essence it is simply part of the price. In your case the price of the vehicle is actually $34,446 ($33946 + $499). It is not a fee in any sense of the word. It is nothing more than a dealer trick to increase profit.

The price you negotiate should consider this fake fee. Regardless of what the dealer calls this fee or says this fee is for it is a fake fee. It is not required by the government nor by the manufacturer.

Ask the dealer why it costs $500 to prepare the paperwork you sign in the F&I office, which is usually submitted electronically to the DMV.

Using your numbers, a 36 month lease payment would be about $362.

If you remove the fake fee, the monthly payment would be about $346.

Computing a lease payment is actually simple:

First, take the capitalized cost ($35,487 using your numbers) less the residual value ($26152) and divide by the number of months (36). For your numbers this is ($35487 - $26152)/36 = $260.

Second, take the capitalized cost plus the residual value and multiply by the money factor. For your numbers this is ($35487 + $26152) X .00165 = $102.

The monthly lease payment should be $ 362 ($260 + $102).

The cap cost will be the negotiated price plus any other costs, like tax, which you want to include in the cap cost less any amount you put down on the lease.

On a lease there is no need for a person with good credit to have to put any money down. In fact, most consumer advocates advise against putting money down on a lease.

kyfdx

ressalg said:

Thank you so much for the feedback!

I will see about the money factor because I should qualify for the best rate and this is a 36/10.

For the 2,000 down, so when I told them I would put that down it was really only reducing the capitalized cost by 2,000 minus all additional fees?

So the adjusted CAP cost should be taking out the tax and a piece of the down payment, correct? (putting it around 34,000)

Thanks,

Alex

If they are marking up the money factor, that isn't credit dependent. It's just a revenue enhancer for the dealership. Arguing that you have good credit won't matter. Telling them you won't sign a lease with a marked up money factor might help.

ressalg

I know I said this before but thank you so much for this feedback! This whole process is always a nightmare so having someone familiar with it that is willing to help is great!

I did stupidly put a deposit down on this vehicle (500) because it was still in transit so I have that to take into account as well.

Michaell

ressalg said:

I know I said this before but thank you so much for this feedback! This whole process is always a nightmare so having someone familiar with it that is willing to help is great!

I did stupidly put a deposit down on this vehicle (500) because it was still in transit so I have that to take into account as well.

That $500 should be credited as money out of pocket at the beginning of the lease. We also had to give our Subaru dealer a $500 deposit to hold the Outback my wife wanted.

What dealer is this? We used Groove on Broadway.

ressalg

Thanks for the deposit into; so that deposit becomes part of the down payment essentially?. This was at Shortline.

Michaell

ressalg said:

Thanks for the deposit into; so that deposit becomes part of the down payment essentially?. This was at Shortline.

It should; that's how mine was applied