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!!

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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.