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Lease residual quote

BrShootrBrShootr Member Posts: 2
edited May 2019 in Subaru
First, thanks everyone for all the info available on the forum. I have a specific question that I was not able to find the answer to: what is my risk if I get a lease that has too high of a residual?

I am getting quotes for a 2019 Ascent 7 Passenger Touring, option 12, with 34,400 OTD sale price, MF of .00115, and residual of around $25k. 3 years, 12,000mi/year.

That residual seems high to me. So, what am I risking if I get a residual that ends up being too high for the actual car's value at the end of the 3 year term?
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    MichaellMichaell Moderator Posts: 241,319
    BrShootr said:

    First, thanks everyone for all the info available on the forum. I have a specific question that I was not able to find the answer to: what is my risk if I get a lease that has too high of a residual?

    I am getting quotes for a 2019 Ascent 7 Passenger Touring, option 12, with 34,400 OTD sale price, MF of .00115, and residual of around $25k. 3 years, 12,000mi/year.

    That residual seems high to me. So, what am I risking if I get a residual that ends up being too high for the actual car's value at the end of the 3 year term?

    You actually want a high resiudal, as that makes for a lower lease payment.

    You don't care about the value at the end of the lease - you're going to turn it in when you're done.

    Oh? You want to buy the car at lease's end?

    Then don't lease to begin with - just buy the car up front, and avoid the extra lease specific costs.

    A high residual at lease end is bad news if you want to buy the car, as you will pay over market value for a 3 year old used car. And, you'll be financing with a used car interest rate - which nobody will be able to predict for 3 years from now.

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    BrShootrBrShootr Member Posts: 2
    That seems about right. I just wanted to make sure I was not going to end up with a surprise at lease’s end if the residual was too high for the value of the car at that point in time.

    Thanks!
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    kyfdxkyfdx Moderator Posts: 237,228
    BrShootr said:

    That seems about right. I just wanted to make sure I was not going to end up with a surprise at lease’s end if the residual was too high for the value of the car at that point in time.

    Thanks!

    It might be.... but, that's what makes a great lease deal. The car depreciates more than you actually pay for.

    If your goal is to buy the car, then don't lease it first.

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