Cannot Afford a Car Lease?

Question

I have a lease on a truck. My payments are $350/ a month. My lease will end in February. I can no longer afford this truck.
The residual value when I turn it in is around $17,800. These are the Blue Book values as of now:
Private Party - $22,600 Trade-in $19,965. I called the dealership and that said they would try and work something out but what can I expect? I need something NOW with a low monthly payment. I saw on their website where they have an inexpensive Corolla for lease but that is with the best credit and around $1,500 due at signing which I don't have. Any ideas?

Answer 1

Although Jay P's advice is correct, I suspect you do not have any equity at this time. Your pay off is going to be around $23,000. That's your residual plus your remaining payments. If you don't have $1500 for a new lease (or purchase) your only alternative is to sell the truck for more than you owe. If you go to the, or any dealer, he can get you out but it is going to be expensive. The amount that you are upside down, at least $4,000 by my reckoning, will have to be rolled into the new loan. That means you will be paying for your new car as well as at $4,000 of your truck that you don't have anymore. There is one more option. That would be to go to a bank with whom you do business and borrow the amount necessary to buy the truck out of the lease. I suspect that since you will need about 23 grand, your payments will be higher, not lower. My suggestion is to keep the truck. Find a way to make the payments even if you have deliver pizzas at night for eight months. Because at the end of the lease you will not be upside down and you can then purchase something that you can afford.

Answer 2

Here is what you do. call the bank which holds your lease and get a quote for the current lease "payoff." This is essentially the amount they will need to terminate the lease and buy the car. At the end of the lease, the payoff is the residual value of the car. If you can sell the car for more than this, which I suspect you can based on your numbers, you can make a few dollars and have enough to get into that Corolla which will save you money. The dealership can do this for you, but they will take a fee and try to make money on the trade-in. I would try to sell it privately provided that the math works out.

Answer 3

Here's a thought, don't lease. Its pointless, you throw all this money at a dealer and have nothing to show for it cept all kinds of fees at the end. Find a cheap used car and BUY it.
-Duo