So in 2021 I was finally in a spot financially to get a truck I wanted. Decided to lease it for the lower payment with the plan of financing it after the lease was up in 3 years. Three years goes by, and the economy is bad, gas prices are way higher than they were then, interest rates are way higher than they were then. It would have cost me $700 a month to finance my 21 Ram 1500 Warlock with GAP and no extended warranty. I decided to roll my $9.9k of negative equity into my car finance loan. Got a 2025 Kia K5 GT-Line. Pay $780 a month for 72 months, 6.5% interest rate, and thatās with a 20yr/200k powertrain warranty and a 10yr/100k warranty on everything else. I calculated Iāll save $220 a month on gas expenses compared to my truck. Was this the right move, even though rolling negative equity typically is frowned upon? (MN)
Why not return the truck since it was a lease instead of rolling 10k of negative equity?
Enjoy your K5! Pics in the Trophy Garage
I second this - if it was a lease why didnāt you just ground it/turn it in?
Id say no, you didnt make the right decision, 720 for a k5, let alone for 72 months, yikes.
Financial suicide. Very poor decision. I genuinely hope it works out.
If I turned the truck in Iād have paid $9,900 for wear and tear and for being 42k over my mileage.
If I grounded the truck, I have no way to work. Also, I started by saying my intent was to buy the lease at the end. I was well over my miles 2 years into the 3 year lease, still thought Iād be buying it at that time.
My other option was pay over $750 a month for my truck for 6 years when it was already at 72k miles, and I was spending $400 or more on gas a month. I drive about 25k miles a year working as a carpenter.
You probably should not have leased the truck in the first place, given how much you drive.
Whatās done is done.
Iām already aware I shouldnāt have leased the truck in the first place. I knew a lot less about vehicle ownership 3 years ago. Learned my lesson with that. My post was about my current situation, not a mistake I made 3 years ago. If you can think of a better solution than what I found for a guy that had his lease ending in a month, and didnāt have 10k sitting in his bank to just cover the over miles/wear and tear, let me hear it.
You definitely did well to get something much more fuel efficient
Impossible for me to get any further in the weeds on vehicle choice as I donāt know which cars had what APR at the time.
My main goal was to get the new Toyota Camry since that gets the best gas mileage. The new Camry was on waiting list until September and turn in date for the truck was August 29th. Second idea was a Honda Accord or Civic. I was limited because banks wonāt lend over 130% of the vehicles value. If I could have Iād have gotten something $10k cheaper. I will say this, the ā25 Kia K5 GT-Line is a very nice car so far. Iām getting 35-36 mpg on the highway, even after moments of stop and go traffic. So the advertised estimates are slightly lower than actual mpg, which is awesome
The point I was trying to make is that there is no point in looking back. You already rolled in the negative equity and financed a new Kia.
At the end of the day, as long you are happy with the deal you got thatās all that matters. Enjoy your new car.
If this is the biggest financial mistake you make in your life then you are doing well. Now you know and that has more value going forward than the cost of any mistake made on this deal.
You did what you could, learn from it and just move on.
Thatās a big win IMO and a big savings for your wallet.
What was the lease end buyout price for the Ram?
Thanks! Yeah Iāll never lease again
Yeah if my calculations are correct, cost of ownership for the truck if I financed was $1,250 and thatās not accounting for tabs or insurance. With the car my insurance should be lower and tabs will be lower. Total cost for the car with gas included should be around $980
I wouldnāt go that far. If done correctly with the right deal and car, leasing can be a far better option than buying.
This is notwithstanding certain people on LHer that always seem to suggest buying the car youāre looking at, if not downgrading to the bottom of the barrel line/model for āTCOā glory.