I do have some sympathy for people who made bad decisions at that point. Thinking back to LH during that time there were plenty of threads about how gas prices were never coming back down and car makers were never going back to the old ways of excess inventory and big incentives so prices/residual values were never coming down and trade in value would always stay high (not us mind you, but other).
But then again the people running into problems could have all avoided them by (gasp) buying a sedan or compact Japanese SUV. Have we ever seen an âunderwaterâ thread for someone who bought a Corolla/Camry/Accord/Civic/CRV/RAV4 and held it for a few years? Even if you paid over MSRP in 2022 you would be fine today.
Looking back, one thing we did get wrong sometimes was advising people to buy and not lease cause the lease deals just were terrible on many cars. That worked well for me (I bought a 21 Jetta in October 2021) but if you were buying an EV or expensive truck you often would have been better off with the crappy lease deal. Sure it might have been $1k a month for a $60k EV or truck but at least at the end of the term you turn the keys in and start fresh.
The problem with all these threads is that the answer is either stay the course and pay off car until there is no negative or tightening the belt + drive the cheapest EV you can find, which is often pretty bare bones. People donât want to go down from a nice car to a base ID4 or fiat 500e. Itâs not irrational and the People who end up in these situations, by and large, care more about what they than the average person.
We all like nice cars for best possible deal. But most experienced people here accept what the market is giving. Whether thatâs owning and holding a lower trim Jetta for 3.5 years before getting into a $70k Acura EV (me) or leasing a 3 series or Q50 when they really wanted a 5 series or Q70 because the smaller car is 1/2 the price.
Honestly the loan is pretty good its 0%, he was off on the neg equity he had since he owes $35k and the car is worth about $25k so still about $9000 under. But he still has about 15,000 miles left on his warranty. Looking at my Chevy Equinox EV which I wouldnt say is barebones and honestly is overall a better car. Bigger battery, more range, more features. If he does get into a lease rolling in his negative $9000 in and goes net 0 after 2 years.
Its either that or he keeps paying his car for another year and a half then goes net 0 and gets out of it.
Same answer. Why eat $9K in negative equity that is financed at 0%? Keep the current car until he can get out even. If it only takes 16 months, that is another $13K spent. Vehicle should still be under warranty or close to it. Sounds like your friend just wants a new car because the payments on new EVs are much lower than what he is paying to own his.
Youâre speculating about what might happen after the warranty runs outâŚ.what âall sorts of problemsâ have occurred so far that were addressed under warranty?
It sounds like a bad decision occurred when this person purchased the car. Donât double down on a worse decision, stick with that car until youâre break even at least. Itâs silly to act on some unknown and unlikely future mechanical problem by creating a known and certain larger financial problem.
He is also indeed a good âfriendâ to be spending so much time on here trying to fix their negative equity situation and the âbad decisionâ you described.
In 2007 while every âexpertâ was 10000% positive housing would never crash because reasons, there were signs everywhere it was going to. The most obvious would have been people looking around their neighborhood and counting the number of for sale signs. It went from almost none to a few to a lot in a very short period of time.
Noticing stuff like that made a lot of people a lot of money.
Most of the people that made real money in 2007 or so on the housing shorts were in those positions a good bit of time before the for sale signs started going up everywhere.
Some were, some werenât. It was obvious the whole thing would crash early on, youâre right. Most people didnât want to believe the obvious. Once it started showing up on the ground, a lot of people woke up. I sold my house in July 2007 in part because of it. I wish I had shorted some mortgage companies as well. But oh well.
And everyone told me I was crazy to do so because Iâd be PRICED OUT FOREVER!! Yeah well, didnât quite turn out that way.
Anyone have suggestions on the best cars to lease for someone with negative equity. I have about 8k of negative equity in my leased 2022 Jeep GC 4xe and I want out of it. Have about 17 payments left.
well unless you want that 8k to turn into ~11k after taxes and rent charge then be prepared to write a check for 8k.
turns out a lot of people who want out are prepared to stay put once they realize its a choice between writing a big fat check or making an extra 11k in payments on top of the new car payment.
Ford MME: buying was the better decision. But thereâs nuance there. Selling during the peak was obviously a great decision but even if I hadnât I think I would have been fine. My effective over 4+ years would have been in the 3s. I think for the average non-hacker thereâs some benefit to being insulated from market volatility and not having to transact as often.
Model Y: buying was NOT the better decision. That doesnât necessarily mean I would have been better off leasing it. Should have never taken delivery in retrospect. Could have kept the MME instead or even without that privilege, buy a beater (there were some used cars that werenât egregiously overpriced even during the worst of that era) or order another Telly at sticker.
Look at how much those MY 2022 cars are worth today compared to their original MSRP. Looking back I should have financed a RAV for 5 years instead of leasing a $60K+ Wrangler.
It is difficult do do, but you get used to it. I had a highly optioned 2019 TRD sport LB Tacoma, then a very highly optioned 2022 4xe Wrangler. Now I drive a zero option â23 Tacoma SR V6 that had a $35K sticker price.
The high interest rates and overall decent amount of content that manufacturers put in their cars as standard equipment has made me rethink which trim level of whatever car Iâm thinking of buying.
3 years ago when we bought my wifeâs â22 Highlander XLE at MSRP I considered the Limited as well. For whatever the difference in features, it wasnât worth it to me to justify paying a higher price with zero discount.
I donât have the same memory for numbers as others on the board, but I think (1.) ICE Wranglers have pretty high resale value; (2.) only the Wrangler 4XE leased well; and (3.) other other cars youâve listed historically donât lease particular well, either.
For advanced buyers/leaders either way is fine. We were never going to get killed. Was more referring to the average buyer who wasnât gonna negotiate a great price and wasnât flexible with makes/models/trims.
But yes, for us there were of course times when buying was right and when leasing was right. In 2021 I availed myself of both options.
With the exceptions of luxury EVs most buyers wonât have much or any negative equity after four years. The problem is people buying new cars and wanting our after four months.
I like nice cars so Iâm not going to be Dave Ramsey here. But yeah, financially the best option is almost always going to be buy a Honda or Toyota sedan/compact SUV and own it for 4+ years. Keep a Corrolaâs Carfax clean and after five years you can sell it and easily be looking at a total cost of ownership under $200 a month.
I like nice cars too, but with the mileage that my wife and I both drive (22-25K each per year), it is difficult to justify the price of a ânicerâ car that depreciates rapidly and costs a significant amount to maintain. Plus I have to pay a personal property tax on my cars each year to the city I live in. The tax assessor hasnât caught up to the fact that the $60+ K Wrangler I leased in 2022 is now worth $26K. The last tax bill I got was for over $900.
I agree with 99% of what youâre saying. Just not the part where a $1,000 lease for a $60k EV or truck would have made sense, even during the worst of the chip shortage era.
