Need advice since I’m totally screwed and don’t know what to do. I have a 2011 Audi Q5 with 94k mi. I owe $20k but Carmax says it’s only worth $10k. Audi dealer offered $9500. I’d keep it but the car is burning oil and sensor goes off every 1000 mi. Audi forums say this could lead to big repairs. Thinking of trading car in, using cash to pay towards financed amount and rolling the balance into a lease just to get out of it. Any thoughts? Is this a bad idea?
It would depend on how much cash you could use to pay down the $10,000 in negative equity. Most lenders will not let you roll that much negative equity into a deal, and even if you could, assuming no MF, it’s going to add $278 to your monthly on a 36 month lease. Do a search, this problem comes up quite frequently. Unfortunately for you, there is no magic wand that is going to make this problem go away.
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MBFS - (Benz financial ) - guidelines for LTV (loan to value) are very generous. Find a 2017 e class with 20% off and you will be able to roll most of the 10k into a leaae. That is if you want to stay with a luxury car.
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If you roll it into a 3 years lease in 3 years you’ll be free and clear.
If you don’t roll it in where will you be in 3 years?
94k miles…I’d say you’ve gotten MORE life out of this Audi so consider the 10k “negative equity” a great ROI for the miles you put on it so far.
Roll the equity into a cheaper lease to get this thing out the door. ex. $99 lease $0 drive-offs + negative equity of $278 = $378 ~ $400 a month for 36 months.
Only thing concerning me here is your mileage requirements. Is a lease really a good move for you if you drive this much?
Would a lender really let you roll over $278/month on a $99/month lease?
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Yeah, I was going to say the same thing. I think you’re going to have a hard time finding a captive willing to do this, even with perfect credit. Maybe I’m wrong though. I can’t see a lender willing to roll over negative equity 3x as much as what the lease payments will be over 36 months.
Just a thought - if you have decent credit you could take out a personal loan for the $10k negative equity which should have a 60 month payment of around $100. Then you could take the Carmax offer and negotiate your next lease on its own merits. It’s an additional amount of debt and another monthly payment, but its much less impact than the almost $300 monthly that would be rolled into a new 36 month lease if you could even get that amount approved by a lender.
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No. Throws off the LTV ratio. Typically around 7k is the max negative before you start having to put money down.
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isn’t that only $6000…not including interest?
You are correct, that does not add up to $10,000. Additionally, you’re probably going to have a lesser MF on a lease than the interest rate for the personal loan. Also, if you spread it over 5 years instead of 3, you’re going to pay more interest. Not a financial advisor, but if you can stomach the extra $278 a month on your lease and it doesn’t destroy your LTV: I think that would be the more financially sound solution.
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Yep - sorry should have read around $200. And next point is good as well - a promotional low MF on a lease will always be lower than the rate on a personal loan. But just trying to propose an alternative that increased the OPs chances of getting approved for financing. As others note, not all lenders will consider rolling $10k negative into a new lease.
Will Audi let you put the $10k on a credit card? Before everyone jumps on me…
Get whatever credit card you want with 0% APR for 18 months or as long as you can and divide the months into $10k and see what it comes up with. If you can do that, then you wont be paying interest and like others have said, you can negotiate for the next car on your own. If not then i’d say to roll as much as you can into a lease and be free and clear in 36 months (either way you are going to end up paying for it 
)
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Thanks all for the advice. I can squeeze 5000 cash towards the negative equity and see if a dealer will help me roll the other 5k into a lease. Gonna scan the forum for lease deals now. 
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Hard to leave luxury cars once you’ve driven them for a while. Gonna try to find another luxury lease
I used to drive alot more. Now I’m driving about 7000 miles a year.
Depending on discounts on the vehicle you pick will determine how much you can roll into it.
Rolling 10k negative equity into anything is going to be a bad idea and cost you a lot of money. Take it to a good mechanic and see what is wrong with the car and how much it would take to fix. You are being scared of an unknown potential downside. This is the downward spiral of debt that will not get you ahead in life. Put 1-2k into an engine fix at an independent (non dealership) mechanic, drive the car for 2-3 more years and then re-evaluate the rent vs buy finances at that time.
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With Honda, Toyota or more reliable cars i would totally agree with you, but this is an Audi! This car will go from one trouble to another (electric system, engine, brakes, tires etc.) . If it is the 2.0turbo the problem even worse.
As other member suggest and op also got a plan, put 5k cash toward the negative and lets the dealer soak up 5k into the deal. Try to get cars with low mf too. Imo Infiniti qx60 is a good choice.
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I ran a very large Acura dealership - #1 in SW in 2003. We did many, many leases like you are suggesting.
The “Carry” or total Cap Cost Allowed was 110% of MSRP on an Acura Lease.
So on a $45,000 car, I could discount it $5500 and absorb $4500 in negative equity. Discounts like this obviously required a cold product with incentives or dealer cash. As noted, Mercedes is good at this currently. I have absorbed as much as $9000 in negative equity.
Here are your benefits…
Trade the car, depending on your state you’ll save some sales tax.
If God forbid the lease car is a total loss, the gap insurance will pay off the remaining negative equity
A total could be from an accident, theft or natural disaster.
If you find something nice and build in maintenance - the payment is all you’ll be paying + insurance and gas. As others have noted, you are free and clear in 36 months (risking someone else’s money)
DO NOT take out a personal loan. Put as little money down as needed to remedy the situation.
I wouldn’t attempt to fix the car. Labor rates on German cars are at least $100-$120/hour. Parts are usually 200-300% more than domestics or japanese. You will be throwing good money after bad.
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