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Subaru Lease Buyout: Loan/Financing Options

akk6617akk6617 Member Posts: 10
edited December 2023 in Subaru
Hi

My 2021 Subaru Crosstrek lease is about to expire at the end of December(I’m in NJ). I’d like to do a lease buyout and am searching for the best interest rates. The Subaru dealership sent me a credit application however I’d like to shop around for the best rate as I’m not required to use them for financing.

.
I don’t want to have multiple hard inquiries hit my credit. Is there a resource to whom I can submit an application & have them provide me with competitive interest rates from various loan providers? Lending Tree?

Also, can’t Subaru provide their interest rate range without my having to submit the application?

Thanks in advance!

Comments

  • kyfdxkyfdx Moderator Posts: 236,618
    akk6617 said:

    Hi

    My 2021 Subaru Crosstrek lease is about to expire at the end of December(I’m in NJ). I’d like to do a lease buyout and am searching for the best interest rates. The Subaru dealership sent me a credit application however I’d like to shop around for the best rate as I’m not required to use them for financing.

    .
    I don’t want to have multiple hard inquiries hit my credit. Is there a resource to whom I can submit an application & have them provide me with competitive interest rates from various loan providers? Lending Tree?

    Also, can’t Subaru provide their interest rate range without my having to submit the application?

    Thanks in advance!

    Have you tried calling SMF directly?

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  • akk6617akk6617 Member Posts: 10
    Hi @kyfdx,

    Thanks for responding! My understanding is that SMF will shop the rate and take a percentage & I don't feel that's in my best interest. I think I'm going to reach out to a few lenders directly. Just wanted to see if there was a better option.
  • kyfdxkyfdx Moderator Posts: 236,618
    edited December 2023
    akk6617 said:

    Hi @kyfdx,

    Thanks for responding! My understanding is that SMF will shop the rate and take a percentage & I don't feel that's in my best interest. I think I'm going to reach out to a few lenders directly. Just wanted to see if there was a better option.

    SMF is a bank (spoiler alert: It's Chase Bank).
    They'll either offer to finance the vehicle, or they won't. They won't outsource the financing.

    The dealer will definitely shop the rate. You shouldn't care who makes money, as long as you get the lowest rate. It's unfortunate, but a dealer can markup the rate from the bank, and it's still likely to be lower than what you can find on your own.

    But, you should definitely shop around. Multiple inquiries within a month for auto financing all count as one pull. Plus, the amount it affects your credit score is minimal. That would be the least of my worries.

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  • akk6617akk6617 Member Posts: 10
    @kyfdx
    I did know that Chase was involved as that's who I paid monthly however I thought SMF was separate as they offered to work with either SMF or with Chase directly.
    I assumed that the interest rate would be higher through SMF if they took a percentage so I reached out to Chase directly. Will see how they respond. Also reached out to AutoPay whom I found on a list of best lenders.

    A friend who used to work at a car dealership suggested I extend the lease and keep an eye on interest rates as he seemed to think interest rates would go down. Is that the word on the street?
  • kyfdxkyfdx Moderator Posts: 236,618
    akk6617 said:

    @kyfdx
    I did know that Chase was involved as that's who I paid monthly however I thought SMF was separate as they offered to work with either SMF or with Chase directly.
    I assumed that the interest rate would be higher through SMF if they took a percentage so I reached out to Chase directly. Will see how they respond. Also reached out to AutoPay whom I found on a list of best lenders.

    A friend who used to work at a car dealership suggested I extend the lease and keep an eye on interest rates as he seemed to think interest rates would go down. Is that the word on the street?

    Installment loan rates are hard to track. Plus, the older your car gets, the higher the rate. If you want to buy the car, do it at lease end. Get the best rate you can, and be done with it.

    If you can buy it from SMF directly, without involving a dealer, you’ll likely save on extraneous fees.

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  • akk6617akk6617 Member Posts: 10
    edited December 2023
    @kyfdx Ok great, thanks so much for the advice. So helpful!!
  • akk6617akk6617 Member Posts: 10
    @kyfdx
    Hi there, So the local Subaru dealer got back to me with their offer. $10K down and a monthly payment of $401/month. The 10K includes their extended warranty which by itself is $2900. I cannot purchase through the them without purchasing the warranty. I asked about the interest rate, they said it would be within 7-9%. When I told them I had a better rate with a credit union (5.74%) they said they would go back to the bank to see about matching the rate but only if I commit to the sale through them. (rolling my eyes)

    I then called SMF as no one had gotten back to me. They approved my loan amount with an interest rate of 8.24%. I asked if they would match the credit union rate and they declined.

    Do I need the extended warranty?
  • kyfdxkyfdx Moderator Posts: 236,618
    akk6617 said:

    @kyfdx
    Hi there, So the local Subaru dealer got back to me with their offer. $10K down and a monthly payment of $401/month. The 10K includes their extended warranty which by itself is $2900. I cannot purchase through the them without purchasing the warranty. I asked about the interest rate, they said it would be within 7-9%. When I told them I had a better rate with a credit union (5.74%) they said they would go back to the bank to see about matching the rate but only if I commit to the sale through them. (rolling my eyes)

    I then called SMF as no one had gotten back to me. They approved my loan amount with an interest rate of 8.24%. I asked if they would match the credit union rate and they declined.

    Do I need the extended warranty?

    If it's me, I save the $2900 to pay for repairs out of pocket.

    Once you have the car in your name, you can see if your credit union will re-finance the loan for you.

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