My car is paid off and worth 30K to 34K trade, more if I sell private.
The sales manager told me as an example, if I put down 5K of my 30K+ equity in a trade, he will cut me a check for the unused portion. In this case $25K+,
What do you think?
On a lease or finance for the new car?
It is a Lease.
This is a perfectly normal solution that any dealer should offer, although not many will unless you specifically ask.
On my last trade a few years ago for example I had about $8k in equity, used $1k to cover 1st month payment and the dealer cut me a check back for the remaining $7k.
No. Pocket the money. On a finance its different as you’d be getting sales tax break. You could also do MSD or one pay lease to bring down MF.
So then sell private.
I will be retiring in 4 years, and would like to buy or lease an EV now, so that I lose the $350 to $400 a month gasoline costs. I have never leased before and trying to learn from this site before I buy/lease.
Approved by my local credit union for a loan at 5.71%. But, the loan offer expires soon.
Leasing over three years seems to definitely have a lower cost of ownership than financing to buy. But with 31k in my pocket, what do you think would be the best strategy for a person who wants to keep monthly payments over 5 years or monthly lease payments over 36 months below $700. Or if I was to buy with 31k down and finance the rest.
I like BMW, Mercedes EVs, especially sedans. So what do you all think is the best strategy?
Lease to get the pass through BEV credit and use the money to do it as a one pay to save on interest. 
The OP has not leased before, so he may not understand what a 1-pay lease means. Most dealers do not tell buyers about this option. He could also use some of the money to put down multiple security deposits to lower the money factor. Don’t forget about the sales tax break for trading in the car if the OP lives in MD. Please brokers, help this veteran lease a car without getting fleeced by the dealer!
Thanks guys, and TY to Wtmeyer as I am a disabled (non combat) Military Veteran.
IAC, IAC and Wtmeyer thank you for teh responses. I am going to use Leasehackr to see how that one pay effects the numbers.
So basically, when the lease ends if I want to keep the car, I pay the amount of the Residual Value correct?
Yes residual value is the cost to buy out the car at the end, then you don’t need to pay disposition fee, although that’s only a few hundred dollars so not a reason to buy out the car alone.
However for an EV I would lease right now to get $7500 off and avoid what will likely be heavy depreciation in three years. I imagine the 2026/2027 models will have things much better than now which will push residual values lower. There will also be a lot more EVs on the market which will make the current pricing wars probably seem like child’s play.
Take the equity and do something else with it. I did something similar last month and sold my car for $47,000 and leased an iX.
With the $47,000 I paid $7,000 in MSDs on the lease (lowers money factor and is returned at lease end), put some money in high yield savings account, mutual funds, stocks, and kept some in checking account.
It’s 30 points. I just ran into this issue and confirmed it with the powers that be. At that point, buyers on the east coast may as well use MSDs and get a 0.00028 reduction and not tie up that much money for 3 years.
If car is in accixent or totaled r not msdsno longer refund?
MSD are safe as they are a security and not cap cost reduction.
Oh, i did not know that. All those u tube videos sayimg not to put money downto avoid losing it
There’s a difference between money down and MSDs. MSDs aren’t money down. They simply reduce the money factor so that you pay less interest. Because they’re held as a security deposit, if anything happens to the car, you get them back.
- No discount on MSRP 57K
- Inflated Money Factor 0.00350 (BMW offered 0.00225)
- 36 month/10000 mile payment was over $1100 somehow.
- Manager claimed residual was in the mid to low 50s
- Told us every 2023 MB E300 from the one that had a MSRP of $49K to the one that was 57K would all be low to mid 1000’s on a 36 month lease 7500K miles.
- This happened during this deal. I was taking my sister in law car shopping, during the test drive, the salesman asked her to turn into one of two very narrow and curving curbed driveways at dealership, they had the Window Sticker on the front passenger window and it was causing visibility issues. My sister in law complained during the drive she felt uncomfortable driving the car, but the salesman told her not to worry he would help her.
Upon turning into the driveway which the salesman asked her to do I immediately realized she was too close to the curb when approaching the curbed driveways apex, and immediately I said “stop” watch the curb! The sales man said something similar.
She gave the rim about a 4 inch long curb rash.
She felt bad as did I and we honestly apologized and she was upset.
The sales man said “dont worry we can buff it out” or something like that.
When the manager entered the room he immediately said:
“If you buy the car I will charge the $500 cost to repair somewhere into the cost of buying the vehicle, if you dont buy it I will send you an invoice.”
Again we expressed our apologies in an honest way.
It was then he presented the deal I showed above, which to me is bad.
That is a horrible deal.
Why not get one of the 2023 330ix I posted at 8.5% off? Even without loyalty, it’s a much better deal. The MF is 0.0019 without loyalty.
I don’t know what to say about the wheel, but she may have signed a waiver upon talking the car for a test drive. However, she was pressured and you are her witness (for whatever that is worth).