New member and I just want some advice. I know Made a horrible financial decision and just want some advice to not pay as much fees or get a good deal at time of buyout. Here we go…
Won’t get into details but I rolled a bunch of negative equity into a lease to help out my dad that got laid off.
2016 Kia Sorento LX
MSRP was about 26k with taxes, fees, maintenance plan, etc came out to like 29-30k.
Ended up paying about 42 out the door and my payments are about 650 a month. Thankfully I am in a good financial situation so that 650 payment doesn’t bother me too much. Just over paying by 400 eats my insides. And I let my brother drive the car and he got into an accident. This decision just cursed me in every way lol. But this isn’t even the “bad” part. It gets much worse.
I let my dad borrow the car for about 8 months while I was driving a hooptie. And my goodness I am now about 16k Miles over . I have about 15 more payments left so I have a lot of time to maybe figure something out I hope.
So here is my question to you experts.
Do I buy miles now and pay an extra 150-170 a month for the next year and some change?
Do I just keep enjoying the car and buy it out? Residual is 14,025 but it will be worth much less and I hope I can negotiate it down. I actually love the car it’s an amazing family car. My wife loves it. Just the over paying is eating me alive but not my pockets thankfully, I’m still comfortable thank god.
When it’s time to return the car just take it to the chi and move on?
Thank you Hackrs. Take it easy on me lol I know this is a horrible situation but I did it for dad since he did so much for me but ugh it sucks.
Are you 16k miles over where you should be at this point, or 16k miles over your total mileage over the term of the lease?
You’re going to be eating the extra cost one way or another - how you decide to eat it is up to you.
You can pay for mileage to turn in and be done with it when lease is up, or you can grossly overpay for the value of the car when you buy it at the residual previously set. Residual prices can not be negotiated for good reason. You can’t make the car worth less so you can just buy it for less - the finance would be losing significant money.
If it was me - I would get a turn in quote when it nears time to see exactly how much the mileage was going to cost me. Then I would compare to see how much a same year/trim/mileage Sorento would cost me to buy in my local market versus the residual cost I would have to pay to buy it out. From there I would choose the smallest number and go that way.
Hope it helps and you’ve learned not to get in this situation again.
@StartingOut to answer your question, the car now had 38k miles. It was a 4 year lease at 12k miles a year. So yea it’s an outrages amount that I am over to say the least.
Okay. So on a 48/12 lease you have a total of 48,000 miles for the lease, currently have 38k miles, and 15 months to go. Unless you meant it was a 36 month lease…
That doesn’t seem so bad. Do you have another vehicle you can split your mileage with for the next 15 months?
Yeah having 10k miles left for 15 months isn’t horrible. Hopefully that is the case. Be judicious driving, maybe rent a car if you have any real long drives and you shouldn’t owe a fortune in overages
what is the interest rate on your lease? it may make more sense to buy it off NOW in cash than to keep paying on msrp + negative equity if the lease terms were poor.
people need to think and calculate before any decision is made.
how did you figure rolling in negative equity and buying a new car would help your father?
Just buy it out at end and drive it till its wheels fall off. Reading your posts seems you have others in family who can still drive it like your brother. Never hurts ti have a paid off car in the household. Besides you have hooptie right niw that might need replacement as well, which means you come back here and work on rewarding yourself with a great lease next year.
He said he did it to helo family. Thats more than enough ni need for asking him why he didnt think before signing and all. He needs advice, not schooling in what he did in the past.
The only way to help people to make them understand the decisions they made. ignoring reality is not helpful. the best thing to do is to avoid thought processes that led to poor decisions, but you can only do that if you think about it logically.
If his father needed a car, or money, it would still make no sense. If his father needed money or a car, why would he sell his car for a negative sum, and why would he choose to pay more money for a vehicle?
I fail to see any correlation, so I am asking him to clarify.
@BigBeard I didn’t want to get into the details but my dad has done a lot for me and when he got laid off I was paying over $1000 in car payments and taking care of my wife who was pregnant at the time. It was a lot on me. And I had to start paying for my wife’s car for 7 months until she went back to work.
Not thinking I thought my only option would be to get rid of my car and my dads save the 400$ a month and take a loss on a car. Simple as that. That was my second ever car purchase and I know it wasn’t the best decision. If I could go back I would try to figure out another way before getting into this. But it is what it is. I want advice from you experts to help me with my situation. And I know there would be some negative criticism along with me posting here but I NEED to hear it so I don’t make a mistake like this again. I’m 27 hopefully I have a long life ahead of me. And I will be sure not to get into something like this again.
@28firefighter I did have one but I recently totaled it . Lol I haven’t been having the best luck with cars lately but I plan on buying another one sometime in Jan 2019. Right now I avg about 1500 Miles a month which isn’t helping at all but other months are less and some are more. Sometimes the car sits for a week and other times it is driven. 1500x15 is about 60kish Miles. That’s how I did my math which is about 12k over which is scaring the heck out of me.
12k miles over isn’t that bad, especially if you can pre-pay for the mileage. At $.20/mi, it’s $2400, which is probably cheaper than doing anything else. Find out the pre-pay rate.
buying the car at the end doesn’t make sense because of the accident. The car’s value is nowhere near the payoff quote so you’re really digging an even deeper hole.
I would do one of two things:
try to sell it now on the private market and see what kind of $ you can get. Forget carmax due to the accident. Once you have a pricing idea you can compare it to what it will cost to keep the car and make a decision based on that.
Take it easy on the miles by using your hooptie/rental car (sometimes you can get a really cheap weekly rental rates off airport if you need to go on a longer drive) if needed and turn it in at end of lease and let the leasing company take the hit on the real value of the car.
The thing many people don’t understand is that if you roll equity into a car, you owe the money. Doesn’t matter if it sits bad in your stomach. You’re just shifting liability from one item to the next, it is still owed.
So now I see what you were thinking when doing this. You assumed you would save an extra $350 a month that you can help your father with…but you must recognize that is very short-sighted, because as 305Hackr said…you still owe that money, and in fact, you owe even more than you initially did, due to interest. A person’s first instinct may make them think they are saving money by brining payments down from 1k to 650…but that will be true only in the very short term.
The best financial decision at that time would have been to sell your lease and buy a reliable but cheap used car. Now you know.
Selling the car to a private party now makes no sense - you will lose out on a massive portion of it…this should be a last resort in your current case. You will take a massive hit, and then you would still need to buy a car. The only way to minimize this would be to simply buy the car out now - at least you would save on the interest charges on the inflated price, and, you would still have a car. However, if you don’t have the cash, then the prior option is the only one you have, or, you will just have to keep it and pay the mileage fee.
This is something you have to figure out. Just do the calculations. Calculate how many more miles you NEED to drive until lease return, the total miles you will be over, and the cost. Compare this cost with the cost of selling your car now (and remember, you will need another car so this is an added expense which I am not sure you are comfortable with) and figuring out the financial loss you will take due to the poor contract and negative equity. Your second option is to pay off the car now and keep it, to save on finance charges (compare with the money lost on interest and the estimated cost of over-mileage).
Whatever way you put it, unless you go for bankruptcy, you will have to pay for both vehicles. I don’t know your current financial situation so I cannot tell you if you should buyout the car, or keep paying and turn it in to lease another. You say your junker was totaled, so keep that in mind. Maybe it is a good idea to just have the car and recoup your losses for a few years. There is no getting out of paying for the vehicles unless you go to court for bankruptcy, which will just cost you more money.
. Lol I haven’t been having the best luck with cars lately but I plan on buying another one sometime in Jan 2019. Right now I avg about 1500 Miles a month which isn’t helping at all but other months are less and some are more. Sometimes the car sits for a week and other times it is driven. 1500x15 is about 60kish Miles. That’s how I did my math which is about 12k over which is scaring the heck out of me.