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2013 and earlier-Subaru Outback Lease Questions
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According to lease - gross capitalized cost $24,000. According to ALG, Subaru residual percentage is 50% = $12,000. Should residual be around $12,000 or so? Please advise.
You accepted the higher residual price to help your monthly payments. The purchase price in your lease is what they will hang out for.
You can offer them less but who knows.....
thanks
ryan
What's the lowest down and lowest monthly they are likely to give on the 2010 3.6R or 3.6R Limited? Thanks.
So the average AWD vehicle is probably priced in the 30s. And I think the Outback is nicer than average, especially a 3.6R Limited.
With even the best residuals in the 50% range, you're talking about $13,500 depreciation in 3 years even at 55% residual. Divide that by 36 months and before we even factor interest or anything else, you're at $375 per month.
Sure you can negotiate a bit, but add taxes and fees, and you're back up to $400. It actually sounds about right to me.
The car is definitely hot. Both November and December sales were more than double the year prior.
Consider a Forester, for 2 reasons:
* prices are a bit lower to begin with
* residuals are fantastic, up to 59-62%
I think you're expectations are way too...low, I guess.
We are talking about a large, loaded, 6 cylinder, AWD, highly sought after vehicle.
For $199 you can lease a small FWD noone wants, sure.
I think they had a Forester lease for $259, but again, with a big down payment, and that's a 2.5X model with plastic wheel covers, no tinted windows, and cloth seats.
I was talking with a dealer about the Nav, just to talk, I would never buy one. I asked the price, he said $2,000, I said: how about $200, that's what a good Garmin costs, then I added: you people need to get real with your crazy prices. Of course, he doesn't own Subaru.
Just let this economic downturn go on for a year or two or three more, then check back on the price of a Forrester and the Nav, I guarantee you it won't be what it is now.
Nissan is coming out with a $400 unit with a small screen, but it'll even include a backup cam. That will be game changing. The multi-thousand dollar Navi packages will soon include stuff like myFord Touch offers. I think we'll soon see much better values./buying
Back to leasing...
what's it worth after you pay off a 5 year loan?
For a Subaru, a lot!
I kept my Forester for 9 years, and still got back $5550 (paid $19.2k new).
Car_man
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Lease prices vary by manufacturer and model. If people are willing to pay $400 on an Outback 3.6R lease why would Subaru want to let anyone lease one for $200? It's simple supply and demand. The demand is high and supply is low. This isn't a Ford Focus. This is a new style CUV/SUV that won Motortrend SUV of the Year and numerous other awards.
Also, you are saying in other posts that it makes no sense to lease a $29,000 Outback for $400, correct? Wrong. If you were to make a great deal with no money down except first payment you would be lucky to walk out with a 36 month lease for $400. However, to buy that exact same Outback on a 5 year loan at 2.9% and 7% sales tax your payment is well over $550. So by leasing you are saving $150 a month. $150 X 36 months of the lease = $5,400. Do you really think you are going to get $5,400 more than the Outback is worth vs what you still owe if you sold or traded it in after 3 years of your traditional 5 year loan?
Leasing makes perfect financial sense to me. I currently am leasing a 2010 Ford Edge SEL AWD for $297 on a 27 month lease with no money down and also a 2009 Tribeca SE for 36 months $360 with nothing down. Both cars had a "selling price" of just over $28,000. So either way I am saving $200-$290 a month vs buying ON EACH VEHICLE ($400-$580 per month total). Does that make sense?
The difference PLUS the local taxes and State DMV fees get added as the amount to be financed.
Depending on the interest rate and down payment and other "inception" fees its then simple math.
Typically, leases work well for mid to high end price cars and especially those that hold value (they have higher % residual), typically they are not attractive for low cost cars or those that loose a large % in the first 3 years.
I have both leased and financed, currently leasing a Subaru is not very attractive vs purchase at 2.9%, assuming you could find the vehicle you want.
If you like to replace your car every 3 years, leasing can be an excellent deal, averaged over 5-6 years it probably costs more, but you get to experience the new car smell more often.
For what its worth, I haven't leased a car I would like to keep in the last 10 years, so leasing worked for me, hopefully we will like the 3.6R Limited we ordered (to buy) many weeks ago - when we finally get it.
Lease Quote:
Sale Price on this vehicle is$25,698.00.
M.S.R.P. for this vehicle is $27,355.00.
36 months W/ 12K miles per year, $1,167 due at start which includes 1st mo pmnt and dealer fees & NO CASH CAP REDUCTION @ $350.61/mo plus tax
Any thoughts, comparisons. Does this seem appropriate sale price and lease factor/residual applied. Anyone get better?
I always tell the dealer to give me their best sale price and then tell them I am not paying any of their bullcrap fees like doc fee, etc. The only fee that is legit is the acquisition fee which you will never get out of paying.
You truly do not have a clue about leasing or the relationship between a car's MSRP and what it should cost you. You want the quick and dirty? Here it is. So easy a caveman could do it(sorry caveman)
1. Take the MSRP x Residual rate= $Residual Value
2. Subtract Resid Value from the negotiated sale price, that = the amount you are borrowing.
3. Divide the amount borrowed by the term (I use 39mo) = base payment
4. Take (MSRP + Residual Value)x money factor = finance charge
5. Add # 3 and #4 and done you have your payment.
For example I just leased (today) a '10 OB premium w/ CVT & AWP for 39 mo @ 12k miles.
1. MSRP $26790x.51=$13,663
2. $23266-$13663=$9603 (sale price of $23266 reflects a $700 below invoice deal plus additional money down in this case, INVOICE WAS $25,610)
3. 9603/39= $246 per mo base
4. (26790+13663)x.0015= $60 per mo interest
5. BAM! - $306 per month base payment. (add MASS sales tax of .0625)
6. FINAL PAYMENT W/ Tax = $327.
Easy peasy, if you can't do this, you shouldn't lease a car b/c you will get screwed. Trust me, I was a sales manager for a dealership for 2 years and sold cars 3 years before that. Now I'm an accountant and I love to torture salesman!! What goes around comes around.
So if any of you are looking for a good deal, you better look hard b/c up here in the NE, inventory is super low, they have not been able recover the inventory levels since cash for clunkers, but you should expect to pay anywhere from $100 over invoice to $700 below. (that $700 is holdback - whole different discussion). With just fees down and no additional cap cost reduction(down payment) you can expect to pay near $400 per month to lease this car. Good luck people!
:shades:
It was nickr1 who said that:
http://townhall-talk.edmunds.com/direct/view/.ef9ddb4/259#MSG259
I've been trying to convince him that $200/month is way too low.
There is a $259 lease on the Forester right now, IIRC, but it's with a couple of grand down.
You might find a $199 lease on a compact car, like a Civic perhaps, but even then it'll be with some cash down and that's probably a low-end model (LX or VP).
$200 on a loaded Outback ain't happening unless you put half the cost in your down payment.
Over the phone quote, so didn't get all the details....
Its DMV only; First Month payment waived...
$369/Month
36 Months, 10k Miles ($15 more for 12K)
I had another dealer offer $415 for same terms, but he is looking to beat this...I hate this nonsense.....THhe $369 seems decent, but still a little high for my taste.
I got my OB for what they call "net net" meaning they "sold" me the car for invoice less hold-back, which is the true dealer net cost. So its all relative.
The short answer? You need more detail, but $369 doesn't sound terrible
Now I see in your post above you said:
For example I just leased (today) a '10 OB premium w/ CVT & AWP for 39 mo 12k miles.
1. MSRP $26790x.51=$13,663
2. $23266-$13663=$9603 (sale price of $23266 reflects a $700 below invoice deal plus additional money down in this case, INVOICE WAS $25,610)
3. 9603/39= $246 per mo base
4. (26790+13663)x.0015= $60 per mo interest
5. BAM! - $306 per month base payment. (add MASS sales tax of .0625)
6. FINAL PAYMENT W/ Tax = $327.
NOTE YOU SAID "PLUS ADDITIONAL MONEY DOWN" to get to $23,266. And you are wrong about the invoice price. A 2010 Outback PZEV Premium w/ All Weather Package MSRPs at $26,790 and carries an invoice price of $25,250. $24,714.20 would be the net net (invoice minus holdback). You can't count money down as part of your awesome deal. I could put $5,000 down on an Outback and come in here and tell everyone about my sweet $140 lease payment. Thanks for sharing.
MYTH BUSTED.
Can you post the current residual and MF rates for a '10 Outback Premium for 36 mo, 10K miles? It would be with CVT and AWP, if that matters. Many thanks!
The numbers for a '10 Outback 2.5i Premium are .00140 and 53%.
I haven't checked what Subaru's low-mileage adder is for residual values in a while, but the last time that I looked it was 1% for 12k leases.
Car_man
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Car_man
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I used to be in the business. I know how this stuff works, but thanks for your misinformed education. I'll try to answer each of your sarcastic questions.
What would be in it for them? Easy VOLUME. They move the unit off the lot which means they don't pay interest or any other costs associated with carrying inventory. If you sell 100 cars in a month and you make profit on 80 of them and you break even on 15 and maybe take a loss on 5 you are still profitable but you have reduced a huge amount of costs, and lastly big dealers usually are incentivised on many other levels - one of which is a volume bonus....next
DId you trade a car that they shanked you on? NO, They tried though, I shanked them. I got them to ACV the car at wholesale market value ($3500), but they tried like hell to give 1500 less than that and it didn't work.
Did you put down a heap of cash? No cash, $0 dollars - NO MONEY OUT OF POCKET, JUST THE TRADE
Did they give you that price then add $750 in "dealer fees"? NO, where do you come up with this stuff?
The cheapest I was offered by several HIGH volume dealers was $250 OVER invoice I know this isn't a question but it begs the comment "you suck at negotiating" sorry. I emailed one other dealer and right off the get go they were $150 below invoice. Also I live in New England, these cars are as common as a Dunkin Donuts, there is one on every corner.
Do you work at the dealership? Is your dad the sales manager? No & No. I left the car business as a sales manager in 2003. I don't buy cars from my "car" friends because I can get a better deal by being a hard-[non-permissible content removed] from people I don't know. My dad was in the hotel business what was yours? A [non-permissible content removed] negotiator? The apple doesn't fall far from the tree.
YOU SAID "PLUS ADDITIONAL MONEY DOWN" to get to $23,266 You really are offended by my good deal huh? I traded a $3500 car, what do you not understand? There is equity there ok? You pay fees, 1st payment etc. I'm not saying my payment was the good deal, I was saying the price of $700 below invoice was the good deal and I was trying to show you how to calculate a lease on a calculator.
So now that you may or may not understand things better, go back and read it again. Payment amount is no indication of a good deal based on your point of cash down, so don't go on my payment. For the first half of your post I actually thought you might know a thing or two, but when I read the rest - all bets were off. Oh and Invoice price can differ from region to region based on transportation fees and sometimes corporate advertising fees that get spread to the each invoice in that particular region but hey, I"m probably making this stuff up right? I'm mean I probably didn't READ THE INVOICE PRICE RIGHT OFF OF THE INVOICE HUH? No, why would I do that? Please man, send me some difficult questions would you?
NO MYTH - I have all the paper work to back up my post - all you have is pent up angst and some sort of wired notion that someone like me would come in here and spend 20 minutes on a post full of lies? My post was simply a small contribution to this forum to help you guys understand all the aspects and really how cheap you can buy the car. So if you want o get all huffy puffy over that... go right ahead.
No reason to get combative, anyway. The guy wasn't trying to rain on your parade, just get your numbers straight. There are plenty of people claiming they got a car five grand under invoice and there was cash in the glove compartment, but after brief examination they "forget" to add it was a price without any fees and trade price was already deducted (like it doesn't count) and they bought extended warranty with boat load of mop&glo stuff.
BTW, those dealer fees are real - in many states (like mine) it is common place to pay $600-800 "fee" (called documentation, delivery, whatever) on top of the price (that's why "price" often appears to be lower than it really is). Plus, the leases tend to have another one (called origination fee) charged by bank on top of whatever else (those go between $200 and $800). And that is even before the tax man and DMV take their cut.
Either way, enjoy your wheels. The fact you are happy is most important one.
2018 430i Gran Coupe
Duh, the price is $3000 higher than listed! Before fees, freight, and taxes, even.
Math skills are so bad in this country it's not even funny - especially when it comes to money. Then of course it is bankers/dealers/salesman fault. Of course. :sick:
2018 430i Gran Coupe
Thanks
I'm really confused as to how all my information has been so grossly misunderstood.
I TOTALLY AGREE WITH THOSE OF YOU WHO ARE SAYING THE TRADE IS CASH DOWN AND THAT IS HAS NOTHING TO DO WITH THE PRICE OF THE CAR.
Let me just say it ONE MORE TIME so we are clear. I fully understand that putting cash down on a car does NOT constitute a good deal. I was a sales manager of a car dealership, I understand how that works. I really, really do.
I've read complaints about poor math skills but it appears thats not the only problem here, looks like we need to brush up on reading comprehension and etiquette too (my self included, not calling any one out here).
I'm also a little disappointed that I joined this forum to gain and share information and really all I got are a comments that indicate that my posts were misinterpreted and I basically have been called a stupid liar (no in so many words).
You all may be better off on your own here
But since he is a quant, perhaps he can go trade distressed debt at GS and make a cool 8 figure income. Then he can go to the Bentley board and won't have to interact with us double digit IQ folk.
I'm not quite sure why putting equity down on a purchase to reduce the amount financed equate to being drilled? I negotiated the price to net, then put a trade down to cover the up front fees and the rest went to cap cost reduction to reduce the payment..not rocket surgery. Still not quite sure where the disconnect is.
Have you or the other guy that yelled at me get one of these cars yet? What did you pay?
Anyway, I truly apologize if I mislead anyone in my original post, it wasn't my intent. Good luck in you car leasing/buying affairs. Feel free to contact me privately if I can help out in anyway. Who knows we both might learn something.
..and I certainly would not be driving a Subaru if I was pulling in 8 figures. I'd have a 1997 Porsche 993 Turbo among other toys
The dealer simply moves money from one catagory to another. He may tell you he is giving you a sale price of $700 BELOW invoice but is actually just taking money from your trade and applying it to that. How much of your "down" went to making up for the supposed $700 UNDER invoice selling price? The only TRUE way to figure out if you got a good deal is to not put equity down in the first place. Likewise you can't count your final payment including sales tax because some states are less than 5% and some are 10%.
I will sell you my laptop for $1 if you put down $1499 but don't tell people you bought it for $1.
You have to leave the trade out of the deal until you agree on a price, thats exactly what we did. Then I spent 3 days fighting with them on the value of my trade because they WANTED to hose me on my trade. I'm not stupid enough to walk into a dealer and tell them right up front that I'm trading a car. THAT IS THE #1 DUMBEST THING YOU COULD EVER DO IN A CAR DEAL. I loved it when people offered me their trades on a silver platter like that. That is how you get screwed which is what you are trying to say happened to me, not the case.
Like I said before, If I mislead anyone by not including enough detail in my post then I apologize. I'll break it down for in another way.
MSRP was $26,790. Invoice was $25,610, then hold back is $768 so the net cost on the car is $24842. I paid $24,900. We went back and forth for 2 days before we agreed on that price. THEN I pulled the trade out and we fought hard about that for a few days. They really wanted to give only $2K for the trade to try and make up for the new car price, but in the end, I got what wanted. They used the equity in the trade for all the up front fees (just like cash), then the remaining equity went as cash down on the lease to reduce the payment (just like cash). IF I HAD NOT USED THE EQUITY FOR ADDITIONAL CASH DOWN, THEY WOULD HAVE CUT ME A CHECK BACK. We did it all the time when I was in the biz. Someone would trade a $10K car on a lease but only want to put $2k down, we'd cut them a check for the $8K no problem.
Does this make any more sense now? Because if it doesn't, I don't know what to tell you other than I'd love to sell you a car.
I guess selling 100's of cars as a former sales manger still doesn't qualify me to understand how to BUY a car does it? But what do I know right? you guys know it all.
Its a shame that so much critical communication gets lost when people communicate via email, forums blogs etc. This never would have happened if we had spoken in person.
Next...
:P
Just a few questions:
1. How does the dealer pay the rent, electricity, employee salaries, employee benefits, other utilities when they are making $58 on a deal?
2. How does the salesman make a living when he gets $6 commission from selling you a car?
3. Did a spaceship land before or after you closed this deal? Either way would leave as much credibility to your story.
4. As I stated before, did they give it to you for $24842 then add $750 in dealer fees?
5. ACTUAL invoice is $25,250 NOT the $25,610 you are claiming so really they made $127.80 over net not the $58 over net you are saying. Hold back is not $768 it is ACTUALLY $535.80. Where are you getting your numbers?
If you expect anyone to believe your story please post the name of the dealer and salesman that gave you this deal and also scan the actual original copy of your lease agreement and email it to me. It just doesn't make any sense that everyone else is lucky to get invoice pricing and you paid $58 over actual dealer cost on a vehicle that has no rebates and is in very limited supply.
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Thanks!
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Thanks!!
If there is a way for me to look these up, I'll gladly do the legwork...
Also, I've heard of Subaru discounts through Costco & IMBA...anyone know of any other good ones?
Car_man
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The numbers for an otherwise identical 39 month lease are .00150 and 50%. The numbers for a 42 month lease are .00165 and 48%.
You definitely don't want to lease this car for 48 months. Subaru isn't providing support on four year leases right now.
I believe that its residual values for leases with only 12,000 miles per year are 1% higher.
Car_man
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