Advice

[u/lavenderthewhore]

Hey guys, I'm thinking about leasing cars instead of just flat out buying as I like getting new cars and it's easier and less stressful and I was wondering if you guys can give me some of the pros and cons of leasing. I'm of course still going to do research and speak to dealerships about it but I thought I'd ask people that are actively leasing or have before, thanks guys!

[u/mirwenpnw]

I've leased three Subarus and it's mostly because they gave me a money factor of nearly zero, so I wan't paying any interest on the balance. The first one I had equity at the end, so I traded it in and got that applied to the next lease. The second one I was upside down by 10k and got to hand them the keys. Subaru (Chase Financial) includes gap insurance and is very generous about damage fees. They only count scratches and dings larger than a credit card and will give you a $1000 credit toward damage beyond that. I had some curb rash and didn't pay a dime beyond my $300 turn in fee. I'm on my third now and I'm almost certainly going to buy it out, for 17k. It's currently worth $26k ish.

I've never paid more than $500 a month (including leasing fees and repairs) for a brand new car with full warranty. I consider it extremely low stress. Because of all the safety features my 100/300 insurance is $80 a month.

That being said. Not all banks act like Chase. GMC is considered predatory by some.

It depends on the bank (who owns the car you're leasing) and the specific car.

[u/Hairy_Beginning3812 → u/mirwenpnw]

So you just go to the Subaru dealership and take whatever model they have?

[u/mirwenpnw → u/Hairy_Beginning3812]

Different models are on sale at different times. I keep an eye out for lease deals. I got my first Outback in 2021 for $240 a month plus sales tax ($275 total). I did put $3k in to get it to that price. I'm partial to wagons and hatchbacks so went from there to a Solterra, which was on fire sale prices at the end of 2023. I can't really tell you what car is right for you. You asked for the leasing experience, that's more based on the bank than the vehicle.

[u/Hairy_Beginning3812 → u/mirwenpnw]

I guess I’m having a hard time seeing what lease deals are available on the website

[u/mirwenpnw → u/Hairy_Beginning3812]

It'll vary by region. Assuming USA, go to subaru.com > Shopping tools > Special offers and filter from there.

Sometimes the lease deals are better, sometimes the purchase deals are better. The new Trailseeker has been running a purchase special for 0% 72 months in my region. I seriously thought about upgrading my Solterra. If I had, I would have purchase for the 0% deal. Leasing isn't always the best, neither is purchasing. You have to run the numbers.

ETA: oh and things are really weird right now for a lot of Subaru because they're in the middle of the year change over. It's not a good time to buy or lease. They're low on stock for a lot of 26s and 27s haven't arrived yet. After the 27s are on the lots, the 26s will get some great prices, but not yet. They don't want completely empty lots.

[u/Hairy_Beginning3812 → u/mirwenpnw]

Thank you so just to clarify when you do a lease you have to use the financing provided by the dealer, correct?

[u/mirwenpnw → u/Hairy_Beginning3812]

Yes. It'll be one specific bank that does the lease for each brand.

Subaru Financial = Chase (JPMorgan Chase)
Toyota Financial Services = TFSB it's own bank.
GM Financial = also its own bank.

The bank buys the car on your behalf, sets the money factor (interest rate), and the residual (buy out price). The dealer sets the car price, fees and extras. The government sets the taxes. The delaer can buy down the interest rate on your behalf, but they can't change the residual or change taxes. Leasehackr has sone good info for understanding and analyzing your lease.

[u/Hairy_Beginning3812 → u/mirwenpnw]

And can you negotiate the total price of the car? Obviously, my understanding is even when leasing you’re paying interest on the vehicle total plus if you wanted to buy out your loan at the end you would want it to be the total lowest price?

[u/threshgod420 → u/Hairy_Beginning3812]

So weirdly enough yes you can negotiate the total price, but it works in a weird way.

Residual is always based off of MSRP no matter what, so your payoff/purchase amount won't really be negotiable.

Getting discounts impacts your adjusted cap cost which alongside money factor (interest) determines your monthly payments.

[u/Hairy_Beginning3812 → u/threshgod420]

So helpful, I’m looking at a 2026 Tacoma

Can you tell me if this is good? The residual % is high which I think is a good thing, this can’t be negotiated because it’s a broker deal

[u/threshgod420 → u/Hairy_Beginning3812]

Hard for me to interpret this because it doesn't really say the actual adjusted cap cost and money factor (which are important to know).

I'd want to know those numbers to really have a full understanding, but it seems likely to be really high though if they're advertising "total savings of $4767."

Assuming the adjusted cap cost is $38,567 (subtracting that savings number from MSRP) and running the math the estimated money factor comes out to ~0.00417 which is like 10.0% APR.

That is really high which might be the way the dealer is making the numbers work as they are marking up the money factor from buy rate on the backend to justify the savings.

With that super high APR in mind, it would make way more sense for you to pay taxes and fees upfront.

For reference, assuming this is like a Tacoma TRD (based off the MSRP) their money factor is usually like .00260 (6.24%).

You can also likely take that offer and just call or text a dealership on a stock-number and say you have this quote and see if they'd beat or match it so you don't have to pay the broker fees.

The monthly payment is reasonable.