I agree with boardwalk, you’re getting a 24.99% discount on a 2020 X1, that’s nothing to scoff at.
However, 11k in negative nullifies that and makes this less than ideal of a situation.
The most financially prudent thing if the car still drives and isn’t insanely expensive to maintain is to throw as much money at it if that makes sense, it’s a depreciating asset that will become more expensive over time (loan, maintaining it, etc) cutting your loss without paying money factor / rent charge from a lease on it will be best (it’s more interest).
The way a lease works is that Money Factor / Rent Charge is charged to you on the cost of your lease. You pay that over top the depreciation of the car (Capitlized cost - RV) and fees like bank acquisition fees, dmv fees, and taxes, plus in your case, that 11k in negative equity.
TLDR; You’re still paying another 2.83% (1.63% with multiple security deposits) moneyfactor on your negative and paying for a BMW lease.
You’re texas as well, that means your tax structure disincentivizes leasing. You’re paying tax on the entire car, not just the payments, unless you are getting a tax credit (very possible).
However on the flip side, if the lease interest with multiple security deposits (reduces money factor / rent charge), is less than your current loan interest, this might not be the worst idea.
OP cannot comment anymore today it seems. Feel free to PM me and I will post any responses as screenshots. I truly think this isn’t a terrible option to erase all negative and start fresh in 3 years (especially if said mystery truck isn’t a Toyota)
Ah yeah. I was speaking generally but that’s very true. Trade in helps with taxes, and hurts with negative.
As @max_g mentioned, incentives are included, but are pretty tiny, 1000 cash, 750 conquest/1k loyalty for June according to autobytel for Houston. Still a nearly 21% discount.
You can’t equivocate rent charge to finance charge. Rent charge is calculated differently and does not compound (reduce with principal) like finance charge.
I think it’s important to run the numbers like @j_e_f_f said. OP could be in positive equity in three years for all we know, depending on his loan amortization and value retention
The only truck owner that may consider this would be one who owns a dodge 1500 or a Nissan frontier. Any other truck owner would have positive equity very early in a loan.
But, not as a trade in. I own a Tundra in CA and the trade in vs private party can be several thousands. Kbb data favors dealers imo.
