My wife’s lease is up on her 2019 Mazda CX-9 touring premium package in March and I have a dilemma on how to handle it with the way the current market is I will likely be buying it but not sure if I want to sell immediately and lease a new car or just buy it and drive it till the market settles.
She rarely drives right now. Her 36/10 lease with 4 months to expectation has 12,800 miles on it. RV on the car is around $22,500. We are in Texas so I already paid taxes on the entire car. According to KBB the car is worth $34k-$38k.
So my thoughts are:
Buy the car and drive it till the market settles down. At which point I will likely lose most my 12k+ equity but can get a much better lease deal.
Sell the car, put the 12k in an investment account and use 300/month from it to pay the premium on today’s lease.
Trade in or sale the vehicle and use the equity to put down on a lease and drive my payments back down to what I’m used to.
We usually target $375-$450 monthly payments on her vehicles. I am liking the idea of option 2 but a market collapse could hurt.
Looking for thoughts or opinions on how you would handle this. Keep the car or if you look at other cars what deals would you look for in that range? We like the CX-9 for what it’s worth.
Not saying I can get that return. I’m saying if I have 12k I put in and I pull off 300/month over 3 years I would deplete most of it over the 36 months but could at least invest it and hopefully make a little extra over the next 36 months.
I hate to be the bearer of bad news, but in Texas you will pay sales tax again on buying out the lease since there’s a transfer of ownership from Mazda Financial to you. You can double check but I’m pretty sure this is accurate since I just went through the same thing with a BMW. In your case it’s not terrible, but you need to do the following:
Buy out the lease and pay taxes
Wait for title, then sell the the car and Hope the values haven’t gone down if you decide to sell
Does Mazda allow third party buyouts? You could just give it to CarMax/Autonation/Carvana etc. and cash out.
In your case, paying $1200 or so in taxes to get $15k isn’t bad and opens up your options.
Another option although unpopular would be to roll the equity into a new car. You find a $40k CX-9 or whatever that hasn’t been marked up over msrp and see what the dealer will give you on your current car. Let’s say $35k, then you’d be putting $13k down on the lease but also they would use the $35k value of your current car to offset the taxes of the $40k car so you’d save a bit in taxes as well. I know we generally don’t suggest putting money down on a lease but in this case, it could get you into a similar vehicle at a similar monthly.
Best option is to take the cash and wait out this mess if you absolutely don’t need a car right now
I thought I had heard that the tax situation changed but maybe I made that up. I know back when I started leasing 15 years ago you had to pay taxes on buyout but I thought I heard that changed. Guess not if you just went through it.
We do need a vehicle so sell and hold out isn’t an option. Like you said I may have to use the equity to get a good lease deal. Kind of sucks but to me it is still better than buying it out and the market going down, plus the maintenance and risk of being out of warranty. I wonder if I can at least parlay it into a little nicer vehicle.
I generally only lease if I can get tax credit. I was able to get our 6.25% tax down to around 2% on this cx-9. With the current market I’m not sure how easy tax credit will be to get but I will try.
Just an FYI, KBB is completely useless for pricing out cars.
Go to Carmax, Carvana, Vroom , etc and on their sites put your info and get an instant quote which is the real figure. It might even be more than $12k.
I’m in Texas and my lease for my Mazda CX-9 is due up in March. This is my 5th lease and this is such an interesting market. I have about 8k in equity. I am trying to figure out what we want to do for our next SUV. I normally am against putting money down but I look at putting this equity down as the equivalent to buying the car and owning it a year or 2 and the market going back to normal and me losing this inflated equity. I think I may need to use the inflated equity to offset the inflated market.
Car wise we like the Jeep GC and I may order the 4xe. This would be ideal but the dealership I just spoke with wants a $2k non-refundable deposit. Need to shop around and see how standard that is. I don’t mind putting the deposit down if I can lock in my rates.
As for handling my Mazda I’ll likely have to buy it out to last till the Jeep comes in. I plan to call Mazda Monday and see if I can extend my lease but and I need to see how Mazda (chase bank) is on selling a lease outright.
We went to the Houston auto show today and the other SUVs my wife liked are the Cadillac CX5, Lexus RX and the Nissan Pathfinder (biggest surprise of the show for me). Also she like the PHEV Pacifica.
Sorry. I kind of rambled on just trying to collect my thoughts and get any advise anyone may have in this.
When you order a 4xe do you run the risk of major changes in MF and RV seeing as we don’t know what they will be jet it is just a little scary going into them blind.
