Author Topic: Spend 12k I Don't Have? (Car Lease Mess)  (Read 1841 times)

cazio

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Spend 12k I Don't Have? (Car Lease Mess)
« on: December 15, 2018, 11:55:50 AM »
Hi friends,

I'm six months away from my car lease being up. Yes, I leased a car at the advice of my Dad when I was 20. I don't necessarily regret it either, as I've put my car through hell and back (required driving for work sometimes doing 400 miles a week, reimbursed) with very few problems so far.

My problem is that i've racked on the miles and fully expect to exceed my lease agreement of 36,000. I'm at 33,800 right now and I have the car until May.

I feel like I'm just afraid of extra work, but right now I'm leaning toward the easy choice of buying my leased car for the residual at the end of my lease. I drive a 2016 Honda Civic and I know I'll be able to drive it into the ground. Residual is expected to be around 12k.

I have several options:

1) Turn in car lease and pay extra mileage fees (probably somewhere like 3k total with other turn in fees), buy cheap car
2) Sell Civic to third party and pocket difference, use that to buy cheap car
3) Buy Civic for residual value of $12k

My problems (excuses) with these are that I have no idea what state I'll be living in or what the rules are for selling the car when my lease is up. I got the lease cosigned with my dad in Ohio and it's registered there. But I highly doubt I'll be living in Ohio when my lease is up. I can turn in my lease at any Honda location.  Currently living in GA - would I even be able to sell it here or would I have to sell it in Ohio? I also work 12hr days 5 days a week, so I'd have little time to meet with buyers.

My other problem is that my job currently requires a lot of driving until I bump up. Going without a car for even a few days will require getting a rental, and I'm under 25 so these would be very expensive. I'm also worried about buying an older car--everyone else I've worked with over the past 2 years at my level has had their older cars break down and ALL have needed to buy new cars thanks to mechanical issues associated with wear and tear.

I'm also worried I'll not be able to catch potential issues with buying a cheap car and screw myself over. My dad advocates new or buying used from a Honda dealer, so I'd be spending probably 8k if I did that. I trust Honda but my friends drive older Toyotas and love them. I also kinda of want a hatchback, but an economical one, not like a CR-V.

I personally don't think 12k for this Civic is that much (a 2015 civic with 45k mileage is going for 16k in the area) but 12k will double my debt. I've already been saving up for a big down payment, but I don't think it'll be possible for me to pay 12k in cash unless I wipe my EF (roughly $6.5k but will probably be more like 4k as I'll be unemployed for a few months soon).

Right now I want to just pay the 12k (thought I want to negotiate that lower) with a big down payment. I would be able to pay off the car in under 12 months if I wanted to.

Any advice? Happy to clarify more, I know this is a word dump.

Freedom2016

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #1 on: December 15, 2018, 12:32:11 PM »
You can't sell something you don't own. At the end of your lease you either turn the car in, or buy it.


Morning Glory

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #2 on: December 15, 2018, 01:59:23 PM »
If it would cost 3k to turn in, then it is really only 9k to buy it.

obstinate

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #3 on: December 16, 2018, 09:34:50 PM »
have you run the scenario where you buy a nicely used car of the same make and model? Like, buy it now and donít exceed the lease limits?

Tuskalusa

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #4 on: December 16, 2018, 09:40:56 PM »
Iím a little confused about how you need a car for work, but that youíre goung to be unemployed soon?  Will you continue to need a car for work use?

Dicey

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #5 on: December 17, 2018, 03:29:20 AM »
You can't sell something you don't own. At the end of your lease you either turn the car in, or buy it.

Yes, technically you can. That's how I bought my current Toyota.

have you run the scenario where you buy a nicely used car of the same make and model? Like, buy it now and donít exceed the lease limits?p

Uh, he seems to mention this toward the end of his post. "(a 2015 civic with 45k mileage is going for 16k in the area) "

Iím a little confused about how you need a car for work, but that youíre goung to be unemployed soon?  Will you continue to need a car for work use?
@cazio, this is an important question.

And mine is: why not put half of your EF down on the car at the end of the lease? Then you can use the rest to tide you over until your employment reactivates. <------Just writing that makes me uneasy, so more info, please.

jc4

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #6 on: December 17, 2018, 08:32:15 AM »

 I'll be able to drive it into the ground.


Plan on dealing with repairs over that horizon.


I also work 12hr days 5 days a week, so I'd have little time to meet with buyers.

Here's your answer. You don't have time to deal with repairs. But the Civic. They're reliable, and this one's reasonably new.


I'm also worried about buying an older car--everyone else I've worked with over the past 2 years at my level has had their older cars break down and ALL have needed to buy new cars thanks to mechanical issues associated with wear and tear.

One: Get over this. Two: Take this with a grain of salt. Cars break down (new ones and old ones) and people irrationally replace them when they get hit with a moderate repair bill.

Annecdote: You mention mechanical issues. My dad drove a chevy suburban to 300k miles. He had a new transmission put in at 180K and a new engine at 220K. He could've scrapped the car, but even major mechanical issues are still fixable. They just scare people. 

Any advice? Happy to clarify more, I know this is a word dump.

Overall, I'd say buy the car. I'd be considering whether you need a 60 hr/week + travel job. But if you do you need the car. If you like the Civic, 12K is a fine price for the quality, reliability, and longevity of vehicle you're getting.

Don't let cars or people scare you. Unless you want a car free life, you're going to have car problems. That's part of the package. Best thing you can do is live modestly, so that when they break, you have money in the bank to fix it. Then it's not a major emergency.

« Last Edit: December 17, 2018, 08:35:23 AM by jc4 »

Dave1442397

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #7 on: December 17, 2018, 10:54:28 AM »
I'd say buy the Civic when the lease is up.

If you want to get into something else, keep an eye out for an older car that's in good shape. If you want cargo room and a rear hatch, look for a Toyota Matrix/Pontiac Vibe (the Vibe is a rebadged Toyota). When you find a good one, buy it, and then sell the Civic. It's not hard to sell a Civic for a decent price in urban areas - lots of people like them as first cars.

I like to watch Scotty Kilmer on YouTube - https://www.youtube.com/user/scottykilmer

He was recently asked how much he spends on his personal cars, and he said that in 51 years of driving, he has spend $7500 on cars. His current daily driver is a Toyota Celica that he bought from a customer for $350.

cazio

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Re: Spend 12k I Don't Have? (Car Lease Mess)
« Reply #8 on: December 17, 2018, 08:04:35 PM »
Thanks for all of the help and advice, everyone!

It sounds like it will be best to buy for my scenario.

 

One: Get over this. Two: Take this with a grain of salt. Cars break down (new ones and old ones) and people irrationally replace them when they get hit with a moderate repair bill.

Annecdote: You mention mechanical issues. My dad drove a chevy suburban to 300k miles. He had a new transmission put in at 180K and a new engine at 220K. He could've scrapped the car, but even major mechanical issues are still fixable. They just scare people. 

Don't let cars or people scare you. Unless you want a car free life, you're going to have car problems. That's part of the package. Best thing you can do is live modestly, so that when they break, you have money in the bank to fix it. Then it's not a major emergency.

Thank you for this advice. I suppose I only hear about bad things because no one mentions anything about their used car when it's working fine. :) I just get nervous because car stuff is still new to me and I don't have experience buying/selling vehicles.

Iím a little confused about how you need a car for work, but that youíre goung to be unemployed soon?  Will you continue to need a car for work use?

I work freelance in film, so I apply for the same job on different movies. My movie is ending, and I have to wait for another one to hire me when it starts up (anywhere from 2 weeks to 4 months for that to happen). I'm hoping I bump up to the next title for me, which will require only a normal commute to and from work, but I'm assuming the worst for now. As a production assistant (my current title) you're expected to have a car to use on runs, so if I don't bump up my next job will require use of my car.  Some weeks it's only fifty miles, but I've done over 400 miles in one week for work before. I get paid per mile (reimbursed) which is a nice padding to my paycheck, but takign into account wear and tear it's pretty much breaking even.

And mine is: why not put half of your EF down on the car at the end of the lease? Then you can use the rest to tide you over until your employment reactivates. <------Just writing that makes me uneasy, so more info, please.

Assuming I get my next gig quickly, this would be something I want to do. But My EF is only enough to cover me for 4-5 months of complete unemployment, so I'd be nervous to do that. However my lease isn't up until May, and if I don't have a job by then I've done something wrong LOL. Either way I really don't want to touch my EF (I actually want it to be bigger than it is) because the film industry is dumb and even big movies can be cancelled at any time (like Guardians of the Galaxy 3, for instance).  I have good connections so I feel pretty confident about my future but I love being able to pick and choose jobs instead of taking the first offer I get just because I need the paycheck (which is something a lot of my friends do and are not advancing).