Hey folks! I live in Washington state (35-miles from Seattle) and trying to figure out if leasing is a realistic route to get out of my current negative equity. Here’s the situation…
Happy wife turned into a not so happy b life in the last year. My wife had wanted a Jaguar F-Pace for the last 5 years and I agreed to get one last September. Without rolling in negativity equity or paying tax on it (trade in was higher than the purchase price), we’re already 13k in negative equity.
Based on that plus the lack of reliability they’re known for I would like to get into a lease to have some care free years while we get back to even.
I talked back and forth with a dealer today on a Buick Envista with a listed price of 26 and change. They told me it would be over $900 on a 24-month lease.
I’m looking to get into a 24-36 month lease with 2k down and paying $700 or less. I have an 800+ credit score and the only rebates I’ve seen that I could qualify for is being a Costco member.
Is this something I should pursue or just tough out this Jaguar nightmare?
What is your payment on the Jag? Depreciation is the worst in the first 2-3 years so the negative equity is not surprising. If your rate is high, refinance and salvage your monthly that way. Then trade in when the depreciation curve flattens.
Apologies for not giving those details. The Jag we bought is a 2018, so well past the first 2-3 year depreciation. Interest rate is 7% and we pay $500/month.
They’re offering you $7k on a car that has a MMR of about $12k. So they are short changing you by roughly $5k on the trade. Even at $12k, you’d be about $8k negative. Retail is approx $17k which would lessen the blow for you. If you must get out, then try to sell privately and pay the bank $3k out of pocket.
If you’re not set on the Envista I’ve found the Encore GX to be a better deal despite a higher MSRP. Dealerships don’t seem to be discounting Envistas much, but I’ve had no issues getting $8K and $9K off a couple of Encore GXs this year including $3K conquest on a purchase. I think the $3K drops to $1,500 on a lease.
I’m in Oregon so my purchase vs. lease calculations are a little different than yours, but they also offer 0.9% for 36 months on a purchase. You should be able to buy one for less than that Envista lease. It isn’t the best car I’ve ever owned, but easily the best car I could purchase for the price in recent years.
Tough it out. If you’re ok paying $900 anyway, pay an extra $400+ a month, between that and your normal principle, in less than a year you should clear out that negative equity and then see where you land from there.
Yikes. Most of us would have recommended against it, but what’s done is done.
Was this with or without the negative equity? If you are dead set on “burying” some of that negative equity, you will need to find a car/SUV with a lot of rebates/incentives. Right now electric vehicles and the Volvo XC90 Plug in hybrid seem to be the way to go. How many miles does your wife drive per year? 10k?
As some have stated, you might be better off paying down your principal on the loan for the Jag for another year and then re-evaluating your options.
The 900 was with the negative equity included. I’m not deadset on any specific car to lease, just the one that will financially work for the next 2 years at best, 3 if we have to. I went with the Envista with the thought process that even with rebates on other cars that I saw, it would still be the least expensive purchase price. For the mileage on a lease, we would have no problem driving 10k or less per year.
As far as keeping the Jag to pay it down, yes that’s an option, however I’m terrified of running into issues that will cause extra hundreds, if not thousands, that will make it even more difficult to get out of the hole.
I would strongly suggest researching lease deals that will help you meet that goal, if you decide to roll in your negative equity into a 24 month or 36 month lease.
In the mean time, take a step back from talking to dealers.
EDIT: Rolling $10k in negative equity into a 36 month lease adds an additional $277/month before any interest or sales tax. Hence, you will need to find a lease deal for not more than $400/month before taxes and fees. You can start by checking out broker deals in the Marketplace.
The more you describe your situation the more I think you need to drop the idea of plowing this negative equity and just get this F-Pace paid down to neutral equity.
