Author Topic: Leased Car and what to do next  (Read 2132 times)

jpfromCO

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Leased Car and what to do next
« on: June 19, 2013, 03:59:30 PM »

I am currently 18 months into a 36 month lease on a Toyota RAV4 (preparing for Face Punch).  The payment (including taxes) is $290/mo.  I regret having leased it, and am considering trying to transfer the lease.  If I sold it and paid Toyota the buyout, I'd have to come up with around $2500.  I would have to replace it with something in the 5-6k range, based on how much cash I have on hand.  I woul dhave to dip into my 3-4 months emergency savings to do this. 

I love the car, it gets decent mileage and we do use the 4x4 capabilities in the mountains here in CO.  However, we also own (outright) a Nissan Frontier, so we probably don't need both.  I am concerned with safety, I spend a lot of time driving my kids, ages 1 and 3 around, and I want something safe and reliable, which was my arguement for leasing it in the first place.  Not to mention the increased insurance cost, and the fact that registering new cars here in CO is pretty expensive ($390 last year). 

A bit of background on my situation.  My husband and I bring in a combined $7200/mo net.  Our largest expenses (besides the car) are as follows:
Mortgage (with tax and insurance): $1300/mo
Utilities/HOA: $300
Day care for our two kids $2120/mo (OUCH, I know, but this is the going rate here in CO for quality care)
Phones: $100/mo (got one on Virgin Mobile finally and one still under contract)
Internet: $50
Insurance: $109/mo (I suck at driving and am paying the price)
Sat TV $85 (I know, it's GONE once the contract is up in September)
Savings $200 (outside of company 401ks, which we also contribute to)
Food: $600/mo
Gas: $400/mo
In the spirit of full disclosure, I also pay someone $80 every 2 weeks to clean my house.  I know, it's awful, but it's freed up so much time for me to spend with the kids and not cleaning since we both work full time.  Our only debt outside the house and car lease is $900 left in student loans, which I'm hoping to knock out next month.

Should I keep the car or is it the least of my problems?  Any other suggestions on what I should do next to cut this spending down?  We've come a long way but have lots more work ahead.

MountainFlower

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Re: Leased Car and what to do next
« Reply #1 on: June 19, 2013, 07:38:14 PM »
Is it possible for you and your husband to work out more flexible schedules to reduce daycare?  That's what we do.  We work longer days M-Th and then have every other Friday off.  We alternate the Fridays at home watching the kids.  The BEST part of this arrangement:  dad spends a full day every two weeks taking care of the kids and has since they were infants.   I think it has allowed them to develop a much closer relationship and dad understands completely what it's like to stay home with the kids all day....as in HARD WORK!!  LOL! 

If I understand the car situation correctly, you have another 18 months at $290/month, or $5220.  After that time, you'll have nothing.  If you come up with $2500 to buy out the lease, and then another 5K to buy a car, you'll spend $7500, but you'll have a car at the end.  If you buy a civic or something like that, it should last you several more years and save you lots of money in gas, so you'll come out ahead.  You already have a 4x4, so I guess, I'd probably do it with the assumption that you'll keep the replacement car for a very long time.   You might want to consider studded snow tires for the winter.  You'll find that a front wheel drive vehicle with studded snow tires will go just about anywhere you need to go on the front range (if that's where you are) in bad weather.