Worth Rolling Negative Equity into Highly Incentivized ID.4 Lease?

Ask the Hackrs
1

I have a 2020 Volvo XC90 that has about $10k of negative equity.

There are some pretty insane incentives on ID.4’s in the area right now.

MSRP: $57,271
Selling Price: $50,000
Tax Credit Incentives: $12,850
Additional Incentives: $1,750
24mo / 20k miles
$0 Down
$226/mo

If I rolled in the negative equity, I think the payment would be in the 700s. My current Volvo payment is $850.

CleanShot 2024-02-15 at 08.41.02
CleanShot 2024-02-15 at 08.41.02335×587 24.6 KB

It seems like I’m better off rolling the negative equity into the heavily incentivized lease and being free of it in 2 years instead of still being upside down in 2 years in the Volvo.

Am I thinking of this wrong?

2

How are you 10k flipped in the Volvo?

Whats the vin and miles?

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3

YV4A221K9L1537083

~32k miles.

Rolled some previous negative equity into it.

4

It’s because he didn’t buy from you, and instead bought from a normal Volvo dealer.

IMO going from a XC90 into an ID4 is going to be rough unless they have another large SUV in the household.

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5

It’s just my wife and I and two dogs. We also have an older Touareg we use for off roading.

6

My first inclination was that this may not be real but then I realized it’s probably with $5,000 down from the state of Colorado

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7

Is it a lease or purchase?

Galves is 25k and MMR is around 26 what do you owe on it?

8

Yup, that’s correct.

9

Purchase. Owe ~$36k

10

Is that an actually offer or your dream deal? I haven’t seen anyone go 12%+ discount in CO, closest is 10% with garbage add ons making it more like 8%.

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11

So that would apply to any BEV (and PHEV?) transaction for you. It’s not specific to the ID4.

So now your main query should be looking through a well-populated section of the Marketplace such as CA or NY to see which models have the lowest MF.

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CleanShot 2024-02-15 at 09.12.53

CleanShot 2024-02-15 at 09.12.42

Haven’t got an offer yet, but it is what was advertised in email. Maybe bait and switch?

13

Oh that’s not $0 DAS. There’s a big chunk change DAS based on that fine print.

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14

Ahh, it’s $0 deposit, but you’re still responsible for TTL at signing?

15

Read the fine print. DAS is TTL plus $699 plus $27 plus a very dangerously ambiguous “fees”

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16

That actually equals $14600 in incentives, I’d take that ad with a grain of salt, especially from that dealer. You’ll be lucky to get any info from them without “coming in”. The biggest factor is the trade, you’ll need to shop that around. Build your target deal and see if anyone bites, you won’t really be able to shop the trade outside of the deal because of the payoff situation. You can go to Carmax and use that as a starting point. If the trade is clean and no issues, it shouldn’t be hard to narrow down the value, I’d just be prepared to drive it around town and don’t let them wear you down by wasting a bunch of time at the dealer.

If you know your target and someone bites, take the deal and run.

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17

Yeah, I just got an offer from CarMax for $32k

So it’s not as negative as anticipated if someone would match.

Seems like it’s worth shopping around to let the incentives soak up the negative equity and be at a lower total cost over the next 2 years. Then go into something fresh.

I don’t have plans on keeping the Volvo past the CPO warranty expiration in late 2025 if I don’t have to.

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18

Keep the charging thing in mind, I’ve got an Ariya and someone at work has a ID.4, I can charge at work or home so it doesn’t matter to me, but neither of us had over 200 miles of range during the winter. Definitely don’t want to rely on the free charging that comes with the VW.

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19

Keep in mind every shopper there is entitled to the same incentives. That’s just the market clearing price for these cars. The incentives do not exist to soak up any NE. They exist just to move this metal off the lot. So every penny of NE you roll in is a penny you’re paying above market.

You need to reframe your POV of NE as re-borrowing it. So look for the lowest cost of that borrowing

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20

That makes sense!

So, it seems the most significant piece of the equation in my mind needs to be the MF, as you mentioned earlier.

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