Author Topic: Poor vehicular decision. Could use some help from the MMM community  (Read 2246 times)

PXS1234

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I have a 4-year lease on a 2014 Hyundai Veloster. $300 a month lease and I am one year in. At the end of my lease I can purchase the vehicle for $11k, meaning I would be paying $25k overall if I include the lease payments. I cannot transfer the lease, and the current buyout amount is $20k. KBB prices the vehicle at about $17k. 31mpg combined and always drive on Eco Mode (not sure how much that helps). What would you do?

Possibility 1: At the end of the lease buy the car for $11k and drive it into the ground and hope it lasts 10+ years. Learn a valuable lesson.

Possibility 2: At the end of the lease walk away and buy a used vehicle.

Possibility 3: Get an auto loan, pay the $20k buyout, and sell the car. Risk losing $3-4K due to the discrepancy between the payoff and the KBB amount. Buy a used car.

Possibility 4: Pay Swapalease $100 and have them advertise my car to see if someone will pay the $20k buyout amount. Hope for the best.

Any and all suggestions and recommendations would be appreciated.

Kaikou

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Re: Poor vehicular decision. Could use some help from the MMM community
« Reply #1 on: September 24, 2015, 06:05:14 PM »
do you need a car? That's a factor.

PXS1234

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Re: Poor vehicular decision. Could use some help from the MMM community
« Reply #2 on: September 24, 2015, 06:13:49 PM »
do you need a car? That's a factor.

Yes. I have a great job but it's 31 miles away. No public transit, rural area.

justajane

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Re: Poor vehicular decision. Could use some help from the MMM community
« Reply #3 on: September 24, 2015, 06:58:43 PM »
That's a tough one. I would lean towards either two or three, depending on if you want to continue with the car you have currently and think about the bad decision you made for three more years. If you cut bait now, you can move on, but on the converse side, if you stick with the lease, you get to drive a nicer car for three more years. 

If you're driving 30 miles 5 days a week, it's going to have a lot of miles on it in three more years. That's going to affect the value and longevity of it. Would it be worth the 11K at that point? Do you like this car?

Possibility 4 don't seem likely at all to work.

DaveR

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Re: Poor vehicular decision. Could use some help from the MMM community
« Reply #4 on: September 24, 2015, 07:01:46 PM »
36 mo @ $300/mo = $10,800 left on your lease.

Getting out from under the lease right now is probably ~$4,000 net once you factor in transaction costs to buy and sell the car. Of course, that leaves you with no car.

So, can you get a used car for $6,000 that will have similar operating costs (gas, insurance, maintenance) for the next 36 months? That $6k needs to include transaction (tax, title, license) and financing costs.

And Possibility 1 will almost certainly be a bad financial option. But, if you get to the end of the lease and the KBB on your car is substantially higher than $11k it's easy math. Reality is that residual values are usually considerably higher than current market values.