Loan advice needed on trade in

[Stern]

Currently in the market for a GT1/GT2, but unsure on how to handle my current case if people have had similar experiences. I have been having multiple issues with my 2019 Subaru WRX with less than 10k miles, I have had it in the shop at least 4 times and have accumulated at least 7k in repairs that were all covered under warranty and "manufacturing issues". I have basically had nothing but issues since the day I had it and have been out of the car while its been repaired for at least 10% of my time owning the vehicle. I have been pretty unsuccessful in attempting to have Subaru of America (Subaru's Corporate) to purchase the vehicle back as I believe it's the fairest course of action due to how many repairs (same repairs I have experienced and it doesn't seem to still be addressed fully). I have been eying the GT1/G2's for a while now and it is likely what I should have purchased the first time around, but it was the first year the Stinger came out and I wanted to wait until the next year's revisions to iron out of a lot kinks before I dove into purchasing.

So in short, I currently owe around $17k on my loan for the WRX - The average buyback for the vehicle trim/options I have seen is around $24-26k for the current mileage. I have near-perfect credit (800 score) so financing shouldn't be an issue whether its the lease or just straight purchase. However, I am just weighing my options on the best way to handle my situation if I was going to purchase a GT1/GT2 at the current rate with the WRX loan in mind. So far it seems like the best course is the lease buy-out option, but I am really unsure of how all that works with a potential trade-in/remaining balance on a previous loan.

 

[MerlintheMad]

So, if I understand what you're saying: if you get top dollar out of your Subie you'll have c. $9K to put toward a new car? You're not upside down. So, it seems to me that the question vis-a-vis buyout is whether you can get a much lower interest rate on a loan to do the buyout. The main concern regardless is OTD price; not monthly payment (which you are going to avoid by doing the buyout; but still have a loan payment that is much lower than the lease monthly would be).

As I understand it, putting money down on a lease is a no-no. You're much better off putting the $9K in the bank. It is understood that you already negotiated OTD to your satisfaction without having to put any down on the car. You can, of course, reduce the monthly on your loan (to do the buyout) by using the $9K. If the interest rate is sufficiently low the buyout works. Otherwise, just do the lease on the OTD you accept and keep the money as your emergency fund.

 

[eflyguy]

At least here in the USA (unsure where you are), there is hardly any situation where "trading" your current vehicle makes financial sense.

Two transactions, dealt with seperately.

 

[Stern]

So, if I understand what you're saying: if you get top dollar out of your Subie you'll have c. $9K to put toward a new car? You're not upside down. So, it seems to me that the question vis-a-vis buyout is whether you can get a much lower interest rate on a loan to do the buyout. The main concern regardless is OTD price; not monthly payment (which you are going to avoid by doing the buyout; but still have a loan payment that is much lower than the lease monthly would be).

As I understand it, putting money down on a lease is a no-no. You're much better off putting the $9K in the bank. It is understood that you already negotiated OTD to your satisfaction without having to put any down on the car. You can, of course, reduce the monthly on your loan (to do the buyout) by using the $9K. If the interest rate is sufficiently low the buyout works. Otherwise, just do the lease on the OTD you accept and keep the money as your emergency fund.

Yes, from what I understand you always want to put the least amount of money down on a lease because if you were to total the car right off the lot you would be out any additional money put towards the lease. I am leaning more towards the lease-buy out option, however, I am still waiting on some better news from Subaru Corporate as I hope they repurchase my vehicle back so I don't experience much of a loss for something out of my control.