Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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My suggestion - nothing very original - is to do the necessary repairs and hold on to the vehicle until you have paid it off completely and have a significant downpayment on your next ride.
I know that sounds harsh but there are a lot of us out here with cars at or nearing 150k. And besides, everyone tells me that Honda Odysseys have "bulletproof" reliability.
Rolling negative equity from vehicle to vehicle is simply deferring the inevitable - paying off the vehicle which you will have to do eventually.
30k/year on a leased vehicle ...OUCH!
(ii) next time you do this, put some money aside to pay for it. driving 30k/year is not free, any way you slice it.
(iii) what jlawrence said.
good grief.
-Mathias
Not a great option either, but like I said, it might be the lesser of many evils.
Regarding the longevity of your Oddy, the only problem areas that I've heard of is the transmission (who hasn't heard of that one), and warped brake rotors (suffered by both of the Oddys in my neighborhood and fixed with cross drilled rotors).
Best Regards,
Shipo
What MOST people do not realize when they are leasing is that they are RENTING the car. You are paying by the mile. If you use more than you agreed to, you had better put some money aside to cover the mileage miss.
Personally, as a fleet manager, most of my fleet drivers drive between 10-15k per year. Therefore, I set up a depreciation over 50 months so that after four years, I am always (usually) able to sell the car for a profit.
If I lease a Toyota or Lexus, I may go out 60 months due to the higher residual value.
I just inherited a company driver who puts 45k miles per year on a car. With him, I depreciate the car over 30 MONTHS. That means I am paying a HUGE lease payment on a $25k car (Grand Prix).
Those cheap lease payments that everybody is attracted to are only suited to those who can meet the 10-12k miles per year limits.
Very true, My 1995 Fleetwood has over 185,000 miles on it and it still looks and runs like a new car! :shades:
I have about 4 months left on my lease. Im about 800-1000 upside down so to speak. I have a lot of upcoming trips and if keep my current car I will go way over the miles.
Whats the best way to handle this with the dealer? I have 2 that are about the same price on the pilot so I can play them againsit one other. They have given me the price not even knowing I have a trade.
Any advice would be nice. I could pay the lease off ealry and give back tto Jeep. My Jeep dealer keeps sending me stuff saying then need 2004 Jeeps and so on.
Thanks for any adivce.
Mark
It certainly won't hurt to try, but consider what it would cost you to just park the jeep for 4 months (or use it limitedly) and turn it in at the normal time.
You could mention your situation to the dealer from which you are buying the Pilot, but don't expect any miracles. They have given you an out-the-door price with no trade and now you are adding a trade-in to the mix, and the remaining payments have to come from somewhere.
OTOH, the overmileage is usually 15 c/mile or so. That's pretty cheap if nothing bad happens... I doubt the miles on the Pilot are going to come any cheaper...
-Mathias
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
-Mathias
Turboshadow
Good point though about the payments. The logic to park the lease car to avoid excess miles only makes sense ifyou already have another car to drive. If the payment clock on the Pilot is going to start 4 months earlier, then you will be doible dipping.
But, back to the jeans pocket, you are going to pay for the next car anyway, it's just a matter of when you start (that is, start now for 36 months, or wait 4 months and pay for months 5-40).
I think this is a long winded way of saying there are 3 costs to be paid. 4 lease payments, payments on the Pilot, and excess mile charges. Only the mile charge can be eliminated. The other 2 are going to be paid, the only variable is a 4 month possible swing on when.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Assuming of course that the car being traded in is fully paid for.
Thank you all in advance.
Is there another reason you want to get out of your current car that you have not told us?
Forgive me if I'm misreading your post, but you come across as financially undisciplined. This car was apparently an impulse acquisition. I suspect that you jumped into it without doing much in the way of research. For one thing, a car lease should never run beyond the warranty period. That's Leasing 101. You're probably not a good candidate for leasing. You say that you'll be 12-15K over the mileage limit at the end of a 5-yr, 60K lease. That means that even with a 15K/ year lease, you'll be bumping up against the mileage limit. You'll have no margin for error. Leasing works best for folks who know they won't exceed the mileage limit & who are firmly in control of their financial lives. That doesn't seem to describe you.
Stick with the Highlander until the end of the lease, doing whatever you can (carpooling, public transportation) to hold down the miles. Then buy something & keep it for at least a couple of years after you've paid it off. You might also consider seeking professional financial help.
I disagree with you on the extended warranty... mostly 'cuz I agree with you on not leasing past the warranty period. $800 my foot.. I bet that extension to 5 years cost $1,500 or so... and one half of an AC failure later, you're even... even Lexus builds a clinker now and then.
I also think the original poster should do the math again and think about it... for as loaded and expensive as the car is, $3,300 down + $365/month is not a bad deal *at all*.
And the over-the-limit charge of $2k or so is nothing but the cost of doing business.. sounds like 20 cents/mile or less.. that's pretty darned good for a luxo SUV... if you were driving a cheap Camry, you'd be spending 10cents/mile at least... I'd definitely keep the Lexus and not worry about the "lousy" deal... I think it's pretty good.
For comparison, I bought an '03 Sienna for $3,800 down and $20k financed at 0%. That was $556/month for 3 years and then I owned it... that's very similar to $365 for 60 months... so if I pay the same you pay, I'm left with a $9k vehicle that I own after 5 years... at best...
You are left with -0- but you've driven a $35k car, not a $22k car. Sounds fair to me. Maybe you don't need "professional financial help" after all.
-Mathias
Most of the folks who come to this forum for help are burdened by some combination of too much debt & too little savings. Would a $2K mileage charge really bother the OP if she had a decent amount of money in the bank?
Your making a huge mistake assuming that people do a proper job of managing money. If they did I would agree..but after reading credit reports for many moons I can tell you that a large number of people do a terrible job of managing money and live paycheck to paycheck. This leaves no room for an unexpected major repair bill....so now the guy is faced with a $3000 repair bill and no money...what do they do? if they had the warranty it wouldnt be an issue.
stick it out. You have a nice car to drive for the next 44 months. In this case, i would suggest getting an extended warranty (normally I would not) not unless you have sufficient savings to cover anything major. I believe the vehicle has 5 year/60k powertrain warranty so your transmission and major engine components are covered for the lease period. You'll still have to pay for brakes, tires, maintenance, etc. this is why most people only lease up to a 3 year period. Minimal out of pocket cost do to maintenance. Tires and brakes normally last 3 years and maintainence during this time is mostly oil changes.
good luck.
You are right about the 5/60 powertrain warranty, although I think the poster was planning to be over miles. But, on a Toyota 9and the highlander has proven to be reliable), even if you hit 75K in 5 years, the odds are in your favor that nothing expensive is going to go wrong (that would be covered by the warranty).
Maybe if you were planning to go out 7-8 years and 100k the warranty would make sense? But for 5 years, i like the idea of putting the cost of the warranty into a bank account instead
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
She owes over $16k just in lease payments, plus you have the residual that needs to be paid to the leasing company. Probably over $27k total. The car is only worth $22k. That is lot to roll over into a new car loan.
I agree the Highlander has been reliable. The extended warratny is more for the OP peace of mind. Personally, i would roll the dice and not purchase the warranty.
Thanks for the advice. I haven't been online for a few days. I'll explain. This wasn't necessarily an impulse buy - I knew I wanted a Highlander - however, you are correct in the Leasing 101 department - I never did a lease before in my life and yes I got taken. dtownfb is right on the money as to what I am upside down so I might as well keep the HL until the lease is up and suck up the losses on extra mileage and such. If I do plan to lease after this, I am well-armed to do so. I didn't find Edmunds until after my lease - I had used KBB before. I wish I had - I really would have known what I was doing. Financially, I could afford to pay for repairs or even pay the amount upside-down, no problem. To me that doesn't make financial sense though (the paying off) cause I probably won't get exactly what I want after that for similar lease payments. Actually, I figured it out and the only way it made financial sense was that is I was only 3K upside down, I'd even out because if I did pay for the warranty and the extra mileage, I'd be actually paying about $441 a month (~$2600 (mileage) and $800 (warranty)). Unfortunately, I couldn't do that. Yes, I realize I made a huge mistake leasing for 5 years (apparently not the only one since I saw a few people in similar situations on the lease swapping sites including one that went for 6 years) but I guess we'll have to call this a lesson learned and I'll know better for next time. Thank you all.
Our plan is to add $200 over our regular payment to reduce the debt we owe. Expected to have about $3k for down payment on the Acura TL. As of right now, I think the '03 TBlazer with 90k miles is only worth $5k.
Does anyone have a really rough idea what the payment will be when it comes time in October 2007? Our credit is good, so no issues there. With online companies like e-Loan, People First, is it possible they would do a deal like this?
Thanks for any input!
This question can't be answered with the information that you have provided. You need to provide the current loan balance, term of loan and interest rate to be able to calculate a payoff balance.
Also, if your car loan has a prepayment penalty, the cost of accelerating your loan payments may end up costing you, not saving you.
My suggestions to you:
(1) Assess your overall financial situation and prioritize your loans. If you have credit card debt at 18% and a 7% car loan, for example, then paying off the credit cards is a better use of your money. All things being equal, pay off the higher interest rate loans first.
(2) In the future, don't buy cars on payments. By focusing on payments, it is more likely that you will pay too much for your car, get too little for your trade-in, pay too high of an interest rate and/or get bad terms, such as high "origination fees" and prepayment penalties in your loan documents. Instead, negotiate the purchase price as low as possible, then borrow the money with the lowest rate and best terms possible, and you will end up with the lowest possible payment naturally. If you can't afford the payment that is the result of that number crunching, then you can't afford the car.
Whatever you do, keep paying it down until you have no more negative equity. You do NOT want to keep rolling over balances again and again. It will only get you in deeper and deeper.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
As mentioned earlier, you need to supply some additonal information. It looks like you are trying to do as much as possible to pay this vehicle off in the next year or so. At your current pace, you'll have close to 120k on the vehicle. Check to make sure it is a simple loan and no prepayment penalty in the contract. With the extra $200 in each payment, it should help reduce the loan. It probably won't be paid off by next October, but you will ahve a manageable amount.
If you like the Acura TL, you should consider the Accord EX. About $5000 cheaper and not much difference in performance.
I'm done with SUVs except MDX, pre-owned or new (which is going for $40k). Other than the Acura SUV, I don't see any others that I like. Ridgeline is too small. In a nutshell, I prefer a car.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
That being said, rolling over negative equity is a good way to make yourself a slave to debt. You might consider whether you'd be better off with a cheaper car and a savings plan.
I don't think that anyone advised you to buy an unreliable car. I hope that you're not saying that the only reliable car sold in the USA is a new Acura TL!
Yes.
I agree with Bobst. Rolling negative equity into a new car loan is always a bad deal. Period.
Just another idea!