Reasoning about positive equity

Ask the Hackrs
1

I have several thousand in positive equity on a vehicle and between going back and forth with dealers, calculators, and numbers the last week or so my brain is a bit foggy.

How would you suggest reasoning about positive equity particularly when deciding which lease term to go with? Would you leave it out of the equation entirely?

For example, if I were to apply the equity as a discount of the sales price (which it is not), this would make shorter term leases much more favorable over longer term leases when without any equity consideration the longer term lease looks more favorable. Any words of wisdom?

2

take the equity check in a separate transaction

and lease/buy whatever car you want in a different deal

2 Likes
3

I most likely will have to anyway as the purchasing dealer and the dealer I am selling to are likely going to differ. Just wondering if I should factor the equity in to pros/cons at all.

4

if you add your equity and total the car in the next month some leasing companies will take the money and not give you anything that alone is a deal breaker

the pro? lower payment

5

I might not be explaining myself well - the lease company will not be factoring in the equity at all to the new lease.

I am more of asking if I should factor equity into a decision between a 24 vs 36 month lease, all else the same.

6

are they giving you a check for the FULL AMOUNT of your “equity”

7

The new lessor will have nothing to do with my equity.

8

so you wanna factor your equity meaning give a large down payment?

9

No. You are not trolling me, right? I am looking for some feedback and perspective.

The equity will be realized as a check directly to my bank account, not applied to the new lease in any way. However, I am trying to understand if I should factor the equity amount into the pros/cons of a 24 vs 36 month lease. Why? Because when factored as a reduction of the total lease cost it makes the shorter (24 month) lease look more favorable vs when it is not factored in the 36 month seems more favorable.

10

One has nothing to do with the other. Get the most you can to sell your old vehicle with equity, evaluate the new lease independently.

5 Likes
11

Yeah, while typing out my replies this seems obvious. I appreciate the clarification. Long day.

12

This topic was automatically closed 60 days after the last reply. New replies are no longer allowed.