wrote:
A little background. I've got a car loan now on a 2012 Jeep Patriot that is less than ideal. I got it when I first started rebuilding, and had to settle for 18.99%. Now I'm to the point where I need to make a change. I should have sooner, I will admit, but was caught up in trying to get my score up before refinancing, then went through the home buying process.
The reason I say 'need' to make a change is simply because 18.99% is unreasonable with my current credit profile. My scores have finally hit the low 700's, I've got a good profile of revolving cards with only about 18% utilization (and decreasing rapidly) and a decent DTI. Additionally, this car has aged to the point that I am going to have to start throwing money into repairs, and still have 24 months left on the note, and because of the interest rate, I'm upside down on it.
So, long story short. I've been looking into leasing. I work from home, so I don't put more than 2-4k miles on a car. I'm big on woodworking and home renovation, so I'm leaning toward a truck (I’ve beat the snot out of the interior of my car from moving stuff around, and remember the ease when I had a truck before). Theres a dealership around me that's got a pretty nice deal on a 24 mo lease for $199 which is about $150 less a month than what I'm paying right now. Additionally, I'm indecisive and not completely sold on any particular brand. Part of me likes the idea of a 24 month "test drive".
On the financing side, if I were to buy a used truck and roll in my negative equity, I’d be looking at an increase in my monthly payment. I like the idea of keeping it low, though my finances are not streatched thin by any means. I just like to keep recurring payments low.
So, longer story short, what cons am I over looking with a lease? I understand that I lose the option of equity. But that’s not a huge issue in my eyes. Am I missing anything? Or does anyone have an opinions about leasing, positive or negative, that they’d like to share? I’ve never leased, so it’s a whole new process for me.
I will mention we just bought my wife’s car from the same dealership about six months ago, so I know it’s a good dealership based on that experience.
Thanks in advanced, folks!
I feel like the advertised $199/month leases are unicorns that about nobody ends up with.
Mileage tends to be the biggest concern with leases, as overages cost big bucks. They will also charge you for every imperfection in the vehicle when you turn it in.
I'm curious why when driving so little, you're going to need to start "throwing money into repairs" on a 6 year old vehicle. A lot of folks that say this just don't seem to have the patience for any maintenance/repairs. It literally saves a fortune. The way I see it, you either do some maintenance and repairs every once in a while OR keep paying payments/interest and staying in the negative equity trap.
Case in point . . I put about $1300 into my 10 year old car in December 2016. If I think of that as a payment, I have been paying less than $100/month and this average only goes down each month until I need to put money in to it next. Similar to you, I go through phases where I barely drive at all. We are perfect candidates to pay off cars and have them last us YEARS with no payments.
Whatever you decide to do, don't roll over the negative equity. Throw some extra money at your current loan and refinance it (short term) and you could get it paid off and be payment free for 5 years. At the very least, if you MUST buy a new car, get to a point where you're not going into it underwater.
