Negitive equity and leaseing a new car.

itradeoften

I have a negative equity of $3000 on current car. Is leasing a new care a good way to make up the difference?

texases

Nope, you'll carry it over, still have to pay it through higher monthly payments. No way to get out of the current hole? Keep it and pay until you're no longer negative?

kyfdx

Ditto

Mr_Shiftright

Negative is negative--it can't be erased by anything other than throwing money at it. I suppose rolling negative equity into another lease is better than rolling negative equity into a 72 month car loan however, but it's really never a good idea with lease or purchase if you can avoid it.

Michaell

Not to pile on, but I'll agree with what's been said here. Is your current car reliable and not costing you a lot of money on repairs? If so, just ride out the current loan and eventually you'll get out of the hole.

$3000 works out to about $84/mo on a 36 month lease. If your lease payment should be $250/mo, then it will be $334/mo, before tax.

Mr_Shiftright

Well that's not too painful, but it somewhat neglects the biggest advantage of leasing, which is being able to driver a somewhat nicer car than the one you might purchase.

Michaell

Mr_Shiftright said:

Well that's not too painful, but it somewhat neglects the biggest advantage of leasing, which is being able to driver a somewhat nicer car than the one you might purchase.

I suppose it depends on the price range of the new car. In my example, the negative equity is 33% of the payment. If the lease payment is $500, $84 is closer to 20%.