Tips on Buying Cars: buy/lease car, chase auto finance, kelly blue book

Question
THANKS for information.

Here is some more info to help you give us advice:
1.5 was used because it is easier to type than 1 1/2 sometimes.
Purchased new, 2005, Subaru Forester.
Current interest: 5.29%
Current balance on loan: 21,565.
Total monthly payment: 490.
Chase Auto Finance is the lender, via the dealership.
NADA used car guide: 17,325.
Kelly Blue Book: 17,450.
We can lease a new similar model this month for about 250.

Again, monthly cash flow is the problem with a new child on the way; we realize that this may not be the best financial decision, but we aren't sure we can swing the monthly payments.

Thanks !

Feel free to ask others, we really, really appreciate your help and advice !!!




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The text above is a follow-up to ...

-----Question-----
For years I leaned towards leasing a car rather than buying, mostly because I enjoy driving a newer car every 2, 3, or 4 years and the lower monthly payments than you can often get by leasing.   My new wife of 1.5 years purchased a NEW 2006 Subaru just before we got married.  For the entire 1.5 years we've had the car and been married, I've seen lease payments on the same, or one year newer, models for about HALF of what she is paying for purchase.   Now into her purchase agreement for this long, we are having a child, hence money will begin to be tighter around here month to month.  Any suggestions on how we can get out of the purchase agreement for 500 a month and lease for 250 a month ?  I did check with the finance company and they really aren't interested, of course ... they made a deal to sell and finance a new car, not lease one.  Any and all ideas would be appreciated.
-----Answer-----
I need more info:

What did she pay for the car, and what was its sticker price?
How long did she finance it, how much did she use for a down payment, and what's the interest rate?  Is it a standard loan, or is there a ballon payment due at the end?  
Did she trade in a vehicle, and was there any money owed on that car that was carried over to the new loan?

Answer
Unless you're willing to come up with the difference between what you owe and what the 2006 Subaru is worth IN CASH, there's really not much you can do. And keep in mind that both Kelley Blue Book and NADA numbers tend to be far above what the market is really bringing for cars; you should run your Subaru through Edmunds.com and use their True Market Value pricing for a more realistic, "market-driven" figure.

Perhaps I shouldn't assume anything in your situation, but whenever I'd get a customer that was looking to trade in a vehicle to lower their monthly payments, 999 times out of 1,000 they had no cash to work with. The reality is this: you owe far more on the Subaru than it's worth, and no dealer is going to give what you owe because they feel sorry for you: they're going to give you what the car is worth in the current market, regardless of the loan balance. In leasing, you can pretty much figure that every $1,000.00 in down payment will lower the monthly payment by approx. $30/ month on a 3-year lease.  Conversely, every thousand of negative equity you add will raise it by $30.00. Let's say you get $16500 for it on a trade-in- that $5,000 you're coming up short will add $150 to the payment of the new lease, assuming the lease company will go for such a deal.  The $250 payment you see advertised just became $400 or so (again, assuming you don't want to cover the difference in cash).

I will tell you this: if you're within 500 miles of Victor, NY (a suburb of Rochester), you owe it to yourself to contact Van Bortel Subaru.  They have a nation-wide reputation for straight and honest dealing (they've been the number-one volume Subaru dealer in the nation for 7 years running), and they're always looking for nice, clean used Subarus.  The owner, Kitty Van Bortel, has a VERY strong market demand for used Subarus in her area, so you'll probably get more for it on a trade-in from her than just about any other dealer in the country. Call Kitty @ 1-800-724-8872 and ask for her; if she's not available, ask for her assistant, Ruth Perrin.  If they can't make the numbers work for you, I doubt that anyone can.  They really are great people, and you'll be surprised how easy they are to deal with.  And don't be afraid to tell them that Jeff Clark recommended them!