Car brands with positive equity at lease end?

[esquesk]

I did make money on a lease once, not at lease end though.

2018 Lexus RX350 Base Deal ($388/month effective w/ tax)

Well, just to close the loop on my short 3 months with the RX, the car was sold to Carvana today. Total net cash OOP for 3 months including disposition fee; ($1200) Total positive equity cashed out: $2,600 Total cost of ownership for 3 months; ($1,400) Additionally, I was able to pull ahead out of $1,800 of payments on my old RC-F. Picking up a Q5 today, the base RX just wasn’t the right car for us. Will post that deal shortly.

[Vadiksf415]

@pizza8822 why not get a car that offers MSDs and put those down? That way you buy down the rate and get them back at the end of the lease. It’s basically a high interest savings account that nets 30% over 3yrs (on the high end).

[Jon]

Not saying it can’t happen, but it’s rare and can’t be planned, unless you’re getting some limited car like Ford GT.

[jeisensc]

@Jon

unless you’re getting some limited car like Ford GT.

Which I’m almost certain were purchase-only.

Plenty of examples where a car you BUY or finance might be worth as much or more X years after, but not leases. It’s a financial instrument that balances utility and risk. Because (in a $0 DAS lease) all the risk is on the captive, they price that utility as close to the pin as possible. They have all the information and all the experts they can afford to get as close to the pin as possible. No lender is spitting in the wind on what your 3 year old fart car is worth when you hand the keys back over.

[Electric]

Tell BMW that. (I’m aware they make it back on interest, let me have my moment)

[Jon]

@jeisensc

Which I’m almost certain were purchase-only.

Ford GT was purchase only and contract stated that it couldn’t be re-sold for 2 years.

Lexus initially did something similar with the LFA, but they actually only allowed it to be signed for a 24 month lease to prevent resellers.

[Mark_H]

Out of curiosity…

When you say equity are you referring to fair trade in equity, clean retail equity or sell to Vroom/Carvana equity? Totally different things imnsho. I would value trade in equity more as selling a 3 year old Altima or Accord could be challenging.

[vhooloo]

I think a nice electric where you harvest all the rebates could be a money maker… Not at lease end, perhaps a quick flip

A tesla model 3 can also be in that category. I see them list 6 month to 1 year old on Carvana for pretty much what they go for brand new. Difference is that the seller has harvested the tax credit …

[vhooloo]

In general, if you have positive equity in a lease, it means you paid too much …
the leasing game is to make sure you have a car with crap resale much much lower than RV. looking at you A6…

[pizza8822]

You have way to much time on your hands. If there are two similar vehicles I’m considering leasing that are in the same class for a similar payment, picking the one that might have equity at the end is smart financially.

[StingerTT]

You continue to show a misunderstanding of how leasing works.

[jeisensc]

@pizza8822

If there are two similar vehicles I’m considering leasing that are in the same class for a similar payment, picking the one that might have equity at the end is smart financially.

Of course. What time traveling apparatus do you own that could tell you such information?

[pizza8822]

I don’t know for sure if any vehicle will have equity at the end. But can we not agree that an Accord is a lot more likely to have equity at the end of a lease than a Fusion? That’s my only point - if you’re indifferent to the vehicle and the payment is the same, you might pick based on possible equity at the end.

[chrishs2000]

But why?

I agree with @pizza8822. You can’t control the RV. If the manufacturer sets a very conservative RV, thereby almost guaranteeing positive equity at lease end and the ability to get out of the lease at anytime via selling it with no financial harm, what’s the downside?

A Civic Si with a 50’s RV is just as nuts as a 5 series with a 60’s RV, but in the opposite way.

I think some of you are thinking waaaaaaay too hard about this.

[Chi_Ahrens]

I don’t know about positive equity, but Subarus are probably pretty easy to sell for payoff amount when your lease is up. They’re generally reliable, but don’t have crazy resale values like Hondas and Toyotas.

[oliviaW]

How are you calculating you’d be $1000 ahead with 24 payments remaining - does Chrysler Financial provide a real-time buyout? Also, bear in mind JGC is getting totally redesigned and should launch in a couple months, to go on sale early next year. That can’t be good for current gen, if you can really unload and come out ahead, could make a lot of sense to do sooner than later.

[jeisensc]

OP asked:

@leasehackrfan

What car brands typically have positive equity so you make money by selling it to Carmax at lease end for profit?

Error: time machine not found. No way to predict which makes/models. You might find the base model beat the curve for 5 years but now it’s behind and the loaded trim is the one slightly ahead. A lot of maneuvering to drive something you like less in hopes of coming out slightly ahead.

@pizza8822

But can we not agree that an Accord is a lot more likely to have equity at the end of a lease than a Fusion?

Only because the Accord’s RV doesn’t reflect what it will be worth at disposition, AND it has a higher MF, AND it has a higher payment, meaning you will pay more for the Accord than the Fusion over time (payments will not be same, Ford will be less), and not necessarily be net positive at disposition. If you want the Accord, get the Accord. If you don’t care get the Fusion because it leases better. As has been said, not caring and overpaying for the Accord just to maybe come out ahead (assuming you aren’t in any accidents in 3 years) is a bad use of money.

Your example of “two similar cars finances similar worth more at the end” falls apart over the lease term for all the other reasons discussed. There is no scenario where you aren’t overpaying for the utility you use, making poor use of cash (lost opportunity cost, interest etc), 100% assuming the risk of someone hitting you in a parking lot and wrecking your resale value (even if insurance fixes it: diminished value), all to be reasonably certain that at disposition you will have more equity than the payoff.

[VirginiaBeacher]

@pizza8822

and you like the Altima marginally more, the go lease an Altima instead

Well no sane person should pick a Nissan over anything unless they like driving mediocrity.

[jeisensc]

I’ll see your Nissan point and raise you: nobody with means (who is arguing about overpaying to Christmas club their lease) should lease a car they don’t like best.

Step 0: pick the car that you like best, gives you the feelz, within your other constraints. Then negotiate the deal. Don’t settle for anything to save 2 lattes a week on the payment, or drive a in hopes it’s worth more at disposition.

Make the absolute best deal you can on the car you really like/want.

[chrishs2000]

@jeisensc

Only because the Accord’s RV doesn’t reflect what it will be worth at disposition, AND it has a higher MF, AND it has a higher payment, meaning you will pay more for the Accord than the Fusion over time (payments will not be same, Ford will be less), and not necessarily be net positive at disposition. If you want the Accord, get the Accord. If you don’t care get the Fusion because it leases better. As has been said, not caring and overpaying for the Accord just to maybe come out ahead (assuming you aren’t in any accidents in 3 years) is a bad use of money.

Dude you’re arguing against generalizations by making more generalizations. Why are you assuming that the Accord has a higher MF and a higher payment? Fusions lease terribly unless they have $10k+ in lease cash attached to them.

Here’s the point.

Vehicle A: $400/mo, RV 60%, real world examples 2 years old are worth 40%.
Vehicle B: $400/mo, RV 50%, real word examples 2 years old are worth 60%

All things being equal, what’s the harm in favoring Vehicle B? I think it’s a really legit thing to consider. The ability to get out of a lease at any time, or have positive equity at the end, would be a huge plus.