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Old 11-29-2012, 01:56 AM   #1
javi
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Upside-down on car, get a lease?

So I made the foolish decision to buy a high end sports car some time back and have reached the breaking point. I dont have the capital to refinance so I'm looking for a more aggressive way to bail out. Would leasing a new car be a quick and dirty way out of debt? After negotiating the price of the lease, I can take on the negative equity from my current car and still come out with a monthly payment roughly half of what I'm paying now. Coupled with lower gas/maintenance costs and I'm saving in a variety of ways.

Sure I'll still be upside-down on the lease as well, but at a much lower cost, and then be able to walk away from it completely in 36 months. I wont have a car at that time, but I'll be in a much better position to make an intelligent choice when it comes time to get another car, and of course the immediate savings will help get me out of hot water.
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Old 11-29-2012, 02:12 AM   #2
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It all depends how much upside down you are on your current vehicle. Also what car you looking to get because if its to cheap and you are too much negative equity on your current vehicle you might not be able or you might have to put a lot of money down.... So give me some more info what car you have now and how much you owe... I might be able to give you some options I used to work at a dealer
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Old 11-29-2012, 03:25 AM   #3
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Re: Upside-down on car, get a lease?

when the lease ends you will have no car and have to buy a car with noting down and be upside down again.
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Old 11-30-2012, 12:22 PM   #4
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Re: Upside-down on car, get a lease?

I think this might make sense. We need more info:

-what make/model car do you have
-what do you owe
-whats it worth
-interest rate/terms
-payment


THen what will the insurance and maintainence difference be with the new car?
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Old 11-30-2012, 12:28 PM   #5
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Re: Upside-down on car, get a lease?

Since this is the business, finance and investing forum...why not get a $4000 car and consider living within your means? That's by far the best financial option.

You're paying a ****load of money to have a new car you don't need. If it's about your pride, try thinking about next year's pride. No one likes a broke ass loser. If it's about girls, realize that contrary to popular belief, most hot girls prefer older character cars to new sports car - it's just a matter of picking carefully. Save the new/sports car for when you're balding (are you balding?)
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Old 11-30-2012, 12:30 PM   #6
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Re: Upside-down on car, get a lease?

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Originally Posted by Truthsayer View Post
Since this is the business, finance and investing forum...why not get a $4000 car and consider living within your means? That's by far the best financial option.
I was going to suggest the same thing, except I would recommend a $1000 Geo Metro.
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Old 11-30-2012, 07:48 PM   #7
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Re: Upside-down on car, get a lease?

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Originally Posted by Truthsayer View Post
If it's about girls, realize that contrary to popular belief, most hot girls prefer older character cars to new sports car
blasphemy
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Old 11-30-2012, 10:08 PM   #8
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Re: Upside-down on car, get a lease?

Most girls don't know anything about cars.

Girl: Wow is this the new Infinity? I love these cars
Me: No this is a 8 year old Chrysler.
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Old 11-30-2012, 10:12 PM   #9
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We can go as far as saying people don't need cars at all, so walk and its free. I like having a nice car so I understand. If you can afford it then its fine.

Op can't afford the sports car and doesn't want the payment. So now we have to find out how upside down he is and what he pays and what he wants to spend.
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Old 11-30-2012, 10:15 PM   #10
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Re: Upside-down on car, get a lease?

what kind of car is it?!
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Old 11-30-2012, 11:32 PM   #11
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Re: Upside-down on car, get a lease?

Sorry for the absence guys. It's a 2012 Mustang GT with enough options to value it around 29k. I owe 33k on it. I've been offered 26 from a dealer straight up (meaning no trade, they'd just buy it). I'm hoping I could get a dealer to take it for 29k (since they'll probably list it at 31 and sell it for 30) and thus be carrying over about 4k in negative equity, 5k tops. My goal is to finance no more than 20k, and if spread over the cost of a lease, I'd actually only end up paying about 12k of that, then I can start over from scratch. This whole process still sets me back at least 5k lifetime, and maybe 3 years or so behind the ownership of a real car when it's all said and done. But it enables me to be more responsible with my money at the moment, so it's a fair trade.

However a buddy of mine has recently been trying to talk me out of it, saying I'd be better off buying a good 10k used car, over-financing it for 15k to pay off the mustang debt, and have a car I'll own in 5 years on a 15k loan which would put me around $260/month payments, or HALF of what I'm paying on the mustang. I'll finish paying off both at the same time, but for half the payments which = mucho savings.
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Old 12-01-2012, 02:36 AM   #12
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Re: Upside-down on car, get a lease?

With that being said, seems like you just bought this car.

Your financial situation has changed that dramatically?

If it has, who cares about value and just get the hell out.

If you can space out the value, just drive the thing for 1.5 years longer and you should be even on equity value to sell it at that point.

Considering it is a brand new Ford Mustang your maintenance should be little to nothing and you should have a decent warranty....whats the problem?

If you just can't afford the payments, take the equity loss and move on to a car you can afford.
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Old 12-01-2012, 04:30 AM   #13
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Re: Upside-down on car, get a lease?

It's not that I cant afford it, but more or less that I dont want to anymore. I'd rather use the money for other things. If I get stuck with the car then thats fine, it will be mine eventually and hopefully runs well long into its life. I always wanted a badass car so I decided to just make it happen and say to hell with investing, savings, paying off other debts, etc. So now I'm car poor. Every available spare dollar I have goes towards this thing, and I'm tired of it. So now I'm just trying to decide what to do about it, and see if I can fix this mistake. If not, well at least I'll always have a badass muscle car lol.
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Old 12-01-2012, 10:55 AM   #14
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Well this situation isnt as bad as i thought. I thought you were stuck with a 1200 month payment and -20k in equity. What are you current payments and rate? If you have a good 0% or 1.9% rate then just stick w the car and drive it until its 6 months from the warranty expiring and sell. If you have a 12% rate, take the small loss and move on.

You have to always expect that a car is a losing item. Always.
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Old 12-01-2012, 04:16 PM   #15
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Re: Upside-down on car, get a lease?

Quote:
Originally Posted by javi View Post
Sorry for the absence guys. It's a 2012 Mustang GT with enough options to value it around 29k. I owe 33k on it. I've been offered 26 from a dealer straight up (meaning no trade, they'd just buy it). I'm hoping I could get a dealer to take it for 29k (since they'll probably list it at 31 and sell it for 30)
Harsh truth: Your fantasy scenario would not even be remotely worth the dealer's time unless they were absolutely raping you on the car you bought from them. The labor, commission, and materials costs to prep your car for sale would make it a net negative.
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Old 12-01-2012, 04:23 PM   #16
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Re: Upside-down on car, get a lease?

Quote:
Originally Posted by meekrab View Post
Harsh truth: Your fantasy scenario would not even be remotely worth the dealer's time unless they were absolutely raping you on the car you bought from them. The labor, commission, and materials costs to prep your car for sale would make it a net negative.
+1, this car will also pretty quickly lose in value imo, he will be in negative equity for awhile
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Old 12-01-2012, 04:25 PM   #17
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Re: Upside-down on car, get a lease?

lol a 2012 mustang gt is a high end sports car - what are you 19 years old?
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Old 12-01-2012, 06:01 PM   #18
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Re: Upside-down on car, get a lease?

I was in a similar situation when I was 18. Bought a brand new $30k sports car cause I could just barely afford it and realized a few months into it spending 80% of my minimum wage income on a car was stupid. I wasn't upside down on the loan but selling it would have wiped out my sizable down payment and left me broke with no car. One night I took an exit ramp at about 90 mph and ended up crashed in a forest. Insurance paid out way more than I could have sold it for. Not saying you should do that intentionally, cause that's illegal, but it wouldn't be the worst thing if it happened.
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Old 12-01-2012, 06:05 PM   #19
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Re: Upside-down on car, get a lease?

Let the car get repo'd. Buy a 4k car. Yes this will destroy your credit, but on the bright side that's probably a positive because you're clearly not very good with money. The car wasn't a small mistake it was a huge one. I'm guessing lots of people told you that it was a bad idea. You still did it. Assuming that people don't change or learn from their mistakes (because they rarely do) you're better off without credit, and you're being offered an opportunity to sell your credit for 7k. (The real value of your car is what the dealership offered you for it)

Seriously this is a no brainer.
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Old 12-01-2012, 08:20 PM   #20
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Re: Upside-down on car, get a lease?

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Originally Posted by BoredSocial View Post
Let the car get repo'd. Buy a 4k car. Yes this will destroy your credit, but on the bright side that's probably a positive because you're clearly not very good with money. The car wasn't a small mistake it was a huge one. I'm guessing lots of people told you that it was a bad idea. You still did it. Assuming that people don't change or learn from their mistakes (because they rarely do) you're better off without credit, and you're being offered an opportunity to sell your credit for 7k. (The real value of your car is what the dealership offered you for it)

Seriously this is a no brainer.
You're a ****ing idiot and I hope your wife suffers a miscarriage.

Anyway today I had another miserable experience with a dealer and have finally come to realize that it's pointless trying to sell to them. Their job is to prey on drooling retards who dont even know the value of their own car, or how to do basic math like adding what they owe to their next purchase. The kind of people who just say "me want car, me sign here ok? TY!" It's like if the dealer cant skin you for at least 5k, they arent even interested. It's like it's not even worth their time at that point.

I'll list my car privately, take out a personal loan to pay off the negative equity before it sells, and then just buy a new car when I'm ready.
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Old 12-01-2012, 08:47 PM   #21
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Re: Upside-down on car, get a lease?

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Originally Posted by javi View Post
Their job is to prey on drooling retards who dont even know the value of their own car, or how to do basic math like adding what they owe to their next purchase. The kind of people who just say "me want car, me sign here ok? TY!"
Considering your post, this is kind of an ironic thing to say, wouldn't you agree?

Of course the dealer is there to skin you, and aren't going to give anyone near full value on their car.....and why would they?

They are in the business to make money, not to help you get the most value out of a financial mistake you made so they can make a whopping $1k on a transaction. If they did that all day they would be a break even business at best.

They can do all this because, as you will soon find out when you list your car privately, not a lot of people have $30K cash sitting around and are looking to buy a Ford Mustang....much less even be able to qualify for a bank loan for a used $30,000 sports vehicle.

Either way, best of luck...I still say your better off with a nice car under warranty, but I have no idea how cashed strapped you really are at the same time. I'd probably just figure out a way to make more money or cut back on something else to make it work.
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Old 12-01-2012, 09:13 PM   #22
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Re: Upside-down on car, get a lease?

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Originally Posted by PFUNK View Post
Considering your post, this is kind of an ironic thing to say, wouldn't you agree?
Uh no. I researched my car quite well and am arguably only upside-down by the expected depreciated amount, which is only because I didnt pay a down-payment (afterall why bother, pay 4k up front of pay 4k now, same difference minus a few hundred dollars in interest spread out over 60 months).

I didnt get hustled into this purchase, I hustled myself into it. I can afford the car just fine, I simply prefer not to since it is a waste of my own money. The same reason I dont wipe my ass with $100 bills. I just dont like knowing my money is going down the drain this badly since I am actually rather good with finances. I just got hooked on the feeling of having a cool car and felt the payments were worth my emotional high. I've matured a little since then and realized a car is nothing more than a handy machine to get you from point A to point B, and the 30 minutes per day I spend in it arent worth thousands of dollars for the next 5 years.

Quote:
Of course the dealer is there to skin you, and aren't going to give anyone near full value on their car.....and why would they?
I'm not asking full value for the car, I just didnt realize their profit margin had to be like 30% per transaction to stay in business. I figured money is money and they'd take 2k over nothing.


Quote:
They can do all this because, as you will soon find out when you list your car privately, not a lot of people have $30K cash sitting around and are looking to buy a Ford Mustang....much less even be able to qualify for a bank loan for a used $30,000 sports vehicle.
Nobody has 30k cash laying around. Everybody gets car loans unless they are buying a car under 10k. And if a used vehicle can be appraised for 30k then a bank will give you 30k.

Quote:
Either way, best of luck...I still say your better off with a nice car under warranty, but I have no idea how cashed strapped you really are at the same time. I'd probably just figure out a way to make more money or cut back on something else to make it work.
I'm only cash strapped to the point that I cant take a trip to the bahamas or vegas as often as I'd like, or that I can buy other toys in greater quantity rather than my single toy which is a car. The car still works and as you said is under warranty. Eventually it'll be mine, and the value of it is irrelevant so long as I continue to pay for it.

Anyway thanks for all the BBV style non-advice from everyone probably in worse financial status than me. The original question was if there was any merit to getting a LEASE since that offers a unique scenario to quickly cut down on costs and ditch the loan entirely. But I imagine nobody here knows dick about finance in the first place hence all the retarded replies.
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Old 12-01-2012, 09:36 PM   #23
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Re: Upside-down on car, get a lease?

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Originally Posted by javi View Post
I'm not asking full value for the car, I just didnt realize their profit margin had to be like 30% per transaction to stay in business. I figured money is money and they'd take 2k over nothing.
So I guess you assume they just buy the car from you with $2K value built in and melt the car down into the cash?...

Quote:
Originally Posted by javi View Post
I'm only cash strapped to the point that I cant take a trip to the bahamas or vegas as often as I'd like, or that I can buy other toys in greater quantity rather than my single toy which is a car. The car still works and as you said is under warranty. Eventually it'll be mine, and the value of it is irrelevant so long as I continue to pay for it.
What kind of ****ing lame ass trips are you gonna take to the Bahamas or multiple trips to Vegas for $2,800? This is roughly the amount you said you would be saving YEARLY by going into your retarded lease out situation.

Quote:
Originally Posted by javi View Post
The original question was if there was any merit to getting a LEASE since that offers a unique scenario to quickly cut down on costs and ditch the loan entirely. But I imagine nobody here knows dick about finance in the first place hence all the retarded replies.
Your a punk to lash out when no one is even really giving you crap about it but trying to help....and obviously ur just a little f'ing kid who walked on the Ford Dealership and bought a retarded car for the first time probably, and one you cannot even afford and are now strapped for cash because of it, but yet we are the retarded ones about finance?

El Oh El

No one answered your original question because there are lots of specifics needed to know before that even sounds like a good idea.

It's basically do you want to lose $5,000 today and drive a ****tier car, or do you want to pay that $5,000 to drive a nice car under warranty for the next 2 years and end up with a little if not break even equity to sell it.

You would not even consider this if you could afford the god damned car.

And FYI a Ford Mustang is not a "high end sports car"

Ur Retarded with bad taste.

Bye.

Last edited by PFUNK; 12-01-2012 at 09:41 PM.
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Old 12-01-2012, 09:54 PM   #24
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I dont care about the fighting but can i ask simple questions.

What is your payment

Interest rate

Length left on loan
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Old 12-01-2012, 10:05 PM   #25
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Re: Upside-down on car, get a lease?

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Originally Posted by cap217 View Post
I dont care about the fighting but can i ask simple questions.

What is your payment

Interest rate

Length left on loan

Unless he is paying like 12% interest on this, which is highly doubtful considering it was a new purchase vehicle, do you really even think there is a scenario that would make more sense financially then driving this car for the next couple years until the warranty expires?

9 out of 10 leases he takes he will need to come to the table with $1-$3K, although there are some good promotions with VW and few others for $0 down, though some of which are high end and will be high payments as well.

At the end of that he has no equity or trade value and has to roll into something else, cash down.

Getting into a crappy car and taking a hit increases his liability of potential maintenance costs, plus will get a terrible rate to purchase, and just seems totally unreasonable unless he just cannot afford this car period.....

He has said repeatedly he can afford the car, but I have a feeling his definition would be much different then mine if the $250 he is trying to save per month is tying up his ability to throw away more money on vacations, "toys", and other great decisions this financial wizard makes.
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