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Your Thoughts on my Lease Agreement

7K views 26 replies 9 participants last post by  SandroPaling 
#1 ·
I thought it would be interesting to see others Lease numbers and compare. This was my first time leasing and I've learned a lot from the experience. Mostly to avoid giving such a large down payment since it does not affect the payments as much as when you finance. I didn't know this information as well as other tips I've learned after the fact. You live and learn. I feel like my monthly payment is on the high side. The 36 month maintenance plan only added about $25 a month to the payment.
My 'money factor' is about 4.3% interest rate. I thought that would be lower since my credit score is over 800. Let me know what you all see here and think. It will be helpful the next time around.
 

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#2 ·
I really can't comment on your lease payment/plan since I've never leased a car in my life, but that's because I put way too many miles on my vehicles to ever justify it. I can compare my purchase amount paid after 36 months to yours up in box #8 (top right of your agreement):

At the end of my 36 months, I'll have paid $14,371 on my Impreza (monthly payments + down payment)
At the end of your 36 months, you'll have paid $12,490 (monthly lease payments + $2500 down)

My loan was 1.9% financing @ 5 years, so mine won't be paid off completely at 36 months.
 
#3 ·
You're paying full price (MSRP) on the lease. You should be able to get at least 10% off, possibly more, which translates to around $75/mo. Go to the forums at Edmunds, 2019 Subaru Impreza Lease Deals and Prices and inquire about Money Factor. It should be around 1.8% on the Premium or Sport trim. Do not put any "down payment" on a lease, I always try to roll everything in to the lease, unless the money factor is high. Maintenance plan is a waste, why spend $900 for at most 6 oil changes?
 
#4 ·
I leased my Sport 5dr w/ Popular Package 2 last November. I didn't feel like making monthly payments so I found a dealer that would do a one-pay. After working them down to $21,700, they based the lease off of that and my total for 36mos. came to $8712 which averages out to $242/mo.
 
#6 ·
Subaru's have more than oil changes in their maintenance plan. For me its better to pay it ahead then worry about if I have the money when it comes up. For leases you have to do all the scheduled maintenance to the car you can't just pick and choose what you want.
 
#8 · (Edited)
Since I have leased many vehicles, and currently have 3 that are leases I will offer my advice.

If leasing you ALWAYS ALWAYS ALWAYS negotiate the MSRP down. NEVER pay full MSRP if you are leasing. If your credit is Tier 1 or Top Tier you should not be over 3% interest, unless the leasing company isn't really trying to lease and pushing financing.

Your payment isn't too bad, but you always want to put as less money down as possible. Anytime you lease and give them a "downpayment" you are basically throwing away that money. In our state if you lease a car, GAP insurance is factored in. so if you total the car/truck, your lease is wiped clean. If you had put money down on it, you lost every dime you put down. we made this mistake, once. only once!

I honestly think the residual is ok. I don't think it would be worth that if you tried to trade it in in 3 years but retail on it may be close that. when we traded our 2017 Impreza Sport last August, I fought tooth and nail to get $17,500 trade in. and ours was immaculate with aftermarket wheels, tinted windows and the Subaru roof rack with every option you could get on the 17's.

on a lease, never buy into maintenance or wheel/tire packages or any of that dealer/manufacturer add on mess. again, it is throwing money down a bottomless hole. sure, you get a couple oil changes and filter changes but that is really about it. unless you plan to buy the car after the lease, I just wouldn't do it.

there are several other things to think about as well. turn in at lease end versus trade in a few weeks/months early? buy at the end of the lease?

For us, leasing makes perfect sense. we trade cars way to often (about every 2 years) to finance. with leasing we are forcing ourselves to keep them a lil while longer, but still getting new cars frequently.
 
#9 ·
so after looking a little more at your "deal" you DO NOT want to buy this car at the lease end. your residual is ok but for what your payments and down payment are, you will have paid over $27K for a car that you could buy for about $23k.

you should try to stay around 1% of MSRP for your payment. most, if not all manufacturers know this, so they will negotiate if you really want to lease.

a lot of people lease because they want a lower payment. but when leasing you really have to pay attention to ALL the numbers. and if anyway possible, keep your money in your pockets!

hope this helps for the future, or anyone else considering leasing.
 
#10 ·
Thanks both for the input. It's definitely been a lesson in leasing. I wish I understood more of how it all worked. I was in a tough spot to get a new car with 5 days left on my rental. I had totaled my car. I didn't have much time to research and I wish I had it. I was so accustomed to put a down payment down and now just realizing how uneducated I was in the process. Why did you have to fight for the $17.5? When you go trade in a lease is it the same as a regular financed car where you are trying to get the most possible or are you locked into the price that is set on the paperwork? Where it says when its time to turn in or buy its worth xx amount?
What are the pros/cons of trading in early?
 
#14 · (Edited)
Leasing 101

There are only couple of things you need to know
  1. Residual Value (RV) - What the car is worth at the end of lease term
  2. Money Factor (MF) - Finance charge for leasing (equivalent to APR)
  3. MSRP
  4. Purchase Price
  5. Incentives

Basically your payment is determined by the difference between the Purchase Price and the Residual Value, multiplied by the Money Factor. You can't do anything about the RV, it's set by the bank, and it's a percentage of the MSRP. Money Factor is also determined by the bank, but dealers can mark them up so you have to find out what the dealer is actually paying.

What makes leasing work is when the RV is set high, and/or purchase price is discounted from the MSRP. You also need to find out if there are any incentives manufacturers are offering, either to you or to the dealers, that will lower your effective purchase price.
 
#11 ·
As you know the Impreza is basically Subaru's eco model. meaning it's cheapest, so it holds literally the less trade in value. our car was 21 months old, with 23K miles on it when we traded. trade value is NEVER what you think it should be. and most dealers won't even get close to KBB trade in value. at least not in our area. there are some that will, but you usually have to be buying/leasing a much more expensive vehicle. KBB had our trade value between $16,600-18,300. They started at $16K hoping I would take it. nope. I made them get closer to the high side or I threatened to leave and go elsewhere. they came back with $17,500. so we did the deal.

trading a leased car is somewhat like trading a financed one. you have to call to get an ACTUAL payoff. it is not just what you owe on the lease. it is typically your residual plus any lease amount left. you are not locked into the price on the paperwork as far as trade value goes. you always want the most you can get. because if they offer less than your "payoff", you will have to roll over negative equity into your new car.

in your case, I don't think trading in early will be a good option for you. your residual is higher than what I would think the trade in value would be in 3 years. I am basing that solely off of my own experience with the same car. you can always try to dump it early and get into something else. but you may be better to turn it in and walk away. but doing that you will be on the hook for a $300 turn in fee. so keep that in mind. also, I didn't see how many miles you were allowed each year but I would assume 12K a year for a total of 36k? if you go over that and turn the car in at the end of the lease you will have to pay whatever cost per mile you agreed to in the contract. it is usually $.25 or $.15 a mile. so if you drive a lot, leasing isn't a good option for you.

leases aren't hard to understand, they just take some time to get used to. the first time I ever leased a car I worried myself sick every day thinking to myself, "what have I done?". but in the grand scheme of my personal life, leasing is a great option for us. we like new vehicles, a lot. my wife and I have financed/leased/owned about 36 different vehicles in 17 years of marriage. yes, we know, it is a bunch of "wasted money" but we aren't hurting for anything and we enjoy what we do. so we are blessed. all 3 of our vehicles now are leases actually. we have 2 different Lexus models and our Daughter has a Jeep Cherokee Trailhawk. I can honestly say I don't think we will ever pay off a car. we don't mind car payments, so they keep making em and we will keep buying em, lol.
 
#12 ·
I live in Asheville where everyone literally drives an Subaru. They are insanely popular here. When it comes to trade where do I go look for the actual payoff amount?
I think my next car I will finance I didn't realize how restricted I would feel in a lease due to the milage. I like to drive to ATL to visit friends. Or next go with a higher yearly milage option. Though I've heard when you go for higher of that your lease will go up.
 
#16 ·
2 of our leases are for 12K miles a year and I up'd mine to 15K miles a year because I do drive more than my wife and daughter. I think my payment was about $15 more a month for the extra mileage.

you can call your leasing company and get a payoff when it's time to think about trading. they will be able to provide that info.
 
#19 ·
humm. I leased my 2017. I don't think I got screwed but I know am basically tossing money away. What sold me was the buyout price for the sport with out eyesite. I put my 5k down, yes wasteful but that brought my payments to 163 a month. I got the tire package because of NY roadways and pot holes. That added another 10 bucks a month to the price. For me it was affordable for a brand new car. First for me in 22 years of driving. After the lease is up I will most likely buy it as the buy out price is 14K and that will get my payments below 200 again with a few K's down on the finance. I got a low mileage lease (even though I work 12 miles round trip a day to work) but as with any new car you drive the darn thing, so my .15 a mile will probably be around 300 bucks worth of penalties. A mad oak tree dented the roof a bit with it's acorns, I gashed 1 rim pulling out of an ATM apron (doh!). To mitigate extra penalty fees along with that 300 dollar release fee I will finance at the end.

I got it for affordability, gas, good safety and sanity. Yes I am paying more but I don't have any worries. I typically drive my cars into the ground.
 
#22 · (Edited)
so you put down $5k and your payments of $163 a month for I assume 36 months is a minimum total cost of $10,868 of actual money you will spend to drive this car for the lease term. Upon lease end you have an option to purchase for $14K. but that will not include dealer fees or taxes, so you will likely be closer to $15k. to get you close to a $200 a month payment you will have to finance for at least 5 more years AND put a minimum of $3000 more down. if you have perfect credit on a used car your interest rate will likely be close to 2-3.9%. so your actual payments would be a lil more than $200 a month. so all in all you will be paying over $25k for this car and making payments for about 8 years.

if you have disposable money to put down at lease end, I would seriously consider turning it in and walking away. unless you just love the car. your turn in fees plus mileage and wear and tear would likely be close to $1000. pay that and put $2k down on a nice(r) used/new car and drive. but, if you love the car you have now, by all means buy it and enjoy it. at the end of the day it is your money and not anyone else's. I just have never liked a car enough to pay for it for that long.
 
#20 ·
I will probably trade my in for sure. I wanted a manual with eyesight but Subaru doesn't have models with both. After 25 yrs of driving stick I will most likely give in and get auto with paddle shifters. Blind spot monitoring is the feature I want the most. If I had it in my last car I probably wouldn't have wrecked. Forester is the car I'm looking at next or maybe another Impreza sport. We will see.
 
#21 ·
if I am not mistaken I believe Subaru is (or has) doing away with manual transmissions except in the WRX and BRZ. so getting a manual in the future will be out of the question if you stick with Subaru. Subaru has never made a manual with eyesight to my knowledge. our 17 Impreza Sport had eyesight and I absolutely hated it. that is one feature on a vehicle I do not need or want. some people like it, I don't. our 2 Lexus' have something similar and I am not a fan of those either, but it isn't an "option" like eyesight. you buy a Lexus and you are stuck with it.
 
#25 ·
We paid around 22k OTD for a non eyesight sport from the dealer with 4K and change on it. And it was also certified. So better warranty.

Look around. You can find a better deal than leasing. Especially while Interest rates are still fairly low.

And our dealer gave us kbb good condition trade in value after some haggling on our last car.


Sent from my iPhone using Tapatalk
 
#27 · (Edited)
On the wave of the popularity of carsharing, car manufacturers are launching services for long-term rental of their cars. The first was Volvo, whose XC60 crossover became available on a subscription basis in June. And in the year's second half, a similar service will be offered by Hyundai. Other carmakers in our country have not yet announced plans to launch services for long-term car rental, but it is clearly only a matter of time. But still, I think that the personal car is, in any case, more popular than other forms of car use. As for long-term leasing, this service should be seen more as a marketing ploy, which, among other things, provides an opportunity to generate income. I have already thought more than once about developing such a business. I even went to Mortgage Broker Basingstoke for advice.
 
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