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YOUR BALANCE
Buying/leasing car question
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Buying/leasing car question


Jul 29, 2015, 12:57 PM

(This has nothing to do with my post yesterday about my old car...completely different situation.)

We are looking to knock out a chunk of our monthly bills. We're not poor...there's just something specific we want to do that will require some cutting back.

We have a very nice vehicle, a 2014 Explorer with all the bells and whistles, that we have made 13 monthly payments on. We think one path is to get rid of this car and get something used instead.

Looking at trade-in values, we will be upside down on this vehicle by a fair amount. So we'll be looking to roll that into the payments on the next car.

One thing I have been rolling over in my mind is the option of leasing, to drive down payments even further. The idea is that three years from now, we will be in a much stronger position financially. So leasing may be good for this short term.

What about leasing a used car? I do believe it is possible, but is it stupid?

What are some things that I need to be aware of and look out for in this process? Anyone ever traded in a 1-year old car?

flag link military_tech thumb_downthumb_up

Don't lease - just don't.***


Jul 29, 2015, 1:00 PM



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#ACCFTS


I have uttered that phrase to myself many times.


Jul 29, 2015, 1:01 PM

But honestly, this specific situation seems to fit a lease option, at least more than any other situation I've been in.

But still, no, right?

flag link military_tech thumb_downthumb_up

Why not just get a really crappy car that you need for a yea


Jul 29, 2015, 1:03 PM

r while you get your finances set that allows you to move up in car later. I have never had a car payment... nor intend to ever have a car payment. I am doing everything I can to pay off my house too because I have a general disdain for debt.

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This would be my wife's car...


Jul 29, 2015, 1:07 PM

I can't go "bucket of bolts" with it.

flag link military_tech thumb_downthumb_up

Switch cars.***


Jul 29, 2015, 1:14 PM



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It has crossed my mind.***


Jul 29, 2015, 1:18 PM



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Well unless you are positive that you won't drive the leased


Jul 29, 2015, 1:04 PM [ in reply to I have uttered that phrase to myself many times. ]

car much (cause mileage restrictions) and your situation won't change (have kids, change jobs, move, etc) while you have the car, it just doesn't work out. Especially if you are looking to cut costs.

Find a decent used car, get a low interest loan from bank or credit union, and you will be much better off in the long run.

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#ACCFTS


What people aren't suggesting you do is


Jul 29, 2015, 1:07 PM

try to refinance the Explorer for a good 7-8 years to lower the payment. You know why? IT IS THE ONLY IDEA WORSE THAN LEASING.

Unless you are the type that only drives 5000 miles per year.

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My only worry is, if I buy a used car for a monthly payment


Jul 29, 2015, 1:09 PM

in the range I'm looking it...it won't be of sufficient quality/condition. Maybe I just won't know until I beat the bushes.

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If you do your research on the model track records...


Jul 29, 2015, 2:01 PM

and it's really easy through Consumer Reports, know what you're looking at when you assess a vehicle in person (or take someone that does), and know what questions to ask the seller, then you can buy reliable cars for cash all day long. The only hitch is that once you identify the models that suit your needs, they may take some time to locate.

That said, I've bought every car I've owned for cash in the last 25 years. They've all been older with some mileage on them, and I've yet to have one fail me. The insurance is lower, the taxes are lower, and I have no payment to make. I just trusted a 10 year old Mazda3 with 150K on it that I bought back in January for $4500 to circumnavigate the state of Florida on our vacation. Not as much as a burp with this car.

Of course, I have a mechanic that I know well and trust who has done the maintenance on the car since I bought it. Having 'a guy' you trust is a big part of my equation, as he sees things that might need to be done while doing the routine stuff like oil changes and we get it taken care of before it costs me real money.

Don't let older or higher mileage scare you. Do the research and have someone that knows cars look it over and you'll come out way ahead in the long run.

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CarGurus.com is the best place to start looking for a model


Jul 29, 2015, 3:22 PM

I used consumer reports to find the model I wanted. Instead of locally, I decided I would travel up to 500 miles to buy it. CarGurus ranks cars based on how much below market value it is as opposed to cheapest/lowest miles/etc. I got daily emails when new good deals popped up until I found a steal on my Tundra a year ago. Just b/c you asked, it's a 2011 5.7 Dbl Cab with 105K, a decent amount of dings, for $13.5K. I drove to ATL and drove her home.

flag link military_tech thumb_downthumb_up

That is a good deal. I got a pretty good deal for mine.


Jul 29, 2015, 3:38 PM

2007 Tundra Double Cab, V8 (the smaller one) 107k for 14k. I bought it in 2012. It was local though, so that was good.

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That's a good deal as well


Jul 30, 2015, 4:35 PM

- even in 2015 $14k for an '07 is hard to find.

I love my Tundra - best vehicle purchase I've made.

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Not sure of your whole situation, but mentioning that


Jul 29, 2015, 1:08 PM

you are upside down on the current vehicle and thinking of rolling it into the next one sends up multiple red flags.

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MauldinT, where are you???


Yeah, just keep in mind we can afford the current car.


Jul 29, 2015, 1:11 PM

Have been paying on it, not missing a beat. Just wanting to add a short term expense into our lives that will result in long-term gain.

Now, if you mean "red flags," as in we will have trouble actually executing this plan, then that's a different story. Will we have trouble finding someone willing to tango in this way?

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Just how much car payment are you looking to cut?***


Jul 29, 2015, 1:14 PM



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$600 range to $350 range


Jul 29, 2015, 1:15 PM

Something like that.

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Would not like $600 car payments


Jul 29, 2015, 1:21 PM

Good thing we bought a sedan.

2024 purple level memberbadge-donor-15yr.jpg2006_ncaa_champ.jpg flag link military_tech thumb_downthumb_up


...Yeah, my Camry cost me $312.17 a month.


Jul 29, 2015, 1:21 PM [ in reply to $600 range to $350 range ]

2012 bought in March of 2013. So if you can find an acceptable car for about 20k minus what you are underwater and are willing to extend the payments longer than 5 years, go for it. I financed for too long, but I've paid more than the payment every month. I figure I'm about 3 months ahead now. I also borrowed at 1.9%

badge-donor-05yr.jpgringofhonor-aero.jpg flag link military_tech thumb_downthumb_up

How much is the explorer worth, and how much do you owe?***


Jul 29, 2015, 1:28 PM [ in reply to $600 range to $350 range ]



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MauldinT, where are you???


According to my initial research through Blue Book


Jul 29, 2015, 1:29 PM

I'm at about -9K on it.

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OUCH!!!


Jul 29, 2015, 1:48 PM

Sorry man. That sucks.

I would suck it up and just get the thing paid off. Hopefully there is another avenue for cutting your expenses to pay for whatever you are looking to do.

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MauldinT, where are you???


We talked about selling the house.


Jul 29, 2015, 1:54 PM

A little too drastic a measure, though.

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Have you considered roommates? ***


Jul 29, 2015, 1:58 PM

.

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Dude, it's an Explorer.


Jul 29, 2015, 2:02 PM

That's a model that can move a LOT of drugs up from the Mexican border.

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Depends on how much money you can make off it


Jul 29, 2015, 2:05 PM [ in reply to We talked about selling the house. ]

And where you want to move when you sell.

Women seem to be stuck on houses much more than men; I'd sell/move today for the right money--I don't care one way or the other.

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Understand you can currently afford it, just the idea of


Jul 29, 2015, 1:15 PM [ in reply to Yeah, just keep in mind we can afford the current car. ]

"kicking the can down the road" seems like a bad idea.

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MauldinT, where are you???


Yeah, I do recognize it's not ideal.


Jul 29, 2015, 1:17 PM

Getting this monstrosity of a car in the first place was not a great long-term plan. It didn't leave room for any sort of life changes, the likes of which we're looking at now. I'm trying to do what I can to make the best of it.

flag link military_tech thumb_downthumb_up

Congrats on becoming a father, BRAVO!***


Jul 29, 2015, 1:18 PM



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You absolutely cannot get out of your car and into any


Jul 29, 2015, 2:08 PM [ in reply to Yeah, I do recognize it's not ideal. ]

other car without $1000s going up in smoke. You are letting your big life change rattle your senses. Don't go burning the furniture at the first sign of snow.

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If you have decent credit,


Jul 29, 2015, 1:24 PM [ in reply to Yeah, just keep in mind we can afford the current car. ]

there will be no shortage of unscrupulous car salesmen willing to help you execute your flawed plan.

Trust me, I've done the rollover before...you'll never get out from under it until you actually pay off whatever vehicle loan you have. Why pay for two cars when you will only have one?

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I do believe this is my best opportunity at reducing


Jul 29, 2015, 1:28 PM

bills in the short term. Alternatives would be things like getting rid of cable/phones. But that wouldn't cut out a chunk of this size, I don't think.

Of course, the other option is to just forget about the whole thing, because we currently can't afford it. But it's something we feel we really need and want to do, so I'm trying to find a way to make it work.

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Why not just do it later.


Jul 29, 2015, 1:30 PM

Unless it is for the wife. Then maybe not do it at all. My wife was a teacher and got her masters and is a stay at home mom now. The good thing was the school district paid for it so we didnt spend any money. I just dont get the families that want to have stay at home mom's and the mom pays to get a masters.

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I knew a girl who did that.


Jul 29, 2015, 1:34 PM

Went to college, got out got a job. Had her dad send her back to school full time to get her masters. About 8 months later got married, preggers, then never went back to work. From her perspective she won the superbowl, but her dad is out the price of a USC MBA. Pretty wasteful.

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It's something we want to do before having kids.


Jul 29, 2015, 1:34 PM [ in reply to Why not just do it later. ]

Obviously, part of this plan hinges on the fact that three years from now, we are going to be making a good bit more money. So suddenly turning into a stay-at-home mom isn't a good result. We have talked about this.

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My general feeling of used vehicles is that somebody


Jul 29, 2015, 1:09 PM

got rid of them for a reason. Take care of that Explorer, try to pay it off early, and you'll probably come out better in the end. If you're driving so little that you're considering a lease, that car ought to last 10+ years.

Maybe I've just had bad luck, but generally speaking, most of the stuff I've bought used I ended up wishing I had spent the upfront money and bought it new. This included vehicles, freezers, lawn mowers, tillers, jet ski, and a host of other things. I did by my truck used, but it only had 1500 miles on it.

2024 white level memberbadge-donor-15yr.jpgringofhonor-lakebum1-110.jpg flag link military_tech thumb_downthumb_up

I have an AWESOME 2014 GMC Sierra for sale***


Jul 29, 2015, 1:16 PM



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I still see my old Frontier around Clemson from time to time


Jul 29, 2015, 1:22 PM

I wonder how pissed that guy was when he realized how much money he was going to have to put into it. I know the dealership didn't bother to fix all of the problems.

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Main reason why I don't like buying used cars


Jul 29, 2015, 1:23 PM [ in reply to My general feeling of used vehicles is that somebody ]

Don't care about resale value since I'll keep the car until its a POS that no one wants.

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It's worth it to know what the car has been through


Jul 29, 2015, 1:29 PM

I'll take the hit on depreciation so that I know it hasn't been submerged in a river or something else crazy which will cost me thousands to fix later on down the road.

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People with that feeling have scored me some excellent used


Jul 29, 2015, 2:09 PM [ in reply to My general feeling of used vehicles is that somebody ]

vehicles over the years. Sometimes, it's not that there was anything wrong with the car, it was the belief that they needed a newer, fancier model for appearance sake. Or, they hated getting good gas mileage and felt the need to get something with a V16 in it because it sounds great and makes chicks panties wet.

Twenty five years, my friend. Twenty five years of buying good used cars with higher mileage and letting everyone else make the tax man and insurance man achieve joyous #######. I'd say the evidence is pretty solid, and I am dismissing this case without prejudice.

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Are we brothers? Twins? Can we warlord together sometime?***


Jul 29, 2015, 2:10 PM



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I was Dave Ramseying before Dave Ramsey was Dave Ramsey.


Jul 29, 2015, 2:29 PM

I got "if you don't have cash, you don't need it" from my Grandmother.

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I was too... my dad taught me.


Jul 29, 2015, 3:39 PM

He is cheap though... I am trying to be frugal... not cheap.

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You got it.


Jul 29, 2015, 3:49 PM

When you do buy, you buy quality. And it's not about socking money away for the sake of socking it away, but enjoying what you socked away. We like to travel. I'd much rather pay to see the world than pay to see a fancy dashboard.

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Yeah. Delayed gratification which most people dont have.


Jul 29, 2015, 3:59 PM

I am so thankful my wife will sit down and listen and try to understand things instead of just whien about not having something. Shehas been completely on board with getting the house paid off, no cable, shopping at Aldi (although she said she loves it now and will probably continue)... she loves to travel, me to but her moreso. I basically showed her a way that we could be in position to take our family to Europe every year if we wanted to... but that means taking things easy now. She undertands that and is on board. Having your spouse on the same page is hugely beneficial.

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Re: Yeah. Delayed gratification which most people dont have.


Jul 29, 2015, 4:14 PM

Yeah, sounds like you have patience to deal with a good woman. I usually trade them back after 20-30 k miles. I've been walking lately. But, I'm in good shape and I sleep good. My patience left with my youth and I have a teenager still to try my sanity.
Oh, as far as cars go, I'm with you and RH.

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My in laws were frugal and taught her to be.


Jul 29, 2015, 4:38 PM

She tries to help me be frugal instead of cheap.

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Speaking of Europe....


Jul 29, 2015, 4:28 PM [ in reply to Yeah. Delayed gratification which most people dont have. ]

Biarritz France is high on my list while I'm still healthy enough not to die surfing. We love Spain, so it's a natural fit for us to get there.

http://tmagazine.blogs.nytimes.com/2013/03/15/the-californication-of-biarritz/

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The only reason we get rid of vehicles in my family is if


Jul 29, 2015, 2:29 PM [ in reply to People with that feeling have scored me some excellent used ]

they start having problems. Any electrical issues and that car is gone. I've seen people spend thousands going down electrical problem rabbit holes.

I'll put up with one or two mechanical problems before 100k miles, but if I sense somethings going to be a frequent issue, I'll be moving on. I plan on keeping my truck until at least 200k miles, hopefully well past that.

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I know when I'm buying these cars that it's good for 3 or 4


Jul 29, 2015, 2:48 PM

years. You know that going in. But, if it starts to nickel and dime me sooner, I will dump it, and what I've found is that a $4k-$5k car doesn't have that much value to lose, and I always get reasonably close to what I paid for it. I could go buy something brand new and make payments and it would not hurt me in the least, but why? I drive something different every 3-4 years, so I don't get bored with my car, and like I said...the track record has been stellar since I started doing this. Further, I NEVER worry about how or where I park like I would with a new car.

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I have an AWESOME GMC truck you should buy***


Jul 29, 2015, 3:22 PM



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Already have a truck.


Jul 29, 2015, 3:50 PM

Next on my list is a small camper, like a teardrop. I'm in the research phase on that right now.

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I'm not sure I'd ever buy a new car


Jul 29, 2015, 2:25 PM [ in reply to My general feeling of used vehicles is that somebody ]

For most cars, the depreciation that happens just for driving the thing off the lot makes buying it new a rip-off. You can pretty much upgrade yourself to a different bracket of cars by buying a few years used rather than buying new. The car that I own would've been close to $50,000 brand new, but I bought it two years old with around 30,000 miles on it for less than $20k. I've never had any major problems with it, and it's now about 10 years old.

If I'd tried to buy something new, I'd have ended up with a compact car or something with very few options.

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You can find a lot of deals on new cars


Jul 29, 2015, 2:34 PM

Or either basically new cars with less than 3k miles or so. Particularly on trucks, people buy one to tow something and realize they need a diesel.

Dealers will come off the price on a 2014 when the 2015's are out a lot more than you would think. Go at the end of the month, and look for last years model, you'd be surprised at what you could find. This goes for boats, as well.

It only takes buying one bad used car to leave an awful taste in your mouth.

2024 white level memberbadge-donor-15yr.jpgringofhonor-lakebum1-110.jpg flag link military_tech thumb_downthumb_up

I say this completely non sarcastically, srsly.


Jul 29, 2015, 1:15 PM

I'm very surprised that you don't listen to Dave Ramsey. Many churches use him to teach their folks how to deal with money.

The real answer here is to save up enough money and sell the Explorer, then buy something used that you can afford without payments.

Don't lease anything, unless you are a business and want operating expenses over capital expenses.

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I agree that debt is bad...


Jul 29, 2015, 1:38 PM

This whole thing of never having payments on anything...it's just not realistic for us. I find some of Ramsey's principles to be a little "pie in the sky".

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Try it. A lot of people think that it is crazy or they cant


Jul 29, 2015, 1:43 PM

do it. My next door neighbors know my plan and said the same thing. I sat down with them and looked over their finances because they said the couldnt even save for retirement. They make 30% more than we did and I showed them where they could cut expenses.

A lot of money is wasted on petty things that dont matter typically. I'm not saying everyone should go to the extreme that I go on some things, but there is always substantial cuts that can be made that arent really all that important.

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Obviously, I agree with that.


Jul 29, 2015, 1:47 PM [ in reply to I agree that debt is bad... ]

Dave is very risk averse and extreme.

But he has a point on some things, and I (like) to think its a though process rather than a one time extreme action.

You have a car you say you can't afford, and you want to double down on that by getting rid of it, rolling the negative equity over to something that you'll never own. I don't even see how that would work toward lowering your payment (because negative equity plus lease costs), but if you can find it somehow, I just don't see how it improves your situation. You're still in (more) debt, just now have less to show for it.

Srsly--find the most you sell it for, save up the money to make up the difference between what you owe and what its worth, then buy something cheaper to drive. If you have to finance that, at least your not in as bad of a situation.

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It would have to be a significantly cheaper car, obviously.


Jul 29, 2015, 1:51 PM

The price range I'm looking at is 25% that of the Explorer. That's the only way this will result in lower monthly cost, in the short term.

I realize I am adding to, not reducing, my debt. I realize that's not good. My goal here is reducing the hit to my wallet, in the short term. Kicking the can down the street is a good way of putting it, I guess. But the result we're aiming for is, down the street, to be able to crush the can with ease. Or something like that.

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But in the meantime you are making it more likely the


Jul 29, 2015, 1:54 PM

can can crush you. Its just a bad move. Cut the cable and save and do when Inelligible said, sell car cover the loss and buy something more reasonable.

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If you have to roll over ~$9K negative equity to your lease


Jul 29, 2015, 2:03 PM [ in reply to It would have to be a significantly cheaper car, obviously. ]

I'm not sure you could get gap insurance (that you'd have to pay for as well) to even cover it if it gets in an accident. Like you said it would have to be a very cheap car(think of the smallest sub compacts), and they aren't worth much more than $12-15K. Almost doubling that cost with the negative equity just doesn't add up, at least to me.

You would *almost* be better putting $9K on a low interest cc and paying off the difference there. Almost.

Got a home equity LOC?

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there's just something specific we want to do


Jul 29, 2015, 1:17 PM

congrats on your upcoming children!

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Cat on a tin roof, dogs in a pile,
Nothin' left to do but smile, smile, smile!!!!


LOL, no. It's actualy a higher education endeavor.***


Jul 29, 2015, 1:18 PM



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Well congrats on that too!


Jul 29, 2015, 2:13 PM

I guess you're finally tired of former inmates with GEDs passing you for promotions with just your coot degree to get you by!

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Call around to some dealers and see what they'll buy it for


Jul 29, 2015, 1:19 PM

I keep getting mailers from dealers looking to buy my current vehicle.

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You have gap insurance?


Jul 29, 2015, 1:26 PM

Park it in a bad neighborhood with the keys in it. Or roll it into a lake and report it stolen.

But seriously folks, selling a nearly brand new car at a loss and then leasing a car instead might be the absolute worst course of action. I would recommend the bad neighborhood/lake method before doing that.

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Are you the GM for the New Orleans Saints?***


Jul 29, 2015, 1:35 PM



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Which one of you is getting the sex change?***


Jul 29, 2015, 1:41 PM



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Please forgive me, @IneligibleUser


Re: Whatever you decide, DONT LEASE!


Jul 29, 2015, 2:04 PM

Leasing is always the most expensive way to own a vehicle. It is a terrible financial choice. Sounds like your current payment is stressing the finances. Make sure when you look at blue book that you check the private party price and not the trade in. I would suggest that if you are within $3000 of negative equity, I would save up that amount and sell it myself just to get rid of that debt and $600/month payment. Then save a little more and get a reasonable car (Under $20k) and pay as much down as you can so your payment is low $300's or less. Then pay it off over time. Big car payments are straddling many people these days, not just you. Good luck.

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when to lease


Jul 29, 2015, 3:57 PM

those saying stay away from leases are both right and wrong.

there are three essential points.

1: its all about the deal. you haggle over leases just as you haggle over purchasing. there are more factors in leases other than the sale price. so, you can negotiate the money factor, the residual, the sales price, the upfront (down) payment, and your trade-in if any. In some situations, there may be incentives offered by the car company (typically only new or maybe CPO cars) that only apply to leases and don't apply to purchases. Similarly, there may be incentives that only apply to purchases. Ultimately, in most cases, leases are not as good as purchases but thats not always the case. shop around.

2. Leases are particularly beneficial if you use the vehicle in your business. likely not the case with you, however.

3. finally, I think a lease is particularly attractive not for the financial side of it (as I said above, its usually not the best deal) but for the no hassle side of it. If you hate dealing with trade-ins, used cars, always want to drive a *new* car and never one thats more than a few years old, and don't want to get underwater, the lease is an attractive option. You can lease, drive, and turn it in after a couple of years. Many wealthy people lease cars not for the financial incentive but because they do not want to deal with hassle of buying and selling cars or maintaining an older car.

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