Questions on leasing

[Matts00GT]

So I have a few specific questions on leasing. Please do not say "stupid, don't do it, etc.." I know what a lease entails and in this situation, it is probably the best route.

However, I do have some questions. I'm looking at trading my 2009 Silverado in towards the lease. Based on the trade-in figure they gave me, I'll have about 5k in equity.

My question is, how does that equity affect my monthly payment?

As they showed me, they deduct my equity from the price of the new vehicle. But that doesn't seem to benefit me in anyway since I'm not buying the new vehicle.

Am I thinking about this in the wrong way? Shouldn't a lease be the same price regardless of my equity? Could I request a check for my equity remainder?

 

[ModularFan]

Prices are neogoatiable, typically you don't put down as much on a lease then you do on a financed vehicle, typical a lease you'd only be putting down 5-10% as opposed to 15-20% on a financed vehicle. shop around, has the dealer offered to pay off your loan?

 

[Matts00GT]

Prices are neogoatiable, typically you don't put down as much on a lease then you do on a financed vehicle, typical a lease you'd only be putting down 5-10% as opposed to 15-20% on a financed vehicle. shop around, has the dealer offered to pay off your loan?

Yes. And that's what my question pertains to...What happens with my $5k in equity as I certainly do not want to put $5k down towards a lease.

 

[ModularFan]

Yes. And that's what my question pertains to...What happens with my $5k in equity as I certainly do not want to put $5k down towards a lease.

You don't have too, but if it will lower your payments, then do it, but realize that whatever you put down you won't get back, you only pay up to the residual value of the vehicle. So say the Vehicle is 50K, you may only pay up to 25-30K when all said and done.

IMO, If I had to put down more then 5-10% down on a leased vehicle i wouldn't do it. I much rather put towards financing it, Nothing about buying a vehicle is an investment, its the worse investment in all honest.

Are you absolute need for a vehicle, perhaps look for something that you can afford to fianance. cause when the lease is up you won't have anything to show for it.

 

[Matts00GT]

You don't have too, but if it will lower your payments, then do it, but realize that whatever you put down you won't get back, you only pay up to the residual value of the vehicle. So yea the Vehicle is 50K, you may only pay up to 25-30K when all said and done.

IMO, If I had to put down more then 5-10% down on a leased vehicle i wouldn't do it. I much rather put towards financing it, Nothing about buying a vehicle is an investment, its the worse investment in all honest.

Are you absolute need for a vehicle, perhaps look for something that you can afford to fianance. cause when the lease is up you won't have anything to show for it.

See I don't want to put 5k down either even if it lowers my payment a lot. If I were to get in accident, I'd lose whatever money I put down.

Is it unheard of for a dealer to write me a check for my equity?

Also to address your edit, the lease works for my situation in that I only want the car for 3-4 years, I will drive under the allotted mileage easily, and I dont want to worry about maintenance or selling the car in a few years. Also the car will not be modified. Either way I would lose money on depreciation of buying a car so renting it vs buying it makes no difference to me as the vehicle will not appreciate as a house would.

 

[ModularFan]

See I don't want to put 5k down either even if it lowers my payment a lot. If I were to get in accident, I'd lose whatever money I put down.

Is it unheard of for a dealer to write me a check for my equity?

You don't have to put the trade in offer towards the vehicle, you can have them write you a check for that. if you don't owe anything. To protect you from losing equity if an accident were to occur, it be best to get gap insurance this would protect you from any lost value if something were to happen.

You can also not opt to be anything down on the lease and just try and neogatite the price of the vehicle. the best thing to do, is calculate miledge rate, options etc, and try to find a vehicle within 2-3 years old, this would give you a rough idea of what your residual value should be.

 

[jenkins_1120]

http://www.svtperformance.com/forums/road-side-pub-17/816423-leasing-good-idea-not.html

 

[Matts00GT]

You don't have to put the trade in offer towards the vehicle, you can have them write you a check for that. if you don't owe anything. To protect you from losing equity if an accident were to occur, it be best to get gap insurance this would protect you from any lost value if something were to happen.

You can also not opt to be anything down on the lease and just try and neogatite the price of the vehicle. the best thing to do, is calculate miledge rate, options etc, and try to find a vehicle within 2-3 years old, this would give you a rough idea of what your residual value should be.

I will be adding GAP insurance but GAP still wouldnt cover a large down payment which is why I do not want to put one down.

Also you say I can have them write me a check if I own the vehicle, but I don't own the vehicle outright. I'll add figures so you see where I'm at. They've offered me $20k for trade-in on my truck. I only owe around $15k on the truck. They can pay off the loan and then write me a check for my equity of $5k?

http://www.svtperformance.com/forums/road-side-pub-17/816423-leasing-good-idea-not.html

Already read through that and nothing in there addressed my original question.

 

[ModularFan]

I will be adding GAP insurance but GAP still wouldnt cover a large down payment which is why I do not want to put one down.

Also you say I can have them write me a check if I own the vehicle, but I don't own the vehicle outright. I'll add figures so you see where I'm at. They've offered me $20k for trade-in on my truck. I only owe around $15k on the truck. They can pay off the loan and then write me a check for my equity of $5k?



Already read through that and nothing in there addressed my original question.

Yes if thats what you so choose, if you choose not to use the positive equity into the down payment, you can simply ask them to write a check and walk away.

Put it this way, anybody can walk into a dealer and just trade in their vehicle and walk away! the positive equity they give you is yours to do whatever the hell you please with, no one is gonna put a gun to your head to force you to use that as a down payment.

 

[Matts00GT]

Yes if thats what you so choose, if you choose not to use the positive equity into the down payment, you can simply ask them to write a check and walk away.

Put it this way, anybody can walk into a dealer and just trade in their vehicle and walk away! the positive equity they give you is yours to do whatever the hell you please with, no one is gonna put a gun to your head to force you to use that as a down payment.

Gotcha. Makes sense. I've just never leased a car so generally when I purchase one, I just put the equity into a down payment on the new vehicle.

But on a lease, putting a down payment seems to be a no-no.

 

[SVT F15O]

I will be adding GAP insurance but GAP still wouldnt cover a large down payment which is why I do not want to put one down.

Also you say I can have them write me a check if I own the vehicle, but I don't own the vehicle outright. I'll add figures so you see where I'm at. They've offered me $20k for trade-in on my truck. I only owe around $15k on the truck. They can pay off the loan and then write me a check for my equity of $5k?

There is no reason why they couldn't write you a check for the equity.
Just remember, when leasing the extra money could lower your payment quite a bit.
You're paying it either way so it is your decision if you want to pay it now or pay it all over the life of the lease.
Plus with acquisition fees, first payment, tax, tags and title fees you are most likely going to have to put some money down regardless.

I just leased a new car yesterday and I put a good chunk of change down to keep the payment low. That is what I wanted to do though, I didn't have to.

 

[SVT F15O]

But on a lease, putting a down payment seems to be a no-no.

Why do you say that>???

 

[Matts00GT]

There is no reason why they couldn't write you a check for the equity.
Just remember, when leasing the extra money could lower your payment quite a bit.
You're paying it either way so it is your decision if you want to pay it now or pay it all over the life of the lease.
Plus with acquisition fees, first payment, tax, tags and title fees you are most likely going to have to put some money down regardless.

I just leased a new car yesterday and I put a good chunk of change down to keep the payment low. That is what I wanted to do though, I didn't have to.

Why do you say that>???

From leasecompare.com:

" Because you pay for the use of a vehicle during a lease, you should put as little money down as possible, up front. Although putting money down can lower your lease payments (by reducing your capitalized cost) in most cases it cannot be regained in the event of early termination due to a loss.

For example, a customer once leased a Toyota 4Runner and put $3,000
down as a cap reduction. Five months later the vehicle was totaled in an
accident. The client's insurance paid its portion of the lease payoff and
Gap Insurance paid the balance. Our client walked away with only paying
his insurance deductible but he did not get reimbursed for his initial down
payment of $3,000. It was lost.

The moral of this true story is to put as little money down as possible,
ideally no money down. Here are some other things to consider:

Money down is taxable
Take the money you would have put down and invest it
Put your down payment in a savings account and use a portion each month to help make your lease payment"


You're right though. Eventually you pay it either way, but by not putting down a down payment, it gives you a little less risk in case of an accident.

 

[ModularFan]

From leasecompare.com:

" Because you pay for the use of a vehicle during a lease, you should put as little money down as possible, up front. Although putting money down can lower your lease payments (by reducing your capitalized cost) in most cases it cannot be regained in the event of early termination due to a loss.

For example, a customer once leased a Toyota 4Runner and put $3,000
down as a cap reduction. Five months later the vehicle was totaled in an
accident. The client's insurance paid its portion of the lease payoff and
Gap Insurance paid the balance. Our client walked away with only paying
his insurance deductible but he did not get reimbursed for his initial down
payment of $3,000. It was lost.

The moral of this true story is to put as little money down as possible,
ideally no money down. Here are some other things to consider:

Money down is taxable
Take the money you would have put down and invest it
Put your down payment in a savings account and use a portion each month to help make your lease payment"


You're right though. Eventually you pay it either way, but by not putting down a down payment, it gives you a little less risk in case of an accident.

You never get back what you put into a vehicle! plain and simple, unless its some classic car.

 

[Matts00GT]

You never get back what you put into a vehicle! plain and simple, unless its some classic car.

Yes, but if you put it in all at the beginning on a lease vs paying it later with regular payments, you don't lose that down payment if there's an accident.

 

[ModularFan]

Yes, but if you put it in all at the beginning on a lease vs paying it later with regular payments, you don't lose that down payment if there's an accident.

True

 

[ModularFan]

IMO, I would buy a used vehicle, The deprecation is already accounted for. and you save thousands.

 

[thepizz]

When i first got married, i traded in my wifes Civic and leased her an A4. It was paid off and they valued it at 8k. I put 2k of it down and was cut a check for the 6k the day we signed the papers and took delivery of the A4. It was clear cut and simple.

 

[SVT F15O]

You're right though. Eventually you pay it either way, but by not putting down a down payment, it gives you a little less risk in case of an accident.

I never really thought about it in that sense. I guess I better not wreck this thing anytime soon!

BTW, what are you looking to lease>???

 

[Matts00GT]

I never really thought about it in that sense. I guess I better not wreck this thing anytime soon!

BTW, what are you looking to lease>???

It was a 2012 Audi A4 but I've decided to hold off for now.