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Discussion Starter #1
Starting a new thread on this, seems like the "MSRP/Invoice/Purchase Price/Extended warranty thread" is not the right place, we got a bit off topic there.

What's the MSRP on the car?
2020 Subaru Outback 2.5i Premium?
How many miles are you looking for 10k?
MSRP is $32,420
Negotiated sale price is 28,850
2.5i Premium
10k miles or 12k miles

The actual miles driven will not impact the original contract, and will not change the final purchase price, correct?

Question for @3Series : what should I aim for in terms of down payment ($0 is my guess), monthly payment for 36 months and purchase price at lease end?
Let's not include taxes and fees.
I do have a total of $1,000 in coupons.

Thanks for anybody's help!
 

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Go here and ask for the residual value and money factor for your zip code for your desired trim and months/miles: 2020 Subaru Outback Lease Deals and Prices.

Go online to get an email 'sale price' quote from a dealer (I use Grand Subaru, as they had been quoting around 12-12.8% off MSRP).

Use an online lease calculator to get a rough estimate of what your payments should be with those 3 pieces of info. That should be your starting point in negotiated prices. Note that the 'sale price' should be negotiated before you bring up the lease or coupons at all. Your mileage only affects that residual value figure (usually going 10 to 12 to 15k per year reduces residual by 2-3% each jump).

From my research it seemed like the Limited XT was the best bang for the buck because of the highest residual value for my zip code, but mileage may vary.
 

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Discussion Starter #3
Is the residual value the same as the price that I will pay if I buy the car at the end of the lease?
If so, then I would want that to be as low as possible if it does not affect the monthly payment or down payment, no?!?
 

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First part, roughly yes (could be some nuance depending on how the lease is written).

Second part, no. In the most simplistic explanation, in a lease you only pay for what you use. That is, the difference between the price now and what the leasing company thinks the value will be at the end of X months given Y miles. Not factoring in the APR/money factor here, the higher a residual value % is, the lower your payments will be, since that 'between' amount is less.

I went down the rabbit hole to learn all this in the last few months as I was considering leasing. There's a lot to look into if you really want to get a decent deal on a lease. I recommend looking at Edmunds, leasehackr, multiple online lease calculators, and this forum to really dive into what makes up a good lease. On the scale of lease deals, Subarus often are considered poor because of low incentives. However they can still be a better deal than financing, even over the course of 2 or more consecutive leases.
 

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Discussion Starter #5 (Edited)
First part, roughly yes (could be some nuance depending on how the lease is written).

Second part, no. In the most simplistic explanation, in a lease you only pay for what you use. That is, the difference between the price now and what the leasing company thinks the value will be at the end of X months given Y miles. Not factoring in the APR/money factor here, the higher a residual value % is, the lower your payments will be, since that 'between' amount is less.

I went down the rabbit hole to learn all this in the last few months as I was considering leasing. There's a lot to look into if you really want to get a decent deal on a lease. I recommend looking at Edmunds, leasehackr, multiple online lease calculators, and this forum to really dive into what makes up a good lease. On the scale of lease deals, Subarus often are considered poor because of low incentives. However they can still be a better deal than financing, even over the course of 2 or more consecutive leases.
Thanks for the clarification, makes sense.
At this point, I am only looking at leases with the assumption that I will buy the vehicle at the end of the lease term.
My plan is to go ahead and the lease if:
(lease down payment + sum of all monthly payments + lease end purchase price) < (total cash price)

Does that make sense?
Edit: as I am doing more research, achieving this may not be possible.
 

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2018 Outbacks, Grey Premium & Silver Limited
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Go here and ask for the residual value and money factor for your zip code for your desired trim and months/miles: 2020 Subaru Outback Lease Deals and
Prices.
I can already see some issues with what you linked what would contribute to a reader being misinformed. Lease rates are regional and change by month. This person giving out information might have access to their own region's information but not other regional information and even if they did ALL of this information is confidential and if they are a Subaru employee they could have their employment terminated as a result.

I saw one poster express frustration over a small variation in a payment given by an actual dealership that had written a deal out and what this anonymous person sharing confidential information stated. This is the kind of stuff that makes me wonder:

1. Why potential car buyers get so upset over nickel and dime stuff? Very small amounts of money we're talking about here.

2. Why anyone who could legitimately expose confidential information would in fact do so when in fact they stand to gain absolutely nothing?

For the record I would like to state that I do not trust this as being a legitimate source of information. I have seen too much of this internet car buying expert BS over the years as well as stuff from people who want to act like exposing confidential information is some charitable deed when the reality is that what they are sharing is probably not even accurate.
 

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I did the math for leasing a few times and came up NO way. I worked with someone that leased a BMW and when the lease was up he hated it. I later read CR about leasing vehicles and the nail was put in the lease coffin. Best I can suggest is to throw out the emotion and look at the data by building a spreadsheet if you are inclined.
 

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Discussion Starter #8
I did the math for leasing a few times and came up NO way. I worked with someone that leased a BMW and when the lease was up he hated it. I later read CR about leasing vehicles and the nail was put in the lease coffin. Best I can suggest is to throw out the emotion and look at the data by building a spreadsheet if you are inclined.
Working on it. :)
 

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The problem I've seen with leasing is that most folks who should lease, don't and those who (absolutely) shouldn't, do.
If your the type of person who keeps a car imaculate, drives only a little and wants a new car regularly ( like many retired / empty nest buyers), then leasing MAY work for you.
If you have a tribe of kids/ pets that will be testing your interior and /or if you drive an unpredictable number of miles every year and/or are prone to get your share of body dings/damage within a few years of normal use. It likely is not a good choice.
Dealers love to lease as they are gauranteed to get you back in their showroom at lease end. When you come back, they have leverage over you since they will surely sight ANYTHING that they can sight as outside the agreement terms. (ie. excess mileage, worn tires, bumper dings, scratchs, wear/tear, that koolaid stain, the roof ding from your kayak....) Don't have the $X,000 you need to turn the car in? No fear as they will all offer to waive it /or roll it into the new payment on a new lease ( at their terms and usually on a higher priced vehicle.) I have several friends who started leasing some years back in order to get more car for their dollar. None of them should have been leasing as they drive too much and are otherwise hard on their vehicles. Every one of them are now stuck in an endless cycle of leasing from the same dealer for 3, 4 even 5 cycles now. Every one of them is now putting out $700 +/month to lease a new car ( or re-lease their old one).
My advice would be to do an honest assesment of where you sit in the above criteria. IF you decide to lease, be sure to negotiate your end lease buy back price before you buy. That may be your only way out.
As an alternitive you might consider a conventional buy with a ballon payment at the end of 4 years or so. This will give you lower initial payments with one large buy out payment at the end . The terms for the buyout ballon payment can be done up front. ( Ideally, your allowed to refinance the ballon payment at the same rate.) I did a Ballon loan on a SUV once. It worked out well as it kept my payments low without be being obligated to the dealer ever again. When the ballon was due, I had the option to keep/refinance or trade/sell it anywhere I saw fit at a fair price.
 

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Thanks for the clarification, makes sense.
At this point, I am only looking at leases with the assumption that I will buy the vehicle at the end of the lease term.
My plan is to go ahead and the lease if:
(lease down payment + sum of all monthly payments + lease end purchase price) < (total cash price)

Does that make sense?
Edit: as I am doing more research, achieving this may not be possible.
I looked into leasing a Subaru a few years ago when I was looking at having 2 new payments for a couple years. Unless Subaru is offering a lease incentives which I can’t remember them doing anytime recently, It’s going to be a little more expensive to lease vs buy. You have the acquisition fee and the money factor interest rate is usually higher than purchase APR plus one usually ends up with a longer payment (lease payment plus loan payments) which results in more interest.
 

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Discussion Starter #11
The problem I've seen with leasing is that most folks who should lease, don't and those who (absolutely) shouldn't, do.
If your the type of person who keeps a car imaculate, drives only a little and wants a new car regularly ( like many retired / empty nest buyers), then leasing MAY work for you.
If you have a tribe of kids/ pets that will be testing your interior and /or if you drive an unpredictable number of miles every year and/or are prone to get your share of body dings/damage within a few years of normal use. It likely is not a good choice.
Dealers love to lease as they are gauranteed to get you back in their showroom at lease end. When you come back, they have leverage over you since they will surely sight ANYTHING that they can sight as outside the agreement terms. (ie. excess mileage, worn tires, bumper dings, scratchs, wear/tear, that koolaid stain, the roof ding from your kayak....) Don't have the $X,000 you need to turn the car in? No fear as they will all offer to waive it /or roll it into the new payment on a new lease ( at their terms and usually on a higher priced vehicle.) I have several friends who started leasing some years back in order to get more car for their dollar. None of them should have been leasign as they drive too much and are otherwise hard on their vehicles. Every one of them are now stuck in and endless cycle of leasing from the same dealer for 3, 4 even 5 cycles now. Every one of them is now puttign out $700 +/month to lease a new car ( or release their old one).
My advice would be to do an honest assesment of where you sit in the above criteria. IF you decide to lease, be sure to negotiate your end lease buy back price before you buy. That may be your only way out.
As an alternitive you migth consider a conventional buy with a ballon payment at the end of 4 years or so. This will give you lower initial payments with one large buy out payment at the end . The terms for the buyout ballon payment can usually be done up front. ( Ideally your allowed to refinance the ballon payment at the same rate.) I did a Ballon loan on a SUV once. It worked out well as it kept my payments low without be being obligated to the dealer ever again. When the Ballon was due, I had the option to keep/refinance or trade/sell it anywhere I saw fit at a fair price.
Thanks for all the responses!

All I am trying to achieve is to minimize the overall cost. It's a worthwhile exercise, I am educating myself on the details of leasing - never looked into it before. It does not hurt to widen your horizon.

RocketMan, I don't think I'll run into any of the negative issues you mentioned above. I could pay cash for the car, but I prefer to keep the money invested and collect the returns. I have always done it that way, and it has worked out well over time.
 

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I can already see some issues with what you linked what would contribute to a reader being misinformed. Lease rates are regional and change by month. This person giving out information might have access to their own region's information but not other regional information and even if they did ALL of this information is confidential and if they are a Subaru employee they could have their employment terminated as a result.

I saw one poster express frustration over a small variation in a payment given by an actual dealership that had written a deal out and what this anonymous person sharing confidential information stated. This is the kind of stuff that makes me wonder:

1. Why potential car buyers get so upset over nickel and dime stuff? Very small amounts of money we're talking about here.

2. Why anyone who could legitimately expose confidential information would in fact do so when in fact they stand to gain absolutely nothing?

For the record I would like to state that I do not trust this as being a legitimate source of information. I have seen too much of this internet car buying expert BS over the years as well as stuff from people who want to act like exposing confidential information is some charitable deed when the reality is that what they are sharing is probably not even accurate.
The rv and MFs provided in that thread are 100% accurate and confirmed by dealers in those zip codes. It is not confidential information in any way, heck it will be shown on your lease write up. On top of that, the residual cannot actually be modified in any way and is 100% set by the lessor for a zip code. Dealers can mark up the MF but there's a limit on that as well. Those edmunds forums are the most known and accurate place to get those two pieces of information.

Dealers mark up MF, add fees to your adj gross cap, and you can pay out the nose. I was consistently quoted 50-60 per month over what I should have been with the correct base MF after getting their base sale price of 11-12% off MSRP. I called two dealers out on it by saying I know the MF for my zip code, so let me see your adjusted cap cost figure then to prove why my monthly was so high. Both cut the shenanigans and quoted me what I calculated before hand within pennies. One marked up the mf and the other siad they'd waive a prep fee of $800 that came out of nowhere.

An uneducated consumer would have been fleeced, it pays to take the time to understand how leases work and be armed with info. Agree with you on the crazy leasehackr deals and crap on BMWs etc, I just used the Calc and some articles as legit education.
 

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I actually don't condone leasing Subarus either; due to the lack of incentives your adjusted cap cost isn't low enough to get you a payment that competes competitively with financing, regardless of their MF (when both options are compared long term over 6 or more years). Although the Limited XT in my area has a high enough residual that with a loyalty coupon it is worth considering, which I had been recently.
 

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"All I am trying to achieve is to minimize the overall cost."
Then buy the car not rent it...
 

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Thanks for all the responses!

All I am trying to achieve is to minimize the overall cost. It's a worthwhile exercise, I am educating myself on the details of leasing - never looked into it before. It does not hurt to widen your horizon.

RocketMan, I don't think I'll run into any of the negative issues you mentioned above. I could pay cash for the car, but I prefer to keep the money invested and collect the returns. I have always done it that way, and it has worked out well over time.
Running the numbers and weighing alternitives is a smart thing. Like you, I considered paying cash but that would mean i'd have to pay (considerable) income tax on the money I pulled from my retirement savings. It would also mean I'd be loosing the 5-8% return I've been enjoying on it. With most banks offering less than 3% on auto loans, financing the purchase was the smart thing to do in my case. Just made my first payment last week . 59 more and it's mine :eek:
 

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Discussion Starter #16
I have started a spreadsheet with the MF and residual from the Edmunds site, and using the leasehack calculator.

I am only looking at the scenario where I buy the car at the end of the lease.
Using the leasehackr calc and the inputs MF and residual, I am getting total cost numbers that are around $750 - $780 above the total sales price, no matter how many miles I enter (and that makes sense, I think). I am keeping taxes and fees separate for this exercise.
By "total cost" I mean: sum of monthly payments + down payment + residual value (the cost to buy the car at the lease end).
The finance cost over 4 years at 0.9% is $591, that's $200 less than the leasing-and-buying number. Not all that much of a difference, but buying would be the easier thing to do in that case.
Leasing has the advantage of leaving me with more options (walking away after 3 years if I don't like the car for whatever reason).
 

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Discussion Starter #17
Running the numbers and weighing alternitives is a smart thing. Like you, I considered paying cash but that would mean i'd have to pay (considerable) income tax on the money I pulled from my retirement savings. It would also mean I'd be loosing the 5-8% return I've been enjoying on it. With most banks offering less than 3% on auto loans, financing the purchase was the smart thing to do in my case. Just amde my first payment last week . 59 more and it's mine :eek:
I am with you on this, we are in the same boat. :)
I like educating myself about financial topics, it's kind of a hobby for me. As a result, I like going for the best deals.
 

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I have started a spreadsheet with the MF and residual from the Edmunds site, and using the leasehack calculator.

I am only looking at the scenario where I buy the car at the end of the lease.
Using the leasehackr calc and the inputs MF and residual, I am getting total cost numbers that are around $750 - $780 above the total sales price, no matter how many miles I enter (and that makes sense, I think). I am keeping taxes and fees separate for this exercise.
By "total cost" I mean: sum of monthly payments + down payment + residual value (the cost to buy the car at the lease end).
The finance cost over 4 years at 0.9% is $591, that's $200 less than the leasing-and-buying number. Not all that much of a difference, but buying would be the easier thing to do in that case.
Leasing has the advantage of leaving me with more options (walking away after 3 years if I don't like the car for whatever reason).
Thus confirming the Subaru buyer and spreadsheets stereotype :p
 

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The rv and MFs provided in that thread are 100% accurate and confirmed by dealers in those zip codes. It is not confidential information in any way, heck it will be shown on your lease write up. On top of that, the residual cannot actually be modified in any way and is 100% set by the lessor for a zip code. Dealers can mark up the MF but there's a limit on that as well. Those edmunds forums are the most known and accurate place to get those two pieces of information.

Dealers mark up MF, add fees to your adj gross cap, and you can pay out the nose. I was consistently quoted 50-60 per month over what I should have been with the correct base MF after getting their base sale price of 11-12% off MSRP. I called two dealers out on it by saying I know the MF for my zip code, so let me see your adjusted cap cost figure then to prove why my monthly was so high. Both cut the shenanigans and quoted me what I calculated before hand within pennies. One marked up the mf and the other siad they'd waive a prep fee of $800 that came out of nowhere.

An uneducated consumer would have been fleeced, it pays to take the time to understand how leases work and be armed with info. Agree with you on the crazy leasehackr deals and crap on BMWs etc, I just used the Calc and some articles as legit education.
First off, how can YOU confirm that all of the information is 100% accurate?

Ultimately my issue has to do with the fact of why should anyone who would legitimately have access to such information divulge it if they stand to gain nothing from it? And I am not aware of any dealerships anywhere that openly divulge such information because again it is not in their interest to do so.

And yes it is confidential information, I have worked for Subaru in recent years and had access to such information. It is clearly written alongside this information when it is disseminated every month that it is for dealership personnel only. Now if there are people who are outing this information that is another story but again how would the person divulging the information benefit?

Furthermore when people receiving the information state that it is inaccurate who are we to believe? The allure of having access to exclusive information can get those divulging said info attention they may be seeking and make those on the receiving end feel like they are special.

Where we get into trouble is when unrealistic expectations are created, I have had no shortage of people get upset with me in business or online when I burst their bubble over crap they have read online or influenced by otherwise. "But so and so in Alabama is selling a $40,000 vehicle for $20,000 so you should to!" Or how about someone that gets a good old fashioned BSing online and they bring it to me to deal with. And it is ALWAYS the person who has to burst their bubble who is the lying, cheating, stealing bad guy because they just refuse to do what I have been erroneously lead to believe otherwise.

And you know what, not one single business need meet any customers demands. There has to be mutual agreement for business to occur.
 
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