I bought a used 2019 Jeep Cherokee Limited at the worst of the used car market, in part to tow a particular travel trailer, but we then bought a little bigger trailer and the Jeep has just too small of a wheelbase to be comfortable. We’d like to switch to a midsize truck (or maybe a Nissan Pathfinder).
BUT, with the extended warranty we bought for the Jeep, we still owe $31k, and the KBB is from 18k-21k. We are able to put up to $6k down, but the two dealers I’ve gone to haven’t got the payments where I needed them, which is about $525/mo.
The first dealer was a Chevy, and I wanted to lease a 2023 Colorado, but the dealer told me Chevy would not finance that much negative equity (they offered about $21k for the Jeep, but then no incentives on the truck). Finance would have been about $700 or so dollars.
Yesterday, after receiving a not from a Nissan dealer about making deals on the last day of October, I went to lease a Nissan Frontier SV ($38k sale price), but they would only give me $18k on my Jeep, and with $5k down, the lease was around $850. When I use the calculator on this site, I can get close to my mark if I had only $10k in negative equity, $5k down, and a 40-48month lease. What am I missing?
As it is now, I’ll probably wait until the end of November, or even into January, assuming there will still be 2023 models around and better deals. But am I just out of luck until way down the road? I have many years of payments left on the Jeep, and I’ll still be at least $6k upside down even two years from now. I’d love to reduce my indebtedness by leasing. My credit score is great to excellent. Am I talking to the dealers wrong? Is this just a really untenable request I’m making?
Not sure your perception matches the reality of the situation. Rolling in negative equity is a form of borrowing, so you’re paying interest on it. Depending on your state, you may end up paying sales tax on top too, without necessarily realizing it.
Not sure how Colorados or Frontiers give you a longer enough wheelbase that makes all this worthwhile?
The uncomfortable answer is, you should stop borrowing money to finance the wants you are unable to comfortably afford. Kicking the can down the road is not a wise decision.
If this is the objective, consider selling the trailer in the Spring when the market is strongest, and pay down the balance of the truck (or pay it off completely, depending on the numbers).
And then once your head is above water, re-evaluate.
Waltzing into a dealership without knowing what you’re targeting makes you an easy mark. Did you have an aged unit you were targeting for a larger sales price reduction? Did you know the MF and RV of the truck you were looking at? Or was this all you were figuring out after the fact.
How often are you towing your travel trailer? If the only thing that you don’t like with the Wrangler is that it doesn’t “comfortably” tow the travel trailer, why not just rent a fullsized truck for the times you need to tow it?
Cancel the extended warranty and any other products your financed on top of the Jeep. Typically lenders will finance 110-120% of MSRP… the problem is that the Colorado you looked at didn’t have a high enough MSRP to offset the negative. Take a look at Jeep Gladiators… they’re doing 10-15% off on top of dealer discount off MSRP. Get outside financing from DCU or similar credit union that finances above MSRP and you should be fine.
The payment will most likely be above your target but that’s probably your easiest bet. Also keep in mind that vehicles with large rebates typically have terrible resale anyway, so you’ll just be back in the same place again if you find that your replacement vehicle doesn’t work for you.
The wheel base on the Jeep is 106, while the Frontier is about 126: enough to make towing my trailer (with weight distribution and sway control) less squirrelly in the wind.
I did have numbers and targets, information when going to the dealer. And I did target two trucks I knew had been there for quite some time.
As for renting a truck, that would of course be a cost above what I already pay for the Jeep Cherokee, and terribly inconvenient, given that most of our camping is on short notice.
Some I do, some I lease, some I finance. I don’t however manufacture problems to engineer solutions for to make myself think that burying myself in more debt somehow solves a self inflicted issue.
You have no idea of my means. I haven’t said I’m in trouble, or that I need to do this. For all you know the reason I want the payment I do is because we’re paying off our house (which is the case). We are well within our means, and this car situation is a low priority.
I’m thankful to all you who have been constructive, but no one comes here wanting to be told that they shouldn’t have negative equity, or that they made bad decisions, trying to shame people. How is that possibly helpful? Some of you act like trolls.
I was just looking at another section in here where someone was asking about what to do with $30k negative equity, and there were some specific, concrete responses (thought some trollish shaming). Is it because I’m taking about a Jeep and smaller amounts of money that makes some of you think I’m a financial newby or idiot? If somehow I were taking about Mercedes and Range Rover it would be different?
Again, thanks for constructive ideas. Just wanted to checker out the ideas of super lease hackers.
When it comes to the circle of negative equity, generally the most helpful thing that can be given is a smack to the back of the head to get people to change their behavior patterns rather than have them compound their negative equity with extra taxes and interest.
Typically a “help me with negative equity” post is really a “help me bury myself deeper by giving me a way to justify the bad decision as if it’s financially necessary” post.
You haven’t been here very long, but questions about negative equity get asked here from time to time, and the implication by the OP is that they are kind of in trouble and/or they they need to do this and/or that they have a history of making bad financial decisions.
Asking the question simply b/c you want to use your $ effectively is actually rather uncommon. Had you said up front that you didn’t need to do this, I imagine the tone of the responses might’ve been rather different.
FWIW, I didn’t think that there was clearly a higher proportion of constructive responses on the other thread about negative equity, esp when it was said that the person w/ the negative equity is loaded and didn’t really give two sh*ts about the negative equity.
Having said that, yes, we could definitely be a lot less flippant and sarcastic in responding to… anything and everything.
When you use phrases like “payments weren’t where I needed them to be” it indicates this isn’t a unconstrained choice you’re making. If you could swing $900/month without breaking a sweat but it doesn’t fit your other goals, totally different scenario.
