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Hey forum
i am am looking to ditch my 500 month finance terms on a 2010 volvo xc60 and trade it in for a current inexpensive honda accord lease to cut my monthly bills down on car payments, is this the right thing to do?
I still owe on the volvo obviously but the value seems to be dropping more than what I owe. I understand i will be under water on this loan but is it best to cut my losses on a high payment vehicle?
Depends on how much upside down you are on the loan. The negative equity will have to be rolled over in to the lease (if you can't come up with the cash) so you may end up paying $500 regardless. Lease also requires a higher insurance coverage and have mileage penalties if you drive over the allotted miles.
Depends on how much upside down you are on the loan. The negative equity will have to be rolled over in to the lease (if you can't come up with the cash) so you may end up paying $500 regardless. Lease also requires a higher insurance coverage and have mileage penalties if you drive over the allotted miles.
i feel that maybe my scenario, i was hoping to keep the payment lower but that will also require me to put more down, would a dealer still offer me a no money down lease because i am returning(trading in) a possible upside down loan?
the insurance up charge goes with the purchase of a newer model vehicle is there a type of insurance that dosent skyrocket because of a lease? I cant see how it would be higher than a financed vehicle
i feel that maybe my scenario, i was hoping to keep the payment lower but that will also require me to put more down, would a dealer still offer me a no money down lease because i am returning(trading in) a possible upside down loan?
the insurance up charge goes with the purchase of a newer model vehicle is there a type of insurance that dosent skyrocket because of a lease? I cant see how it would be higher than a financed vehicle
If you just need a lower payment but like the Volvo, you could refinance your existing loan out to a longer term to reduce the payments. Interest rates are still quite low, so borrowing money isn't the crush that it is in normal times. You should be able to get close to where you would be with the Honda's lease. Try to do it with your existing lender so that you aren't forced to bring cash into the deal.
Think of it as similar to taking out a 5 year loan on a 4 year old used car, which many, many people do.. (myself included).
Even a $0 down lease requires what's called "drive off fee"... which are 1st month's payment, bank fees, DMV fees, etc. Often around $1500-$2000. So even if pay cash to cover the negative equity on that Volvo, you'll need to come up with more money to get in the lease.
Lease often requires higher coverage, meaning instead of $15,000 liability (state minimum) and $1000 deductible you got away with on a financed vehicle, you'll often need $100,000 liability and lower deductible on a lease. Difference can be hundreds of dollars in higher premiums.
I would just sell the Volvo and get a low cost lease from Swapalease or Leasetrader, which don't require drive off fees.
If you just need a lower payment but like the Volvo, you could refinance your existing loan out to a longer term to reduce the payments. Interest rates are still quite low, so borrowing money isn't the crush that it is in normal times. You should be able to get close to where you would be with the Honda's lease. Try to do it with your existing lender so that you aren't forced to bring cash into the deal.
Think of it as similar to taking out a 5 year loan on a 4 year old used car, which many, many people do.. (myself included).
i have investigated this option and tried to refi through a credit union and the outcome was going to be a only a half percent lower than my current 3.7 percent loan. also i would also need to put in a put in a 2k down payment for the refi. because the appraisal of the volvo was done over the phone
Even a $0 down lease requires what's called "drive off fee"... which are 1st month's payment, bank fees, DMV fees, etc. Often around $1500-$2000. So even if pay cash to cover the negative equity on that Volvo, you'll need to come up with more money to get in the lease.
Lease often requires higher coverage, meaning instead of $15,000 liability (state minimum) and $1000 deductible you got away with on a financed vehicle, you'll often need $100,000 liability and lower deductible on a lease. Difference can be hundreds of dollars in higher premiums.
I would just sell the Volvo and get a low cost lease from Swapalease or Leasetrader, which don't require drive off fees.
the programs dealers offer seem to mislead whats really in the intentions of getting into the leasing business, i feel they might be the only person to negotiate a deal better than a swap a lease program. I have not tried selling a vehicle on my own since i was a teenager. who can you trust nowadays to pay off a 2010 vehicle off the internet nowadays. am i wrong thinking a dealer would be the only way out?
The amount you are underwater will always remain in the mix. You can roll it over, pay it, finance it, whatever. It’ll be there. The last time we were in that situation, it got rolled over in the new loan. It stayed with us until we sold the car and ultimately cost us the original amount plus lots of interest. I suggest you get a personal loan to pay what you owe and get yourself one of those $159 a month leases.
Even a $0 down lease requires what's called "drive off fee"... which are 1st month's payment, bank fees, DMV fees, etc. Often around $1500-$2000. So even if pay cash to cover the negative equity on that Volvo, you'll need to come up with more money to get in the lease.
Lease often requires higher coverage, meaning instead of $15,000 liability (state minimum) and $1000 deductible you got away with on a financed vehicle, you'll often need $100,000 liability and lower deductible on a lease. Difference can be hundreds of dollars in higher premiums.
I would just sell the Volvo and get a low cost lease from Swapalease or Leasetrader, which don't require drive off fees.
You can do a lease without any upfront money. A lease is no different than traditional financing when it comes to negotiation about money down.
And leasing doesn't require higher insurance than financing a vehicle - in both cases, the lien holder wants their investment protected. But if you're not paying cash for a car, it should be fully insured anyway.
Sell the Volvo even if it means money coming out of your pocket and buy a $2500 car.
I've never understood why people roll large amounts of negative equity into a new car payment.
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