Then the car gets stolen or totaled within a month, and bye-bye $8,000. This is such a poor decision, I can’t even begin to say how poor. Why not use the money from the trade toward the payments? You then have a bit more flexibility, i.e. if your payment is $300 - $350 a month, you cover all of the lease and then some at $300 and all of the lease except the last two payments at $350.
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Wait I’m confused, your budget is 250 but you want to put 8k down? Are you applying for a mortgage and you need the payments to be low for a lower D/I ratio?
The $8k is cash from the sale of the car being replaced. If it vaporizes in a puff of unfortunate incident, it would suck, a lot, but it wouldn’t be devastating.
As for the low payments, we’re flying fairly close to the sun as far as available cashflow at the moment and for the forseeable future. $250 is simply what’s available.
As for ‘why an Ascent’…
Unfortunately, we’ve got some hard physical interior space needs (specific dimensions, not cubic feet). Based on a couple weeks spent crawling around car dealerships with a tape measure, the entire population of US-market vehicles (discounting vans) that’ll do the job are:
Suburban
Expedition
Ascent
And the Ascent is the only one that’ll fit in the parking space, in addition to being in a whole different universe as far as pricing.
As for ‘why not buy’ - There simply isn’t room for a $500 payment.
I guess my main question is why would the apparent MF be so far out of line with the active program MF? If I know the space in which ‘why’ might exist, I know how much time it’s worth spending negotiating with these guys, finding another dealer that can cut a better deal, playing fiddly games with other cars to see if we can bring down mileage on this one etc. versus going back to the starting point and trying to rework some of the hard requirements.
Invest that $8k in equity/FI, it’s much better than using it as DAS. You can spend that 8k over 3 years instead of upfront.
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This is exactly what I said… and if you have major cash flow problems, having that $8k around, even if you’re drawing on it, is better than be at risk of losing it.
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Are you sure that the MF that you saw online is relevant to your region?
If so, perhaps you’re approaching the deal wrong (IMO). Usually when I go in (if I go in), I let person know the stock number of the vehicle I’m looking at, the lease term, the MF and RV, and the payment I’ve arrived after factoring in eligible rebates (along with the lowest selling price I could find in the region which is what I based my numbers off of). That generally puts them on the backfoot and stops the shenanigans (but this heavily depends on your numbers being right, otherwise you look like an idiot). If they tell you, whoa, that number is laughable or start laughing at you, just ask them to show you where you made a mistake as you love to learn.
Just my 0.02, I think you’re making a mistake in terms of the downpayment and hear me out as to why. I get that $250 is your number and it’s non-negotiable, and that’s fine. Here’s two scenarios and I’m making up numbers but it’s to show a point. I’d welcome feedback from anyone else if they see a flaw in my logic:
Scenario 1: Your Approach:
Down payment: 8000
Payment: $250 x 36 months
Total paid after 36 months: 17,000
Car Totaled After 9 months (god forbid), Total paid: 10,250
Scenario 2: Different Approach:
Sell car to dealer, vroom, whoever: 8000 in hand
Down payment: 0
Payment: 472 (250 + 222 (the 8000 from the sale divided into 36 months))
Total Paid after 36 months: 17,000
Car Totaled After 9 months (god forbid), Total paid: 4248
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As everyone else has said why not take the $8k of equity, put it in a bank account and then draw from it each month for your lease payment. It’s the same thing as trading it in as a downpayment but no risk in case of an accident/totaling your car.
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That is not how it works exactly. You do not loose the down unless the totaled out value is below the payoff amount. If you do put the 8 k down it probably would not be totally lost. Some if not most yes, but you need to consider the payoff on a car with 8k down (insurance company will pay retail value plus sales tax) will most likely be lower than the payout.
It doesn’t matter. If OP is that cash poor and sensitive to the payments, losing anything is not a wise idea. I wouldn’t want to lose anything myself.
I’m just going to agree with pretty much every one else. Stick the money in the bank. Use it to draw the payments from and boom, you’ve got 23 months(ish) of ‘free’ $350 lease payments.
Over the 23 months of ‘free’ lease payments, you stuff your original $250 in the same account and boom again, you’ve got $5750 in there which you can use to pay down the last 13 months of the lease and still have a bit left in there for whatever you please.
Yes it’s a bit messier, but it’s the least financially risky which sounds like it would be welcome right now.
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You know, I literally ran this exact concept through a spreadsheet and the math didn’t even come close to working out. Couldn’t figure out why not, which should be a key indicator that something is seriously wrong.
Did it again and it works out now. Guess I made a typo somewhere. Will spin off another Ally account and do that.
And lest anybody actually worry we’re buying too much car, if something went wrong here, there wouldn’t be existential trouble. Moving medium-term goals around, yes. Annoyed, yes.
… If we can find a reasonable MF, anyway - the difference between where the dealer is saying they need to be at and where we need to be is $175/mo. And, yes, the dealer is sticking by their quote.
Call some other dealers and get some other quotes.
Where are you based? If you’re on the east coast, you could also just go use a broker…$324+tax.
Thank you sir!
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Just buttering you up to convince you to do some CA Volvo dealz 
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Dumb question here - but why is the down payment gone in the event of the car being totaled? Does insurance not replace the car?
Nope, insurance gives your fair market value of car. Since most cars lose 10%-25% when you drive them off the lot, you are usually going to lose most of your down payment, especially if you car totaled/stolen early in lease.
This is generally more true with luxury leases where depreciation hit is hardest. If you get a good dealer discount on Subaru you probably wouldn’t lose all of your down payment but you would almost certainly lose some of it.
This is where gap insurance would come in right? I thought some insurances require gap coverage for events like this.
Gap only makes the bank whole (difference between actual value and payoff). Your downpayment plays no part of that equation.
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