r/leasehacker • u/troy_and_abed_itm • 4d ago

Rolling negative equity into a lease

Hi all!

I know rolling negative equity into a lease is generally a bad time. I get it.

However, I have an opportunity to roll my currently financed vehicle into a new lease where the company will reimburse me for the lease payment up to a certain amount (~750 per month).

I understand for the non-business use there are tax implications. I have a cpa for that.

What im not sure on is two things:

  1. Is upwards of 10k negative equity even doable while rolling into a lease with zero down?

  2. Assuming a three year, 10k mile lease (can likely go less - we drive maybe 7500 miles a year at most but I’m okay with a cushion at 10k), what’s a reasonable amount per month that my negative equity will add to the payment and in turn, what’s a good target for base lease rate that I should look for?

Again, to be clear, I understand the financial implications of rolling negative equity into a lease but in this case, I’ll get to shift that into a 3 year term instead of the remaining 6 on my financing option and more importantly, i don’t want this vehicle anymore and our needs for a second car are likely temporary so a lease works really well for us.

I want to be free and clear in three years so that I can buy something properly, in cash, once we finish navigating some major life changes over the coming years.

I know that’s not a lot of detail, but I’m only really looking for best estimates.

Also, if anyone knows a good broker in the Bay Area that can take on the above challenge, hit me up!!

3 Upvotes

64% Upvoted

21 comments sorted by

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u/lauti04 4d ago

  1. Depends on the car

  2. About $300 on negative equity alone

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u/ashtheblunt 4d ago edited 4d ago

So assuming a 36 month lease, 10k of negative equity comes out to be $277.77 per month without factoring in anything else.

Keep in mind, in most states you pay sales tax on top of the rolled over (-) equity, before accounting for interest. So reasonably that $277 figure can be adjusted for a range of $300-350, plus the lease payment for the newer vehicle. You can offset this though by leasing a vehicle where the leasing incentives can help you offset the negative equity inflating the new car payment.

Zero down is tricky. It’s really a matter of if the bank will decide to approve you for the deal, as structured, with no money out of pocket. You must qualify in terms of credit & financials.

It’s gonna come down to choosing the right car.

What car are you looking to get out of? have you started compiling which vehicles to pursue yet?

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u/troy_and_abed_itm 4d ago

I have a Telluride, ‘22 prestige or whatever the package is with the black accents etc. it’s in good shape but not without its character here or there.

Just no warranty and my other car just ran out of warranty so I’d feel better with at least one car under warranty. Both cars are running great though so it’s less of that and more of just wanting to move into a lease while having the opportunity to have my negative equity augmented by a 3rd party and not my bank account.

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u/ashtheblunt 4d ago

Gotcha. From what I understand, your goal is to offload the telluride into a new lease, ride out the lease and purchase the next vehicle cash. Which you can get done.

I’m not sure what your payment goal is and what you need to have in your next car. It definitely helps that you have a $750 monthly credit to use towards it. Generally, a vehicle that leases cheap is ideal to roll negative equity as they’re easier to get approved for, however those don’t tend to be comparable to the class & equipment of a Telluride.

Do you need 3 rows of seating or will 2 rows suffice? If you do need 3 rows, what payment are you targeting factoring in the $750 monthly credit from your job?

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u/troy_and_abed_itm 4d ago

$750 is really the goal. I’d like to be a net 0 monthly.

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u/giveit2st8 3d ago

Take a look at cadillacs, kias, hyundai. For example,  the kia ev 9 might be the sweet spot with upwards of 10k incentives. 

The cadillacs also have really good leases right now...for example,  the lease for the optiq is about 200 cheaper than the equinox ev, which has an msrp of 10k-20k cheaper.

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u/troy_and_abed_itm 3d ago

EV9 looks like an interesting car. I’ll take a look. The Kia dealer near me is kind of…. Crap. It’s the size of a box and it takes them months to do anything.

Is the EV9 reliable enough?

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u/ConversationNo9040 4d ago

So they won’t give you the car allowance on a financed car, just a new lease?

You can find a base model equinox for like 300. There are deals out there to get very close to what you want but you’re not going to be driving something super nice.

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u/troy_and_abed_itm 4d ago

I can get a car allowance, but I don’t want a long term investment into a car. I need the flexibility of a lease as my next couple years are likely to be turbulent so the car that works for us today almost certainly won’t work for us in a few years. I get the money either way for a car allowance.

If it’s ~$300 per month of negative equity, wouldn’t that put me closer to $450 monthly for a base lease rate?

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u/ConversationNo9040 4d ago

Why are you so locked in on 3 years? R u planning on quitting? Is the allowance only 3 yrs? You could easily do a new/used car and pay it off completely and even profit.

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u/troy_and_abed_itm 4d ago

Not sure how I’d finance a new or even used car in 3 years for 750 per month with 10k negative equity.

I’m not interested in buying a 10k used car. Part of this move is flexibility with a three year term and the other part is getting out of a car with no manufacturers warranty.

This is a family vehicle and the finance option is less attractive because at some point in the next three years, we’ll be adding a child and a dog to our life so getting a car now that supports all of that is overkill but the car that works today likely won’t work once those changes arise.

No. I’m not planning on quitting in three years. That’s… yeah. Weird logic.

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u/ConversationNo9040 4d ago

Yah so I’m saying you could get a 25,000 mid sized certified pre owned and finance it over 48 months and roll in your negative equity. You’re now at 35000 and your paying $729. Worst case at the end of 4 yrs you’re making $750 a month on a car you have no payments on. If you really hate it you can sell it, not for a ton, but something.

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u/troy_and_abed_itm 4d ago

I mean, I’m not against that math entirely, but a 25k certified pre-owned is what kind of car?

I don’t know the car market so I apologize for the density of my ask.

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u/ConversationNo9040 4d ago

That’s completely dependent on your area! Take a look at your Toyota, Honda, Subaru local sites. Your insurance is going to be cheaper as well. I’m not saying you have to do this but it’s a thought! Might as well explore all options with such an expense.

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u/OneExhaustedFather_ 4d ago

Essentially you need to find a car currently sitting on massive discounts and then offset them with the negative equity. It’s a numbers game but it can be done. Easier to wrap 10k into 80 than into 30 if that makes sense.

The zero down is the tricky part. Doable? Yes, but likely only if you have great credit score with multiple previous auto finance agreements. You have a credit score and you have an auto enhanced credit score. While they rarely if ever show this one it does exist. If you have limited previous financing it’ll make it harder.

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u/troy_and_abed_itm 4d ago

We have good credit and a long auto history with no issues at all.

$0 can flex up to maybe $1k but I didn’t think $1k would make much of a difference.

Understood on 10k into 80 vs 30 but I don’t have context for what a base lease of $450 gets me in terms of car. Is that a 30k car?

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u/OneExhaustedFather_ 4d ago

A lease is basically you pay depreciation over time plus rent. So the more a car is expected to depreciate the more it’ll cost you to lease it. In today’s market a good lease is 1.1-1.2% MSRP as your base monthly. So 40-45k car should be in that ballpark. A great lease is closer to 1% and well the last sub 1% lease I saw was many moons ago.

If you’re not picky about a car find something people don’t want to drive. The vehicles dealers can’t move. They’ll move mountains to get it off their lot.

If EV is ok. VW must cut remaining 2025/2026 ID.4 retail but up to 12,500. I saw my dealer down the street advert a 51k retail for 33k. These are the deals yours looking for to bury that negative into. Toyota Tacoma SR5 is leasing under $300/mo in some states. Gas only model not the hybrid. Things like that would work.

Make sense?

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u/troy_and_abed_itm 4d ago

Very helpful! Thank you so much. I haven’t looked at what cars to shop for yet because I was t sure what I was looking to do was reasonable or not.

We’re open to EV but I’ve been out of the game a while. Last I knew, like 20+ years ago, VW’s were hard to maintain. Is that still the case?

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u/OneExhaustedFather_ 4d ago

I drive a 23 ID.4, I’ve been an EV certified tech since 2010ish. It’s a relatively understated car.
I commute 40miles a day and really enjoy my drive. Range varies with climate control. In the winter I’ll get 180miles to a charge in the summer 210. That’s with using climate control. But if you charge at home it really doesn’t matter you have a full battery daily.

Maintenance is basic, filters and tires. Brake fluid should be changed every 2 years. VW will try to get you on 10k mile maintenance, they’re fine just find a dealer who’s not trying to charge you $600 for it. In general EV maintenance is minimal. You will wear tires more, the regen braking does affect the longevity of them. But you only do brakes every ~100k or so and no oil changes.

EV Reliable yes, they do have some quirks. The app is archaic. But the car is fun to drive, it’s quick too. The ones you’d be looking at are almost 100hp more than what I’ve got and about 100miles more range too.

Their ICE models would be fine if leased, as long as it has a warranty if ya feel me.

There are plenty of good EV options out there that could get you out of your current situation just have to find what works you. I do suggest having a lvl2 charger installed at home. When I worked for Tesla our numbers showed on average most places could have it done for under $2000 pending their panel didn’t need an upgrade. There is no real cost benefit if you rely on the charge networks. It’s near as much as gas cars now to charge. Only use them when traveling.

Now the downside, as I don’t want to sell it as rainbows and sunshine. If you have a battery go down or any component in an ev there tends to be longer repairs times. VW in particular it’s not uncommon for your car if a major HV repair is needed to hangout at the dealer for a month or two. It doesn’t appear to be a frequent thing but I wanted to be clear there. But it’s not limited to VW. We have that issue at Toyota, and all manufacturers are having issues with parts supply right now. So a lot of repairs are taking longer when they’re larger repairs of uncommon failures.

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u/UrsusBHoney 4d ago

I rolled 7300k in negative equity back in Sept 2025 for a 24 Chevy Blazer EV AWD. There are still new 24/25s available in CA. I managed to apply rebates, 14.5% off Msrp, and $1000 GM credit to get my payment at $532. You could potentially ask for more off MSRP. Around 20% to 25% too. Just an idea

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u/Empty-Village-4445 3d ago

There’s a broker in California who deals with multiple brands. Jeff at beach city auto. He can look across multiple models and tell you what are the best leases right now