New here, but have been reading for a short while prior to joining. I have been able to find some insight from existing posts, but think my specifics would be more helpful to really get a better idea. This will be a little lengthy, but I thought it best to be detailed for better advice.
Starting from the top, I have never leased a vehicle. In hindsight I really should have been considering that I seldom keep a car more than a year or two. Generally speaking my habit of car swapping when pretty well until 2016. 2016 was kind of a perfect storm for my family and I. In Tennessee I was a manager of a large investment firm, doing pretty well overall. In the middle of the year we found out my wife was pregnant, things changed quickly. At the time we only had one auto loan, which was for my wife BMW Z4, and I owned a 1967 Porsche 911. Knowing our cars were not ideal for a child we went shopping. I sold my 911 for a modest profit and used the proceeds to pay most off the negative off my wife’s Z4. We still ended up rolling a little into one of the loans, which was for a new RR Evoque Coupe for her, and I picked up a 335i Sedan for myself. Several months later my wifes health began to decline from her difficult pregnancy, and we decided to sell our home in Nashville, and move to Ohio to be closer to her family. Once settled in Ohio our daughter was born healthy, and several month’s later my wife’s health improved as well. I had transferred to another office in our firm nearby, and things were going fine.
A couple of month’s later my investment firm decided during restructuring to move the Ohio office to Chicago. I elected to leave, as we had just gotten comfortable, and opened up my own business locally. This decision resulted in a pretty decent pay cut, but with our reserves we were still pretty comfortable.
Here’s where I could have planned a little better. First buying a 2 door Evoque was very stupid, and the modifications I had made to my 335i for trackdays did not agree with butchered Northern roads we now travel. We decided to trade our cars, that at this point we had for less than a year, for something a little more practical. My wife got an new Explorer, and I picked up a preowned Raptor. We rolled a quite a bit into the new loans, more than we had imagined at the time, and because I had recently opened a new business my income wasn’t appealing to the banks anymore. We ended up taking some pretty bad rates to get the deal done.
As a year or so has past since these events my wife, and I are starting to realize that when we decide to have another child our current home will be too small for our needs. I’m starting to plan for the next couple of years, and know that my new erratic income schedule, and our increase debt to income will be problematic when it comes time to purchase a new home.
Now that all the dust has settled I’ve realize how bad we really did on these cars, and I’d like to clear the air. On the Explorer, between what we rolled into the loan, and the depreciation from the lot we are about 11k underwater. We have begun to pay aggressively to clear this negative equity, and should have it cleared up in about 2 years. As for my Raptor, I’m sitting around 13k upside down, and am considering using a lease to help move the ball forward a little more quickly.
All of our extra income is going into the Explorer, as my wife will likely actually keep her car longer than I ever have, and of the 2 payments her’s is significantly lower. On my truck I’m paying just shy of 1k a month, but because of my 9% APR my principal isn’t moving down very much at all and I’d like your insight on the idea of using a lease to help rectify my lapse of judgement.
What vehicle’s do you all think could potentially absorb my negative equity so that at the end of the lease I could walk away clean?
Ideally I would like to reduce my payments, but who doesn’t. In my mind an automobile at the right price, compounded with other incentives could possibly lead to something in the luxury sedan/SUV sector around the $350/400 price point, then adding in what I would assume to be $200-250’s in negative on top leading me into a $600ish payment area.
I’m not picky about the car itself, but I have been looking at the luxury sector assuming the higher price point would allow for more negative to be assumed into the terms of the lease, but since this is a new world to me I’m not sure if my notions are correct.
Another thing I don’t know is what is allowed when trying to compound multiple incentives, and rebates into a deal. I have seen, various offers for leasing from companies such as Costco, and USAA, but how high can you stack them, and furthermore when should that be addressed during the structuring of a deal?
I hope my candor has given enough information to allow for your input, and thank you for taking the time to share your thoughts.