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Old 11-29-2012, 12:56 AM   #1
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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, 01:12 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, 02:25 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, 11:22 AM   #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, 11:28 AM   #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, 11:30 AM   #6
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Re: Upside-down on car, get a lease?

Quote:
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, 06:48 PM   #7
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Re: Upside-down on car, get a lease?

Quote:
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, 09:08 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, 09:12 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, 09:15 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, 10:32 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, 01:36 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, 03:30 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, 09:55 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, 03:16 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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