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Advice on trading car in

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Anonymous
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Advice on trading car in

Hello all,

 

I have a question.. well more like I would like some opinions on my current situation.

 

My fiance and I currently have a 2015 Hyundai Veloster Turbo with 10k miles on it. We used to lease a 2013 Honda Accord, but last year we decided we wanted a new and different car without the Accord's lease being done. So we tacked on negative equity (about $11,000.. yes it was a stupid decision but now we are stuck with it) So the total of the Veloster came out ot be 36k (value of the car is like 24k when we bought it brand new). Right now we owe 28k left on it. We pay $485 a month for a 6 year lease with $3,000 down. 

 

Well, here is the thing. My fiance wants to try and trade in the Veloster to a dealership to get a lease for 3 years. Where they'd tack on the negative equity ontop of the payment for the lease and make it around the same we are currently paying a month ($485). Let's say the lease itself is $200 a month, well then they'd add the negative equity to that so we'd pay it off by 3 years (something like that). But at the end of the lease we'd have no car and would have to buy another one all over again. After 3 years we'd have paid about 17k, then if we were to get a new car around 16k it'd add up to about 36k (inlcuding our 3,000 down when we bought the Veloster) altogether for a (not as nice a car as the Veloster) in the end. 

 

I say we keep the Veloster, and after 3 years of paying $485 a month there will be only 11k left and then we'd have it paid off in 2 years and own the car with no more payments. 

 

He says he wants to get out of debt as soon as possible. But if we lease a car and then buy another one we'd still be making payments and will be in debt.

 

Any advice? I just want other peoples unbiased opinions. I appreciate it greatly. 

Message 1 of 3
2 REPLIES 2
StartingOver10
Moderator Emerita

Re: Advice on trading car in


@Anonymous wrote:

Hello all,

 

I have a question.. well more like I would like some opinions on my current situation.

 

My fiance and I currently have a 2015 Hyundai Veloster Turbo with 10k miles on it. We used to lease a 2013 Honda Accord, but last year we decided we wanted a new and different car without the Accord's lease being done. So we tacked on negative equity (about $11,000.. yes it was a stupid decision but now we are stuck with it) So the total of the Veloster came out ot be 36k (value of the car is like 24k when we bought it brand new). Right now we owe 28k left on it. We pay $485 a month for a 6 year lease with $3,000 down. 

 

Well, here is the thing. My fiance wants to try and trade in the Veloster to a dealership to get a lease for 3 years. Where they'd tack on the negative equity ontop of the payment for the lease and make it around the same we are currently paying a month ($485). Let's say the lease itself is $200 a month, well then they'd add the negative equity to that so we'd pay it off by 3 years (something like that). But at the end of the lease we'd have no car and would have to buy another one all over again. After 3 years we'd have paid about 17k, then if we were to get a new car around 16k it'd add up to about 36k (inlcuding our 3,000 down when we bought the Veloster) altogether for a (not as nice a car as the Veloster) in the end. 

 

I say we keep the Veloster, and after 3 years of paying $485 a month there will be only 11k left and then we'd have it paid off in 2 years and own the car with no more payments. 

 

He says he wants to get out of debt as soon as possible. But if we lease a car and then buy another one we'd still be making payments and will be in debt.

 

Any advice? I just want other peoples unbiased opinions. I appreciate it greatly. 


^^^He doesn't understand how debt works if his suggestion is to trade this upside down vehicle in - again.

 

If I understand correctly, you are currently financing the Veloster, right? Not leasing it? 

 

If he wants to get out of debt, then build up your savings and pay down the neg equity on the current vehicle or better yet, pay the car off and keep it a while to enjoy no payments at all.

 

Note:  It sounds like he may be saying he can't afford the payment any longer. If you find out that is what is going on, then rework your budget. You might need to sell it and pay off the neg equity and start over with another vehicle. But don't trade - every trade hurts you when you owe money on the vehicle. Each trade builds up debt - it doesn't get rid of debt.

 

 

 

 

 

Message 2 of 3
Anonymous
Not applicable

Re: Advice on trading car in

Wow you folks really need to stop.  It seems like you had negative equity going into the Accord based on $11k neg after one year (or you're a terrible negotiator), then you have the negative equity on the Accord, now you will have negative equity on the Veloster.  The fourth car will be carrying 3 cars worth of negative equity.  Pretty soon you're going to bury yourselves all the way to China. 

 

Like what the other guy was asking... Based on $36,000 selling price, $3000 down, and $485/mo, it seems like you are currently in a 6 year loan.  Correct me if i'm wrong.  If you absolutely need to get out of the Veloster (having kids for instance), a lease is the best way to get out of negative equity. 

 

*Edit* I need to correct myself.  GAP insurance and a brick wall would be the best way to get out of negative equity.  (Just kidding of course!!!)

Message 3 of 3
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