My situation might be weird but basically there is a 50% chance I move out of the US back to Canada in 9-12 months. And I need a car. I’ve come down on leasing as maybe my best option. Did some math with financing and even if I was able to sell the car to the same price in a year (unlikely) I would lose quite a lot in tax and interest. I could keep the car and import it to Canada but it would need to be paid off before importing and there would be duties and taxes to pay.
So here I am looking into leasing. My budget is 400$ and I’m looking for 15k miles per year. I’m not trying to get the nicest car at the lowest price (not against it though). Just seems like a lot of work. If the lease I can get at the car dealership is not fleecing me, I’m okay with it. My main question is how hard would it be for me to get rid of a lease in 9-12 months? I’ve read some contract would require me to stay as the main leaser and be responsible if whoever I transfer it too totals it, that is a big no for me. Especially if I’m not going to be in the country. So I’m looking into the feasibility and cost of getting out of a lease in 12 months.
Return the car: Probably insane cost and not worth it
Buy the car, then sell the car: Seems very complicated and highly dependent on the type of contract
Transfer the lease: No idea how easy it is and the associated cost. What would be easier to transfer in 12 months? 12 months remaining or 24?
To note that I have liquidity to do one-pay lease.
There’s no viable 12-mo lease so either you need something that’s likely to have equity in a year or a 1-pay that’s cheap enough that you can forgo the balance.
If you can get a fairly cheap 1-pay on a Altima and pay less than $5k for 18-mo, then after 12-mo you’re not too far off your $400/mo target.
Otherwise take a gamble on what may have equity. Or at least unlikely to have much if any negative equity.
I am in a very similar situation whereas we may leave the country in 12 + months or so while needing a car right now.
I also looked at purchasing solid resale value vehicles such as popular Toyotas and Hondas but who knows what the market will be next year (certainly not 2022 for sure) and as you mentioned the taxes also are a negative while used values on some cars are still too high. However nothing beats the flexibility of a purchased vehicle.
That being said I like the one pay suggestion of the Altima (that car wouldn’t work for us right now) or any other Nissan (I was too hesitant on the 18 month time frame and missed the Jan and February numbers on Pathfinders)
Other suggestions is to perhaps find a lease transfer that would be maturing around 12 months from now or get into a brand where lease transfers are still allowed without keeping you on the hook (ie BMW…)
As for equity any suggestions on what may have half decent numbers in a year would be welcomed from my end.
Thanks for the answer. When looking for something that might have equity in a year you mean something that will not go down too much in value right? And in a year, I call the dealership and say to them I want to sell the car back to them early. I owe them residual value + remaining monthly payments and if that together is smaller than what they buy it from me they give me the difference but if it’s higher I have to pay the difference?
Following that logic, a 2022 or 2021 used car on a lease could be a good idea since the equity goes down much more in the first year.
With your 1-pay example, let’s say I get a 18 or 24 months one-1 and leave the country in 12 months, can I still transfer the remaining?
I think that’s technically buying out the lease and then selling the car to… whomever.
I’m not quite sure what you’re trying to say. Depreciation on a leased car is assessed equally per month, even if it’s not the way it would actually occur if you were to compare “actual” resale value vs. original MSRP at any given point in time.
Last I checked, the original leasee (you) is still responsible for any issues that may occur w/ the car, even if you transfer the car to someone else.
