How can you trade a car for a lease?

Question

My car is worth about $16K and I have about 14K left to pay off. I want to lease a a car and trade in my car. Would i and How would I save on taxes? How would I get money back from the dealer? I really want to know how this works!! Help!

If I buy a car that is valued at $20K with my trade in value of $16000 (I owe about $14K of it)....Will I save on taxes on the full value of $16K or just the $2K of which is mine?

Answer 1

Money back? Only if you can sell the car to the dealer for more than the pay-out, and lease a car with no money down. A dealer will not buy your car from you for the same price you can sell it for, because he has to service, it, and put warranty on it, and still sell it for a profit. Are you aware that a lease is only a rental agreement, albeit a long-term one? The only saving on taxes is the fact you will be paying tax only on the lease payment, but, at the end of the lease, you don't own anything, at the end of your car loan, you do.

Answer 2

Trading your car in for a lease vehicle is pretty much like trading for a car you are buying. They will take your trade, but will only give you trade in value for your car reguardless what you owe on it. Dealers only pay trade values for a car at what they can pick them up at the auction for. Sometimes you could get a little more from them on a trade, but thats only when buying a car and not leasing it, because they can move around the numbers and get you a lower payment, or knock off a down payment. The numbers will be made to look better and help on lets say a payment, but still in their benifit.
More than likely you will get alot less than the car is worth trade in. They will take the remainder of your balance that they didnt give you, and tack it on the end of your lease contract, which means you will pay a little more each month. When trading in a car its best to have most of it payed off that way you have a little equity to bargain with, like extra money for a down payment, which some leases require, or use the equity for a down payment to lower monthy cost.
Cars will always be available to lease at a cheaper monthly rate that if you were to out right purchase. The best thing you can do is sell your car privately, and score the extra profits for yourself, rather than a dealer giving you very low auction prices, and selling it for retail and keeping the profits you could have made just as easily.

Answer 3

Leases are traditionally bad deals, unless you are a very specific type of person that insists on getting a new car every 2 - 4 years.

Because at the end of the lease, you've paid the initial front end lease money, and all the payments, and when you turn it in, you'll have 0 to show for it. And god help you if you go over your alloted miles or turn it in in not very good shape.

If you have to lease, try and get the lease through a bank rather than the car dealership financing it. When you turn it in at the end, the bank really doesn't want it back, and will make you a better buy out offer.

Answer 4

well first off if you have that much to pay on the car, it's gonna COST YOU to lease. If you trade the car you have, they will give you probably $10,000 in trade. (trust me on this), you will have to pay, ins, tags, taxes, fees on the lease, plus you can only drive so many miles on a lease and if theres any damage YOU pay for it. You won't save on taxes and you won't get any money back from the dealer. (you will be trading the car for a lease...they don't give you money back for that..)

Leases aren't the best way to own a car, buying is better and buying a car with the best resale is the best ( Honda, Toyota, NIssan...consumer reports). If you want to trade in your car, trade in for another BUY, LESS of a car, better interest rate, less ins that way...(remember mileage and wear have a lot to do with a trade in's value)