Limited Credit Hist. w Stellar Cosigner & 8k in Neg. Equity

I’ve been lurking this site for quite a while & am glad to finally be able to be a member & hopefully gain constructive feedback. Here’s my situation. My first & current vehicle is a purchase with a cosigner (bought cpo altima 65k mi) I’m underwater $8000 due to having someone rear end me causing an accident report & the car is approaching 100k mi. I understand this isn’t the ideal situation but I find it as a great way of getting a new car while paying off the balance on the altima, love the flexibility of leasing vs traditional financing & not having to worry about a service bill at inconvenient times.

$8000 negative equity
$270 current note
Would be comfortable @ $400-$600
Limited Credit w Stellar Cosigner
12k mi @ 36 mo
Preferably a luxury brand but pretty open as far as make.
Current vehicle has no unrepaired cosmetic nor mechanical issues.

I don’t have much credit history, just 2 CC’s & this open auto. Everything is in good standing, good payment history.

What would you say be my best route on leasing?
Input would be greatly appreciated, thank you.

Your negative equity alone is at least $225/month, which only leaves you with $175-$225 for the new vehicle. I’m pretty sure you aren’t getting any luxury car. You might not even be able to get approved for any lease since the negative equity would be 50% or more of the entire monthly payment.

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I would get a good $2-3k beater and use the extra money you have to clear the debt, improve your credit and come back in a few months. Jumping in with 8k negative and poor credit is a terrible idea.

I’m assuming the negative equity is due to not being fully insured on the Altima?


Thanks for the reply, I too thought of buying a second vehicle but after looking at maintenance cost, insurance & gas, it just makes more sense to channel my funds into one vehicle. The vehicle was repaired & has full coverage. It was a fender bender but shows on the carfax thus hindering it’s resale value, that & it’s mileage. 100k mi on a 13’. I wouldn’t necessarily say my credit is bad, just not well established. I do have this open auto with good payment history, so there’s that.

Like said above with that much negative you probably wont get approved. If you want out you’re probably going to have to pay off the negative cash or at least most of it

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Thanks for your input, Jon. Based off that, a more realistic lease will be somewhere around $400-$500 before my negative equity correct? I was taking this into account as well which is why I thought a luxury make would be a good candidate because of their LTV vs my negative equity. But I’m fairly open to different makes, just not Nissan lol.

Well that’s a better situation then as you at least still have a decent, running vehicle. That $8k negative is still a huge impediment though. What’s your interest rate on the car loan at the moment?

I hear that, if leasing doesn’t work I rather much buy a cash car than put down on a purchase. So this is my second route if unable to obtain leasing. My current rate is %5.05

How the hell are you $8k under water on a used Altima? You must have WAY overpaid. A carfax ding can be roughly a 20% hit. Again, though, it is a used Altima, so 20% is not anywhere close to $8k.

  1. How long have you had it?
  2. How long is left on the note?
  3. If it is running and driving fine, why the urge to dump it now?
  4. Hiw many miles per year are you putting on?

Since you can afford $500/mo for something else, start paying $500/mo on your current note. Assuming you owe $12k on a $4k vehicle, you should be at break even after roughly 2 years.


Keep on paying your loan and pay more than the monthly. Adding $300-400 monthly can lower your neg equity by $4-5k in a year. Paying extra also raise your credit score faster.

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If you can afford to buy a car cash, sell the Altima and cover the negative equity. It is very unlikely that it is actually $8k. Then start fresh with a new zero down lease.

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What kind of credit score have you got now? If it’s over 700-ish and you have a solid income you could try and lease a vehicle that has a low interest rate at the moment and actually reduce the interest rate that you currently have.

For the negative equity amount, where did you get the vehicle quote from? Did you check vroom, carvana, etc for quotes? You might be able to get a little more money out of the Altima. Selling privately will probably get you more as well.

If the Altima is running fine I would try and refinance the loan to a lower interest rate and keep the vehicle for another couple of years. That would be the most frugal path in your situation, but that’s easy for me to say.

Nobody has mentioned the fact that every car has a “max allowance” which essentially caps the amount of negative that can be rolled into the lease.

You need to find something with a significant amount of rebates on it to help close the gap between the max allowance and the rebates.

Get out of that Nissan before its worth nothing or gives you a hefty repair bill.

Personally I would go with a 2018 ILX (get luxury aspect of acura with the same payment as a civic plus I think close to $5,000 in lease cash this month)

You’ll have peace of mind for the next 3 years knowing your car won’t break down and that after the 3 years your negative will be gone. Then once the ILX lease is done then go for more an upgrade.

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This. I don’t get it. So it’s a 2013 Altima bought at 65k miles. A 60mo loan at $270/mo is a vehicle sales price of ~$15k at 5%. But OP has been paying on that loan for a couple of years - there is absolutely no way that the vehicle depreciated by ~$10,000+ in 35,000 miles unless it was driven into a bridge abutment and not repaired.

Also, in my experience, I’ve been able to sell used vehicles private party without any negative affect from prior accidents as long as they were fixed well from a reputable shop with a warranty. I understand that it’s probably not the same for dealer trade-ins, but we’re talking about a minor fender bender. I’d buy 20-30% for a salvage/rebuild title but not for a fender bender.

Regardless, the solution is not to double down on that mistake and finance the negative equity AGAIN into yet another car loan or lease. If you’d even get approved to roll that much in, which is highly unlikely.

OP - what is current payoff and Carvana/Vroom quote for your Altima? Is this a 2.5S or a 3.5SL or what?


Based on my memory, it will be hard for you to be approved by any financial company (lender) if your neg equity is more than 20% of your total payment when financing a car. I don’t know this math is the same as leasing. Anyhow, it is not a good idea to roll such a huge neg. equity into a lease. Will your current vehicle really cost you more than 8000 to maintain in the next 3 years? If not, just drive it for another 3 years and get into a new car with a much cleaner hand.

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Thanks Force.

My thought process exactly, we’re on the same page. Thanks for your input.

Thanks for your input. The damage is showing up as moderate damage. I did have it appraised at a dealership a few months back but to be fair, it wasn’t a Nissan dealership nor Carmax. Current payoff is $11,000. I’ve been paying on it for 4 months shy of 3 years. Original amount financed was around 16k if memory serves me right.

I’m not looking into getting out of the vehicle solely due to costs, although it does play a factor. I personally am not in love with the vehicle. I’m in a substantial better income position than I was when I purchased this vehicle. Not only that but the idea of continuing paying towards such depreciation gives me the chills. I rather cut my losses now & pay the remaining balance with a lease that’ll not only give me a piece of mind but also an exit from being married with depreciation.

You should take advantage of your better income situation and make larger payments on your Altima. Make principal payments for 300 to 400 dollars a month for the next year and you’ll be out of the car sooner and in a better financial spot.

Best advice here is to simply pay off the existing loan as much as you can, any way you can to eat up that negative equity. It’s easier because the car runs…

It just sounds like to me that OP is going to make an absolute terrible Financial decision because the Altima doesn’t tickle their fancy. I get it, I’ve been down this path before myself and I’ve been paying for my financial decisions for a decade now.

Don’t be like me. Be smart. Pay off what you owe if the car runs and in a year or two years you can get into something nice. Mind over matter.