I mean it is possible to “wash” negative equity in a lease. Two ways to do it:
do it on a vehicle where your cap cost will still be lower than the actual real world resale value. Therefore you instantly have neutral or positive equity. Maybe 2020 Acura MDX??
do it on a vehicle where the payment is still low enough with the negative that you can transfer it, and your negative, to someone else. I’m not sure if anything qualifies at the moment… maybe a Camaro LT1? BMW in April when 2020 lease support ends?
I know. Even with the smaller incentive and slightly less bad MF, it’s much higher than a Fusion. And ideally for this to pencil out, the higher incentive is needed, and no Acura loyalty here.
Maybe you’ve also done this, but if you’re trying to launder the negative in the transaction and immediately transact again (sell/swap/re-lease) you are doing it wrong in my opinion.
You dump the CX5 in trade when leasing something with high incentives and low MF, and you carry the lease to term, unless at somepoint it magically has equity (frankly it shouldn’t ever). The negative is gone when you hand the keys back to the captive, free and clear.
Rolling tags/title/taxes puts more weight on the first new lease, that itself isn’t likely to be positive before year 1 (because any incentives were for the negative you brought in).
Cmon - how is this going to ever make sense with OP’s insurance history? Just because they are hacking, they aren’t good laundromats — at all.
You’re completely missing the points that I made. The point was to completely get rid of the negative equity, not pay for it in a different loan or lease.
For example if the MDX cap cost is $40k with the negative and the resale value is $40k, one could immediately resell the vehicle for whatever they wanted and break even. Thus washing the negative. It was an example to spitball, I have no idea if the numbers work but I can’t think of any other vehicles that have both massive rebates and good real world residual value. It surely isn’t a Fusion. The MDX is actually perfect precisely because the MF is so high, which AFS trades for the massive lease cash. They don’t anticipate many folks trading in or buying the lease out. If you’re flipping the car who cares what the MF is.
Why are you so fixated on rebates attached to a vehicle which needs them due to incredibly poor residual value, both in reality and RV? So in your world she leases a fusion for $400/mo and she’s stuck in it for the entire term because who is taking that over…term ends and she’s just spent almost $15k to rent a Fusion for 3 years. When she could be in a 2018 CX5 that’s almost or is paid off. How is leasing a fusion preferable financially in her case? She’ll have paid the negative from the CX5 in its entirety plus rent charge plus tax. And all of the lease inceptions/fees when refinancing the CX5 would have cost $0. The rebate on the fusion does nothing except to cover up how horrendous the RV is to make the lease somewhat reasonable. It’s not a magic negative equity eraser. Guarantee that the cap cost with the negative would still be thousands of dollars higher than whatever the value of the thing is.
You’re being super argumentative even bringing up insurance cost which is extremely variable and unpredictable. my $2.5k van costs more to insure than my $25k convertible.
But I guess if we go with the money laundering definition of “washing”, one could just bury the negative in anything that will support it via the max LTV.
If you drive at least 20k miles a year, then leasing is not the way to go. Regarding your negative equity, I would not suggest rolling it into a new lease. Why not just fix the damage on the Mazda (work out a payment plan or put some of the cost on a credit card), and refinance your loan with a Credit Union. In a couple of years, your car will be paid off.
You could refi for 36 months and look into selling it after 24 months.
As far as maintaining the Mazda, if you can’t afford new tires then not sure what else to tell you.
Some of you folks are paying some outrageous insurance premiums in SFL. I thought mine was high at just under 1200 for ( 6 month premium with all available discounts, paid in full etc) a 2020 BMW and a 2018 Lexus RX350.
PS. I would file the claim and get the car fixed that’s what we pay insurance for. I never feared filing a claim when required.
This is what i don’t understand and want to make sure I’m understanding correctly.
How would I be paying NE on a lease regardless of the model, if - in an ideal example, the incentives negate the NE…essentially getting in on the negotiated selling price and starting clean…also, how is refinancing costing $0? Are you saying shopping for another car loan?
My insurance is more reasonable now all my priors have fallen off…(example: 2021 mazda cx-30 its $112/mo) in Miami Beach.
This i don’t understand. Do you mean a lease transfer?
You would be talking more like 325-350 a month for a Ford Fusion which someone would absolutely takeover. As soon as they do you free and clear of the negative and “washed” of the four wheel debt. I just did this with my father they were upside down from rolling debt after debt on leases. We used the 11k in rebates from Dodge to get a ram. His payment was $250 less than prior payment and vroom just bought it for even money. Now he’s free of the debt and we move in to the truck he actually wanted.
I roll everything in always, I never come out of pocket unless it’s first month.I was quotes from $210 a month for a Ford Fusion up to $400 and I know people currently leasing for a bit more than $400.
doing it wrong in my opinion.
lots of different routes here.