Buyout, Trade-In & Lease or Trade-In & Finance - Subaru Forester

Ask the Hackrs
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1

Hello,

My wife’s 2020 Subaru Forester Touring lease ended in September of 2023.

The payoff is ~$23,000

The estimated trade in value (cars.com & Carvana) is ~$24,000-$25,000

My wife only wants a Subaru Forester.

My question is… would it be better to buyout the lease and keep the vehicle for a few years or to trade it in and get into a new Forester lease?

I have a good dealer that I just leased a Legacy in October and a Forester limited for 10% off MSRP on each vehicle. So using that discount the lease breakdown would be something like this:

MSRP: $40,000
Selling Price: $36,000
Tax: 7% (IL, not Chicago)
RV: 63%
MF: .00174 (4.18%)
Doc, Gov & Acq: $1,300
Lease Loyalty (First Payment Up to $500)
SMF Customer Assistance: $500

Monthly is about $425 with just fees DAS

She’s not considering other vehicles. So the question is whether to do 1 of the 3 options:

1.) buyout of in good condition ideal color existing 2020 forester touring with 30k miles.

2.) trade in existing forester to lease a new 2024 version

3.) trade in and finance a 2024 version

In option #1 are there other factors I’m not thinking about? I’m guessing I’d owe 7% tax on top of the $23k payoff amount, right?

Historically I much prefer leasing as I like new and I don’t like maintenance but I’m open to learning why 1 option might be much better than another.

Thank you very much for your help!

1 Like
2

The redesigned 2025 Forester is coming out this spring, so you’ll have to decide whether you want to wait for that or go with the 2024 which is pretty much the same as the 2020.

3

I would buy out the existing one. Resale value on these has always been high. Just look up what 2017 are selling for with 60K miles (approx $17.5K).

*I am not factoring in taxes/fees with this as its simply to show the benefit of keeping, this also assumes you arent financing the buyout.

Payoff: $23,000
3 Year Value: $17,000 (accounting for some dip in the marker)
Maintenance: $4,000 (variable number obviously)
TCO: $10,0000

New Lease TCO for 3 years: $15,300

4

I assume you would finance the $23K buyout for 3 years, so you are looking at a payment of $700 a month. Is that an issue? At the end of 3 years you own a 6 year old car worth about $16K. Will older Foresters take a bigger depreciation hit when the new 2025 Forester comes out? Do you want to take the residual risk?

5

How much in fees?

6

Acq is 595
Doc is 347.26
TTL is 351

First payment is waived for lease loyalty so ~$16k TCO over 36 months total for an effective monthly of $450

7

If I were to buyout I don’t think I’d finance - I’d pay cash.

8

I think buying makes more sense but comes down to MY24 or MY25.

Subaru extended warranties are among the cheapest in the business. I think buying the MY25 and trading that in when the next model comes out, is the lowest TCO of having the newest model and being under warranty the whole time.

9

I would buy it out (in fact that’s exactly what I did with our 2019 Tiguan).

Keep it for a few years and see where you go from there.

10

Then that is probably the best option if your wife is happy with the car. That is until she at least sees the new 2025 Forester! Also, don’t assume the dealer will give you the trade-in value you see from sites like KBB. Does IL give a tax credit against trade-in value? That means you essentially buy out the car and immediately trade it into the dealer to avoid any tax or registration issues.

11

Wife has 2019 forester and she bought it out. Shes gonna wait until 2025 comes out

12

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