Is this a good option to look into? First of all I know I’m dumb for rolling negative equity in a lease. I rolled about $5k-$6k in negative equity into my current lease, a 2020 Silverado 1500 LT All-Star Edition, 39 month 12k year. My monthly payments are $650ish and I’m almost one year into that lease.
My wife and I have talked about short term(2-3 year) options of lowering both our car payments. One option we are just starting to look at is that she has a 2018 Subaru Crosstrek that was bought new in 2018 and she currently has around $14k to pay on it still but I’ve gotten quotes from places including Carvanna offering to buy it for around $22k.
My thought is to find a dealer willing to work with us and buy her car for around that price, and buy my truck for its current market value. Take whatever is needed on the upside of selling her car and cover the negative equity of my truck and then both of us start brand new leases on whatever we want next. I’d like another truck and she wants a small suv similar to her crosstrek.
I have no idea what you’re trying to do here, besides continue a cycle of debt and poor financial choices. How are you going to save any money by doing this, or wind up in a better situation? Your truck is likely thousands of dollars under water. Get quotes and do the math but I highly doubt this makes any sense. Just make the remaining payments and stop rolling forward negative equity (and paying rent/finance charge and sales tax on it).
IMO: If she likes the Subaru and doesn’t care, get it paid off and enjoy not having that payment. Or sit on your hands until you see a killer lease deal, and get a check for the positive equity in it. The issue here is your hideous truck payment which you’re stuck with. In 23 months start doing your homework and cut your payment in half.
You need to figure out the total cost to get out of your current truck lease is. Assume you will have negative equity yet again when trying to break the lease this soon, and that then is adding to your prior rolled negative equity. Combined, I highly doubt any positive equity on the Subaru will have you coming out ahead.
Also consider the fact that when you initiate new leases for 2 cars, you will once again have thousands of dollars due for upfront costs and whatnot, which add even more to your negative hit by going through this endeavor.
Her current terms are $460ish a month for another 3 years.
And I’ve looked into the buy out option on the truck. A couple months ago for me to completely buy out the truck was about $46K and I had gotten offers from Carvanna and some others for around $39-$41K.
My whole thought is that there are some good lease deals on trucks similar to mine for around $400 and depending on the SUV she wants similar or less payments.
In 3 years, her car would be paid off and you would be able to start fresh on a new lease without any negative equity.
I would not recommend leasing another truck right now. You are already upside down on your lease given the negative equity. I understand you are hoping to sell the Subaru and use the profit to pay off your negative equity, but I don’t think it is a good idea. My $0.02.
Are the two of you directly comparing financing and leasing payments? You know you can’t do that, right?
One leaves you with an asset worth cold, hard cash at the end.
The other leaves you with a bill for disp and any excess wear/tear.
Leasing makes sense for some situations. It is not a vehicle for repetitive negative equity cycling and it’s not a magical ‘payment lowering’ mechanism.
I understand the difference between a straight loan for a vehicle and a lease. And I understand that her car is currently worth more than my truck since we’d actually receive cash is she sold it. My whole intention with this, is that if the numbers work out correctly and her upside is the same or larger than my downside that we trade them in and start over. Like I stated we are looking for a short term resolution to lowering both our car payments.
I personally think the used car bubble fueled by vroom/carvana/rodo/ALGO etc can’t last forever, so sell her car to the highest bidder and pocket the cash.
After that, it’s your cash. Do what you want with it. Wait for better truck deals, or not. It’s your money.
I seem to be of a minority opinion here, but I see your logic. On the truck, you’re negative about $6k. On the Subaru, you’re positive about $8k. Assuming I’m reading this correctly, you could get rid of both cars and still be $2k positive and start from scratch. Assuming you want to continue leasing, this is a great idea.
I did the same a few years ago, having rolled $7k of negative equity into a new lease. Admittedly not the wisest thing, but it makes sense to mitigate your capital outlay. The reason for the negative on that car (2012 BMW 550i) was due to 3 accidents and resulting issues that were could cost more in the long run.
Exactly. Forget about whatever was actually paid into the Crosstrek to cause it to have positive equity on the loan, or your $25,350 truck lease over 39 months: once you have 0 cars, you have to transact on two new cars in a less-than-ideal car shopping climate, and pay tags/title/taxes twice.
Unless the far side of this Kabuki dance has you both signing and driving a Jetta Sport, hardest of hard passes on the express offramp to bankruptcy (where this usually leads).
Thanks everyone for the feed back. This isn’t something that has to be done. We can continue making our payments on what we have. This was just an idea on trying to get lower payments in the short term as we deal with other financial things.
At minimum keep your truck, and only get rid of the Crosstrek if you need to free up that “$8k” into cash by then doing a $0 DAS deal on some new car for the wife. But even then depending on what she wants to replace it with you may not benefit monthly at all.
Your question really comes down to if you should pay off any negative equity you have to get out of your current lease. The sale of the car is just a means to that end but doesn’t guarantee you will come out ahead with a better, new lease. Regardless of that, if you seriously want to sell the car, you would be better off doing a private sale vs. a dealer. Treat each component of this process separately to maximize your value. Generally when you try to sell your cars + work a new lease, the dealer is going to ‘give’ on one, and ‘take’ on the other aspect of the deal.
I would also point out that you’re basically saying that you want another truck, and your wife wants a car very similar to what she already has… All of the planets would have to line up right to replicate or lower the existing payments with new cars, just to end up driving something very similar to what you already have…
Not worth the hassle to ‘possibly’ save $100/mo, and getting banged for another two rounds of sales tax IMHO.
Yeah I hear ya. The day I made this post I was looking at what they’d offer for my truck and it was about a $5K difference from the previous quote I’d received.
Oh well like I mentioned before we can make the current payments we have. I’ll drive my truck till my lease is out or the value is higher then the buy out. Which hopefully will be around the time my lease is set to be up.
