From purchase to lease in 6 months?

Anonymous · ‎09-03-2017

I purchased a used 2015 in March of this year. I bought based on practicality and ended up with a basic sedan. I like the car, it has most features I want. It doesn't have any personality and I see 100 of them on the road a week. I have been looking around and found something a little more exciting and am considering a lease because in 3 years, my life changes will mean I can get something a lot more exciting. I'm not upside down, I'm about even because I paid less then market value for my car and had a trade with no loan. Is there any drawback to trading so soon after purchase? I don't foresee any issue with financing, my credit is quite a bit better than it was when I bought the car I have now. Any feedback on the lease decision? Thank you

bigpoppa09 · ‎09-04-2017

@Anonymous wrote:
I purchased a used 2015 in March of this year. I bought based on practicality and ended up with a basic sedan. I like the car, it has most features I want. It doesn't have any personality and I see 100 of them on the road a week. I have been looking around and found something a little more exciting and am considering a lease because in 3 years, my life changes will mean I can get something a lot more exciting. I'm not upside down, I'm about even because I paid less then market value for my car and had a trade with no loan. Is there any drawback to trading so soon after purchase? I don't foresee any issue with financing, my credit is quite a bit better than it was when I bought the car I have now. Any feedback on the lease decision? Thank you

There is no drawback to trading so soon i know alot of people frown on leasing but if u want something different every 3 years leasing would be perfect for u.

Anonymous · ‎09-04-2017

I currently have two vehicles leased and one conventionally financed...as long as you meet the manufactures top tier credit requirements and plan to keep the miles within guidelines then leasing is a great option! You have no negative equity when the lease is up (with the possibility of equity depending on the residual value of the vehicle purchased). With the economy in the current trend that we are seeing, interest rates for purchases are on the rise! If you plan to keep the vehicle after the lease is up then strongly consider the difference between a lease and purchase because there is a good chance that rates will be 3-5% higher in three years then they are now!

Appleman · ‎09-04-2017

If you bought a used car at a great price, depreciation may not have that big of an effect on the current value of your car. Make sure you check out KBB, CarGurus and even run it by a CarMax for a free buy offer to get the true value for your car.

In going from a loan to a lease, I am not sure if you lose the sales tax advantage or not? Meaning if I trade in my car worth $10,000 on a $20,000 car I only pay tax on the difference versus the full $20,000.

Anonymous · ‎09-04-2017

In most states you are charged on the lease payment / or the Cap Cost when it comes to taxes (every state is different)..,when it comes to the trade and the value of the trade...KBB is an estimate, CarGurus is an estimate...only CarMax will write you a check for your vehicle on the spot and for that they should be taken seriously!! Nothing in the world matters unless someone is willing to write you a check for what you have to sell! I'm waiting for someone to show me a check that CarGurus has ever actuallly written to a dealer...KBB offers to purchase your vehicle but I bet you wouldn't take the offer they give compared to their value they give before they start asking more detailed questions in the offer portion!

Anonymous · ‎09-04-2017

Thank you all for the feedback, especially the Carmax suggestion. I will see what they have to say about mine before I go to trade.

Appleman · ‎09-05-2017

I would not completely discount the information from places like KBB or CarGurus as they can show the current market for cars similar to yours. Remember if a car is for sale online, the dealer will offer you less for yours as they will need to make a profit.

I am still unclear if there will be a credit on the taxes paid on the lease with a trade in. If there is no tax benefit you will probably come out ahead by either selling the car to CarMax and having cash in your hand or better yet selling the car privately. Adding another piece (your trade) to a transaction like a lease gives the upper hand to the dealer. At the end of the day the dealer is trying to maximize profit. Profit is not a bad word but there are plenty of threads here that show how people unfamiliar with the process of buying a car have paid more than they should have....

Take some time to look at sales training and technique videos on YouTube. Plenty of information on how the dealer can maximize profit. Understanding and educating yourself will not completely level the playing field but it will help you keep more cash in your account.

Anonymous · ‎09-07-2017

I appreciate all the advice. I knew I could do better with selling privately but I really had no desire to deal with all that would entail when selling a car without a clean title. If it had been a local credit union, it wouldn't have been such a big deal. Carmax offered me the same as the trade in for my lease so I went that route. Thanks to these forums, I qualified for tier 1 financing through BMW and I now drive a MINI Clubman. Thank you, everyone.