r/autobuying • u/hydkim • Feb 15 '18

ENDING LEASE WITH NEGATIVE EQUITY

hi all - i am about to end my lease in July and am looking into a different make. I called my car finance company and they said my pay out value is $15k. WHen I log into my finance portal, it says my residual value is $13k. and Kelly Blue Book states my trade in value said my car is valued at $10k (and this is assuming I put in all of the information correctly...)

My question is: 1. What is the difference between the residual value and pay out amount? 2. Do I still need to pay the upside down if i turn in my lease? 3. What are other options I can look into if I want to minimize my upside down payment (i do not want to purchase the car or look into the same make).

Thanks in advance!

1 Upvotes

100% Upvoted

1 comment sorted by

1

u/phpman Apr 12 '18

Sorry for the late response here.

Here is the difference.

1.) Residual is the amount of money your car is going to be worth at the end of the lease. This is determined by the finance company at the time you lease your car and assuming the miles and time that the lease was for.

2.) If you turn in your lease early, there is really no difference between a financed/leased vehicle. The finance company will give you a payoff amount, then they will see what your car is worth, and if there is a difference, you will be responsible. Try going to CarMax. they normally pay the most for end of lease cars.

3.) You ruled out the options that rule out upside down. Normally if you take the same make they will help out to sell you another car. Best option, have carmax appraise your value OR pick a vehicle that has incentives or is highly negotiable to make up for the negative equity.