We’re a 2 car household that was only leasing for 10+ years. Coming out of covid into pricing hell, we ran out our lease extensions and ended up buying instead. I had to go back in office full time before my wife, so we bought an X3 premium and held off on a second. I ended up with a great deal on a Model Y, so she got the X3. I’m happy with my Model Y, but my wife hates the X3. I’m looking to find something to get her out of it and back into a lease that she actually wants to drive. Based on some offers shopping it at Carvana, Vroom, ALGo, etc, its looking like we have 7-9k negative equity.
I already know, moving negative equity around, not a sound financial decision, I get it. I’m fine with putting some money down to chip away at that negative and i’m also good with a payment up $750-$800. I’m just trying to figure out what the best leases to target are with such a significant amount of n/e. Also, I don’t NEED to get out of the X3, so we can hold on to it as its just a luxury at this point, but there’s the old adage “happy wife, happy life”.
I’m happy for any recommendations. (I’m in NJ, but willing to pick up within a reasonable ride)
Ideally something with a lot of incentives and a low MF, since you’re also paying tax and rent on the negative. In NJ I’d be looking for an EV: no sales tax and incentives (though the MF is usually absurd).
Was thinking the same. The $7500 and no sales tax pretty much kills all of the negative equity. She doesn’t really like to drive my Tesla, so it would have to be something else. I worry about charging without having the Tesla supercharger network, but with her driving habits, it shouldn’t be a big deal.
I do have a question though. When looking at deals in the marketplace, generally speaking, if I find something with a dealer discount (say 8% or $5k off) if I backed that out to 0% and upped the down payment, would that typically reflect an actual deal or would the MF get marked up because of the negative equity?
Like any deal, I’d negotiate the terms on the new car first without the trade. What you need to finesse here is your credit will support it and you will write a check for whatever amount to cover meet the advance, but your goal is to bury the negative in this new lease. Without a preexisting relationship with the dealer (your own or through a broker), it could easily go sideways.
I was in a similar boat once - I had a lease that was unsafe to drive but I wasn’t able to jettison using the lemon law, I had the ability to write a check but for 10 different reasons I didn’t want to. I talked to a lot of dealers where they were willing to do this, but wanted to get paid on it more than I thought was fair (either in rate markup, reduced discount, or buying products I couldn’t cancel), I finally contacted someone who previously sold me a car elsewhere who was open to doing a mini the week of thanksgiving. It wasn’t easy.
Expounding slightly on the above: sounds like you need to shop a vehicle, not a deal. Speaking from experience, getting her into something because it is a deal that works will only lead to compounding the problem.
We’ve been in this dilemma for the past 2-3 months and sticking it out for now (among other reasons) even though we can cover the negative equity. Since you don’t need to get out of the X3, either try to sell it privately to minimize the negative equity or hold on to it.
If you really want to get out of the car, follow the above posters advice on shopping a new car that your wife will like and not just a deal.
Warning, part of it is going to sound nitpicky. She doesn’t like the color (interior or exterior), which goes back to her taking the car over instead of picking it out herself. She’s not loving the shape of it either.
Then the other thing is we have been in the leasing world for a long time and this is one of the first cars we actually financed. When we past the regular warranty, we purchased BMW ultimate care plus to deal with maintenance and extend the warranty because I got it for less than the cost of replacing the front an rear brakes, which needed to be replaced. She doesn’t want to be left without the warranty and the closer we get to 50k miles, we’re going to have to decide if we want to extend again or not (we’re at around 45k miles). She really doesn’t want to spend more money extending again.
I asked her what she wants to drive already and she’s really open. She loved her old RDX, she’s had a Grand Cherokee in the past that she liked, the TLX she liked also. She likes the benefits of an EV, but not keen on the Tesla. I honestly may end up just holding on to it for a while, but I figured I would see what was out there.
You’re 100% correct. I’m probably coming at it from the wrong angle. My only concern was taking her to test drive a few things and none of them end up being realistic in her price range. I’ve been tracking broker deals here to get a general idea of deals that are out there, especially consistent deals off of MSRP that are pretty common amongst different brokers, adjusting their calculators to see what generally fits my scenario and having do some research on those. If I can get that list down a bit, then we’ll go test driving.
Luckily, all things said, I’m in a situation where I don’t NEED to do anything. At this point its just a nice to have, so if I can’t find something that fits awesome, if not, we can stick it out.
I’ve been looking into a private sale, as this would only leave a couple grand in negative equity, but I’m not 100% how that would work because of the loan. I’m assuming its a fairly straightforward process, where I would agree with the buyer on a price, I mail a check for the negative equity, they give their check for the purchase price and they get the title, but not certain.
I could possibly do that, but not sure of the tax implications. I know I would definitely need to pay back the Charge up NJ PoS credit that I got, but not sure about the $7500 tax credit because i’ve had it for less than a year.
Since you have a lien on the car, pay it off and get the title, it will be much easier to sell to a private party. Your suggestion would work but buyers don’t like waiting around for the car title.
Generally, you don’t need to repay Fed tax credit unless the car was purchased for resale. No idea re NJ…
Don’t suppose swapping the cars would work for you and Mrs? Would she even want to drive the Tesla or you the X3? Sounds like you could get out of Tesla with less damage to your wallet.
I can, but then I would end up paying taxes on the purchase would be over $2k. It may be worth it in the long run, depending on what I can get for it privately…
You’re right on this one. I technically can pull the money out some stock holdings if I really needed to, but this is a want, not really a need. Also would have to pay tax on the purchase. Around 34k
I just want to say that I don’t want to come off like this is a “I have an answer for everything” pose because I’m genuinely looking for feedback, I’m just trying to reply to every post and appreciate all of the suggestions.
As @Qbrozen said, shop for a car for her, not a deal. There are a lot worse things in life you can write a check for than negative equity. Fortunately you are in a position to do so.
Not that it matters because it seems like your wife has already made up her mind, but that negative equity check you are going to write is going to be way more than any out of warranty repair unless you need a new engine or transmission for some reason.
