tommyjeans

hey all, i need your help asap.

i'm looking to lease a cheaper car and trading in my Type S but i am upside down on the deal. however the new dealer is willing to tack on the difference into my total which is fine... my monthly will be cheaper and by the end of the lease, i will be slate clean of both cars.

because i am upside down quite a bit on the TL by trading it in, the dealer suggested i do a 48 month lease to lower my monthly but at 36 months, i can always trade it in for another car....

has anyone ever been able to do this or is this all a trick to get me to lease the car?
i haven't ever heard of this before, usually you have to see the lease through or do a lease swap...and continue doing payments til its paid in full?

thanks for any help

charliemike

I would not trust a dealer to give me financial advice.

NSXNEXT

iTrader: (2)

Sounds too good to be true. Have them show you the numbers.

Sarlacc

If youre upside down, you usually fucked end of story.

te3point5

I agree, it doesn't make sense that your monthly will be better but I guess it depends how upside down you are on the lease.

charliemike

He's upside down but he's probably being fingercuffed by the dealer too

tommyjeans

TL is a purchase, the new car is a lease. i'm looking to get a house so i'm leasing the cheapest car i can find thats decent.

thats why the monthly is lowered. i mean of course i am loosing in every possible way but its the least painful one and it clears me of the TL.

tommyjeans

more in terms of getting raped in every possible position. me

dealer =

Sarlacc

Sell the TL privately and eat the loss.

Moog-Type-S

sounds like a bad move to me.

black label

Did you lease or finance the TLS? Leasing is a great way of setting up a "3 year clean up" plan for an upside down loan. How much inequity (in $$$) are you dealing with? Acura is going to cap the Capitalized cost at 110% of MSRP so if you are $10000 upside down, you're screwed.

If the money factor on the TSX lease is better than the APR on the TL loan, then you are refinancing your negative equity at a lower rate which can be a good thing. In 3 years you will have no financial obligations to either car and can start with a clean slate.

tommyjeans

i'm actually downgrading to a vw.

TLS is a financed, only had since nov 07 but we decided we may be in a position for a house end of next year so i'm making preparations to rid as much liability as possible.

i'm upside down 10k if i trade it, i can try to sell it at private party but it may come out to be about 30k for the car, in which case i'll be down 8k instead of 10k but the car will only depreciate more with the 09 model coming out soon plus market conditions. so overall it may come out to be the same in the end.

money factor is a little less now (1.4% less) BUT i haven't checked my credit yet, i will do it tonight, hopefully it will turn out to be that way.

thats my goal, to have a clean slate in 3 years and start over...smart...hopefully.

black label

I'm not sure how VW financial does things in terms of rolling inequity into a lease. If it's the same as Acura figure it this way......

If the car you are looking at is $30000, the most they can use as a Cap Cost on the lease is $33000. What you would be relying on is that they have another $7000 that they can (and hopefully will) discount on the VW. If that is the case then you have your 10K of negative equity resolved.

However, lets say they only have another $4000 they can discount. In this situation you would need to come up with $3000 to make it work ($3000 over MSRP cap + $4000 discount=$7000 of negative equity covered).

Do some research on VW leases, you may just want to call the VW dealer and ask to speak with the finance manager to see where they are capped on Capitalized Cost for leases.

From my experience, what you are looking at doing is a good clean up plan. You could just keep the TLS, but you are going to be upside down on that loan for another 3 years unless you start throwing extra money at them each month.

tommyjeans

i just got back from VW couple of hours ago. the new car is 21k + 10k neg eqt, so i will be leasing 31k @ roughly 4.3% (still need to check my credit).

they said it should be ok but in order to lower my monthly they had to extend the loan to 48months rather then 36, but finance mgr said i can trade in the car at 36 if i want for a new one.

my question is, will any other dealers want to take over the lease and give me the new car...?

tommyjeans

later on after my 36months is up

SakiGT

Dude. This has "bad idea" written all over it.

First off, if youre making enough money, the bank will finance you a mortgage even though your monthly payment is, what, $200 more? How much of a difference are you saving monthly?

Secondly, youre putting yourself into an awkward financial decision right before you make the largest one of your life. You sure you want to do that?

The VW will depreciate more than the Acura over the next 4-5 years. Youre gonna lose out.

tommyjeans

there's more to it then just the monthly, it also comes down to the total value of the vehicle too. having an extra 20k in cash toward the down on the house allows us to get into the door quicker as well.

tommyjeans

thanks everyone for your 2cents, good thing i went on here before making my decision or would have regretted it going w/ the VW.

found another solution =)

NSXNEXT

iTrader: (2)

Did you consider what happens if you were to total the lease? Insurance would only pay you FMV on the vehicle which means you'd be getting a bill for the totalled car.

Good to see you're looking at alternatives.

joerockt

You're about to buy/lease 2 cars within a year and you want to get a loan for a house? Good luck with that...

tommyjeans

what the bloody hell are you talking about? lol

i dont think you read the posts correctly. read it again.

tommyjeans

i have full coverage up to 300k. insurance covers up to 50k that is totaled. which more then covers the car i am leasing.

joerockt

You bought your TL in Nov 07, and now you want to lease another car. Those two purchases plus the inquiry's for credit will be on your CR for a few years, regardless if you sell the TL...

So again, good luck with that...You don't buy and lease cars right before you want to purchase a home. But you seem to be a financial genius, so I shouldn't have to tell you this...

godfather2

you couldn't be any more correct

O-Town_TypeS

I think he means that you keep buying/leasing expensive items in a short period of time can come up as a negative on your credit...he's right.

O-Town_TypeS

oops....didnt see your response

tommyjeans

hahahahahahahahaahahhaahhahahahahahaahhaha
thanks for making me laugh this early in the morning dude.

i can see you're either not getting what i and many others have said in this thread or you just didn't read it thoroughly

so i shall summarize:

i'm getting OUT of my TL by leasing a CHEAPER car in order to get my house by end of next year or early 10. i don't have two cars nor would i be dumb enough to lease/buy two cars in a year even if i wasn't buying a house...

i understand the situation is bad but that's the nature of the car hobby...

i'm not THAT insane

tommyjeans

i know the situation is grave but if i keep it, it would be much worst. its the car business, only the dealers win

O-Town_TypeS

One more thing to consider when you are leasing is your mileage...I'm sure you already did though.

I leased once and then about a year later got a new job that required a lot of driving. I got burned in the end because I had to pay an overage in miles. It came to about $2000 All those door dings you get may require you to pay as well.

I leased once and will never do it again.

O-Town_TypeS

It's the credit enquiries thats what he's talking about. That shows that you could be a potential liability. Banks don't want to lend to you short term...if you're buying and selling often they will hit you up with a higher rate.

Trust me...I'm screwed with my credit for a long time. I'm just now growing up....finacially

tommyjeans

yea this isn't my first lease, i only work 15miles round trip and don't really travel much because of gas prices lately so not too much of an issue.

the finance mgr at vw told me a "secret" to leases is that, if you have door dings or curbed your wheels, trade it in or sell it at the last 3 months on the lease, the dealer or new buyer will be responsible for the car after that. this is if you need another car, if not then well you got pay for it.

not sure how true that is, will ask around.

thx

joerockt

Which you said you purchased on Nov 07. Just because you sell it, it dosent mean the purchase and the inquires for credit arent on your credit report.

Which will also be on your credit report.

Anyway, it sounds like you know what your doing and besides, mortgage company's have made it so much easier to get a loan these days...

Hope you're still laughing...

tommyjeans

inquiries clear every 2years, by the time i apply for the house, most of mine would be cleared. i haven't applied for any credit cards in over 5 years. only inquires i got was when i was looking for a loan for the TL back in nov07, by 2010 it should clear completely. they allow you 2 freebies on inquiries, then 5 a year afterwards, anymore after that your score is dinged.

that makes two of us, i'm growing up financially too. tough lessons.

tommyjeans

i know it is on my inquiry, it will show as closed and paid in full satisfactory. inquiries clear every 2 years. read my post below.

i've already started working with a real estate agent and the mortgage company on my current house last month. they've told me exactly what i need to do and how much $ down i need to secure my new house.

i check my credit report 2-3 times a year to track changes. will do it more often as i get closer to buying the house.

yes i am still slightly humored because you assumed i am flying blind into this.

Nightpoison

Its good that your covered up to 50K, but that doesn't mean they will cover your full expense. If the Car only books out at 18k and your lease buy out is 25/26 then your still in the hole.

O-Town_TypeS

After reading my post I can't spell worth crap

I honestly don't believe you would have a problem even if both show up in 2 years...it's not a huge deal. I was just hoping you didn't have the attitude that I used to have where I thought it wasn't a big deal to keep dinging at your credit. I'm sure it will work out fine.

tommyjeans

lol

trust me i was where you were about 3-4 years ago then realized how important that number was when i went to the dealer. we are just a 3 digit number to banks.

thanks for your

charliemike

ROFL ... That's probably personal injury liability and has nothing to do with your car. You're telling us you insure a $30k for $50k? WHY?

Holy Jeezus.

tommyjeans

its the level they set me at for my coverage. if i go lower, it wouldn't be enough to cover it. better be safe then sorry right?

plus i only paid $803 a year for full coverage on the TLS.

PolishPete

Your liability coverage reads

100 / 300 / 50

100 = bodily injury to others (single person)
300 = bodily injury to others (total for the accident)
50 = Property damage to others

If you hit a Ferrari and total it, your insurance company would cover $50K in property damage for that car, you would cover the rest out of pocket.

Now that limit does not apply to your car. If your car is worth $10K but your loan is $20K...you're only getting $10K and you're in the whole for the rest (except if you get gap insurance, I've been lookin at Audi's leases recently and they come with gap insurance). Same applies if your car is worth $100K. The $50K only applies to property of others.