Hey. I have a friend who is approx $15k under in a ford mach-e who now realizes that by the time he is done paying that financing off, he will be out of warranty and all sorts of problems are his headache. He also would like to lower his payment considering he pays $800/mo and still owes about ~$33k.
I do understand there is no magic way to make that $15k of neg equity disappear but reading through the other post and asking for your guys personal experience if you somebody had dealt with something similar.
Whats the best way to get out of his situation. Does anybody have suggestions for short term (24mo) leases with extremely low MF and relatively high RV which can help him. I recently got myself an equinox EV for a relatively low effective monthly payment but it has a MF of 0.0023 which is high. Even if he were to get that would a deal like that even fund?
Does the $7500 EV fed credit help him? Any TX brokers/dealers feel free to reach out aswell.
Not that he didnt think about this when he signed but he believes paying $800/mo for another 4 years and being left with a car with potential problems and may not even be worth $10k at the end doesnt sound too appealing. I mean he just looking for options if nothings too worth it he will obviously continue with his current loan
He’s welcome to register and reply himself if he’s that interested, to share the loan details, payoff quote, where he’s gotten buyout estimates from and how much each was for, what vehicles he is/isn’t interested in.
Your heart is in the right place, but this is two or the roughest LH combined: AFAF (details are vague/missing plus the friend will only replace the current car with a green Landrover built in Halewood on a Wednesday) and “help me dig a grave and bury a financial mistake”, most of which don’t consider the entire financial picture — tax treatment, cash position (e.g. if the problem requires MSDs/one-pay/5-figure check to go away, do they have it and are they willing), incentive eligibility, doing any legwork themselves…
Double up on the payments and get out early that way. Either that or ride it out. Live with the decision you, um I mean he made and learn a life lesson.
Your friend seems to have 2 entirely different issues here. $15K in negative equity is significant, but only if he sells the car or tries to get out of it at this point in time. Yes once he is done paying the financing off he “will be out of warranty and all sorts of problems are his headache.” Again, I know these EVs aren’t cheap to repair once the factory warranty runs out, but how long is the warranty on the battery? $15K buys a lot of repairs.
Does he really want to lower his $800 per month payment and is using the prospect of negative equity as an excuse to try and facilitate getting into a new car?
Should all these recent negative equity posts be making us nervous about the economy. Who needs the consumer sentiment survey when you can simply count negative equity posts.
He doesn’t have to finish paying it off. After it’s fully paid off, it’s 100% equity.
Paying it off and achieving ZE (zero equity) status are two entirely different situations.
You realize those are apples and oranges correct? A lease typically ends with ZE whereas you’re comparing to a finance that ends with positive 100% equity.
Do the math on the same amount of cash thrown at a lease vs finance over the same time frame. Which one achieves ZE sooner?
He could find the cheapest 24mo ev lease and roll his neg equity into it, then bite the bullet for 2yrs driving a cheap ev to unwind his mistake. Mind you, $15k negative = $625 extra per month on 24mo or $416mo on 36mo. So his new lease payment would likely be more or close to what hes paying now.
When they asked “is it a good deal?” or “should they do it?” and were counseled against it, most did it anyway.
You only go around once, the heart wants what it wants, most of us have dug a hole and fallen in once or twice — BUT wanting an earth-mover to appear, fill in the hole with incentives and a 0.00001 MF, and re-sod one’s yard before leaving seems like magical thinking.
Having played the negative equity game a few times and coming out “OK” I suppose, I do like not having to worry about that anymore. Gives me the flexibility to make more stupid decisions without factoring that part in
