06-19-2013 04:38 AM - last edited on 06-19-2013 06:39 AM by llecs
Great answer(s) folks, while the origination of this post is dated, hopeful the community can provide some feedback.
Need to make action on my current vehicle. My situation is currently upside down on 2005 Nissan Altima. Car has 137,000 and in need of roughly $1,500 of repair. Payoff is $6,502 or $239 per month @ 7.2%.
Original loan was secured in 2009, private sale, under value, however just purchased a home one year earlier and A/C quit, dead, in Florida. Long story short, was able to take collateral loan from Credit Union and paid off original loan and borrowed $4,000 and rolled into existing loan mentioned above.
Trade in value as all can appreciate is relative, however essentially negative equity just under/over $3,000 into used (new to me) loan.
Goal for budget for updated vehicle is $250 per month, however with negative equity looking at 'used' vehicles at $10,500 - $11,500 range. Mileage and car condition make serious play in overall consideration of used vehicle, in theory, attempting to avoid same situation 5-6 years from now.
Was presented yesterday with lease option on 2013 Kia Optima LX (convenience package, include touch screen CD and backup camera), 15 miles on the vehicle, 100k Warranty for 3 year, 36,000 mile lease at $289 per month with 1,000 down.
The above will include above market trade allowance and payoff of current loan.
Question for review is the new $289 per month vs $250 per month (+$39 per month) in additional carrying cost worth it from a lease perspective given the above negative equity payoff vs my original intended budget and search for vehicle.
Welcome your thoughts and recommendations, looking to take action this afternoon, appreciate prompt action and support.
06-19-2013 06:40 AM
OP, I split your post to form a new one here. You'll find that most tagged-on older threads will get ignored if bumped. I had to edit the title, but changed nothing else. If you'd like to change the title, click "Options" and then "Edit Message".
06-19-2013 09:34 PM - edited 06-19-2013 09:35 PM
My answer today is the same as it was to the other poster last year (where you started your post).
Leasing, in my opinion, is a terrible thing to do. When you lease a vehicle, really anything, you are paying to use the vehicle (or item you leased). You don't own it. It is a debt you are taking on and at the end of the lease you have nothing. So all you are buying is a liability.
You have a $1500 short term problem (repair). Fix the vehicle, they are meant to last much longer than 137,000 miles. Take that extra time to accelerate the paydown of your current loan so you won't be upside down. Or, gather up all the things around your house you don't need and sell them on Craigslist or eBay and apply that money to your vehicle loan. Or get a second job for a few months and put that paycheck toward the vehicle loan. In short order if you do one or all of the above you will have the negative equity paid off plus a healthy down payment to apply toward that lovely vehicle you covet.
I'm not saying to not get another car/vehicle. I am saying get your financial house in order first so you don't end up carrying the negative equity forward. Good Luck.
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