Is it Better to take cash from equity or roll it into next lease?

Hello guys,

I have $7k equity in my current lease. Was not looking to lease another car but cannot pass up on the equity in the current market condition. Is it better to sell the car to 3rd party and keep the cash or trade the car in for another lease if dealer is going to give me same equity?

What would be the pros & cons to each other than having cash at hand or lowering my new lease payments? Anything else I should consider before choosing one way or another? Thanks!

Take the money and run.

There’s always a small risk of losing any up front money if you total the vehicle. More importantly, people treat equity like this as “free money”. By rolling it forward, you never see the money, so it doesn’t feel real. This leads to people overextending themselves.


That is true. Never thought about what would happen if I crash the current car or totaled it.

Damn wish I didn’t renew my registration so early. That’s a loss.

I’ve heard some places you can get a partial refund from the dmv. Worth a call.

California will not refund any registration as its tied to the car, not the person.


If you aren’t looking at another lease I would take that money as soon as possible. I don’t think this booming equity of upward trajectory on used cars is going to continue much longer. Yes the shortage looks like it will be here for a bit of time but at any given moment this equity boom can turn quickly south. I have 4k equity. I would take it tomorrow but I need a new lease and every call I have made and the numbers I am getting are absolutely insane. I am being quoted lease amounts on Toyota and Honda leases what entry luxury cars are leasing for.

Yeah were in a similar situation. I only have 1 car so if I sell it, I’ll need to find another car ASAP. I’m looking to ask brokers for me just to get a reasonable deal or maybe lease a car I’m not so keen on just to get it for the time being.

I think he’s talking about what would happen to your 7K if you totaled the NEW car. Don’t put money into a new lease unless it’s a one-pay.

Also, get a firm quote from a 3rd party before you seriously look for a new car, (and don’t even bring up the trade until you have a deal on the new car).

Talking money with a trade involved from the outset just complicates your understanding of the price for a new car, (hint, I can assure you a dealer would be more than willing to give you 10K over buy-out for your existing car on paper).

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Oh yeah after reading it again your’re right. He’s talking about the NEW car.

I always wondered about the one-pay like the Chevy Bolt deals. If you do one-pay and crash it on the 2nd month, all that money is gone right? So why would people want to do one-pay?

One pay leases are structured in a way that you get the prorated amount back. I believe the amount stays in escrow (someone correct me if I’m wrong)

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This is correct


Take your $7K equity immediately and re-lease if you have to.

The delta on your profit is much much larger than the delta on the lease price increase on new vehicles. You’re making $7 thousand dollars for something you didn’t own. 7 grand is a lot of money FYI.

Even if that “new Accord” (or insert whatever car you want) is now leasing for $360 a month (as opposed as a shitty $330 a month) you’re still way ahead of the game.

If you don’t immediately need a car and can wait till year end or early next year, even better.


Just for discussion…

Is there a difference from a tax perspective?

Wouldn’t the $7k equity be considered capital gains? Would it still be considered that if you roll it?

Depends… is the $7k more than has been paid into the lease so far? Has there actually been a gain or is this just recapturing some of the costs?

Shouldn’t make a difference

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Man… the used car market is hot. The deal I got my brother last year for his MDX now has 8K equity. He now wants to flip it and get another car. Back to work on finding a car hah

Isn’t that really the issue though? If you were able to find a fantastic deal last year, you are probably fucked this year. I personally wouldn’t sell my only car till I have locked down a deal on the replacement.

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Yeah this is the dilemma. Just got to be patient and snatch the deal when it comes running :slight_smile:

I think if one looks hard enough and is patient there’s still deals to be had. Most of the deals I’ve seen are EVs cause of the rebates. The good deals will certainly be limited this summer.

What’s the flavor of the month again? Jeep 4XE right now or is that already dead lol.

It depends. I offered 10% off at buyrate (works out to sub or roughly equal to $400 depending on small variations around $45k MSRP, give or take a cargo liner or two).

They were coming back at high 5s, low 6s … if they came back at all.