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Depending on how much is owed on the Volvo, a lease makes sense - get a new and reliable car, make the 3 years of lease payments, and walk away clean at the end. No balance to roll into the next car.
Myth 1. Leasing is a bad deal. In general, if you keep a car well past the day the loan is paid off (or if you pay cash to begin with), you'll save money by buying. But if you trade in your car before the loan is paid off, the value of the trade-in is unlikely to cover the remaining balance on the loan. And if you shop -- and negotiate -- as hard for a lease deal as you would for a purchase, you can come out ahead by leasing.
Say you negotiate to buy a 2013 Nissan Altima 2.5 S (sticker price: $23,365) for invoice price -- $21,403 -- with 10% down and a five-year loan at 2.9%. But after three years you decide you want a new car. If you trade in the Altima, you will likely get about 46% of the sticker price, or $10,621 (the resale value after three years, according to the Kelley Blue Book). Then you'll have to pay off the loan. Figure your total out-of-pocket cost will be $9,525.
But if you lease that new Altima for three years, your monthly payments will be $179 with a $1,820 down payment (Nissan has been offering subsidized leases on the 2013 Altima). When you turn in the car at the end of the lease, you'll just walk away (unless you go over your mileage allotment or have unusual wear and tear). Total out-of-pocket cost: $8,264. In this case, leasing would leave you $1,261 richer.
How many more monthly payments are left on that Volvo? If the car is trouble free and maintained well, I would just keep it instead of trying to get a smaller monthly payment but end up extending the finance period.... Thus end up paying more (both interest and negative equity) in the end.
Either way, I'd ratther buy and own, than rent something for three years. To me, buying is better.
If the car you've bought is worth far less than what you owe, a heavily subsidized lease deal can get you into a better car and out of the whole mess pretty cleanly.
If the car you've bought is worth far less than what you owe, a heavily subsidized lease deal can get you into a better car and out of the whole mess pretty cleanly.
Thats true, I'm still never going to lease, though, mostly because a new car is something I'm starting to never ever want.
How many more monthly payments are left on that Volvo? If the car is trouble free and maintained well, I would just keep it instead of trying to get a smaller monthly payment but end up extending the finance period.... Thus end up paying more (both interest and negative equity) in the end.
Officially the car is already out of its 5 year guaranteed factory warranty, the volvo is garaged kept since day one brakes and tires and battery have been changed by use because those are routine, but its just killing us to pay for a premium small suv when the money can be going to pay off other things like a mortgage and daycare. my wife and i feel if we will roll into another deal with a lease and be in another predicament because soo much money is needed to start a lease.
also most no money down vehicle offers dealers offer are basic four wheels and a steering wheel options, how can that be a good switch?
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.
I always thought this as well up until this past Sat. Went with my brother in law to Nissan so that he can lease a 2015 Altima SV. He stated to the salesmen that he wanted to do the lease with no money down. I made him aware that even with $0 down, he would still need to come up with $ for the tax, bank fee, dmv fees, etc. The salesman came back with the numbers assuming he wanted to put down absolutely nothing and told him that he would need only to pay the first months payment. He was able to roll all those fee's into his monthly payments. He drove off the lot with only making his first months payment.
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