Bite the bullet now, and try to get out of the lease or ride it out?

Ride it out and then look into buying it.  Yea, its more truck than you need, but its far better than what you are looking at replacing it with.  The trucks value will drop slowly.  The Mazda's value will drop like a rock.  Two years from now you will either have paid what you are paying now, with no drama. Your option leaves you with paying just about the same amount, and still have 2 or three more years worth of payments, excise tax, repair bills, etc, on a car with little resale value in the end.  Yea, you made a bad decision.  Don't make it worse by making another one.  Now, if someone comes along and wants to buy you out of your lease, and you can start fresh, thats another story.  Walk away, buy something cheap and used so your finances can recover.  You have seen the parade of cheap quality used cars my wife and kids have been driving.  No crazy excise taxes or insurance bills, and repairs have been cheap.  Granted the Saab ignition key thing was a pain, but in the end it was an $80 part.

tr8todd said:

Ride it out and then look into buying it.  Yea, its more truck than you need, but its far better than what you are looking at replacing it with.  The trucks value will drop slowly.  The Mazda's value will drop like a rock.  Two years from now you will either have paid what you are paying now, with no drama. Your option leaves you with paying just about the same amount, and still have 2 or three more years worth of payments, excise tax, repair bills, etc, on a car with little resale value in the end.  Yea, you made a bad decision.  Don't make it worse by making another one.  Now, if someone comes along and wants to buy you out of your lease, and you can start fresh, thats another story.  Walk away, buy something cheap and used so your finances can recover.  You have seen the parade of cheap quality used cars my wife and kids have been driving.  No crazy excise taxes or insurance bills, and repairs have been cheap.  Granted the Saab ignition key thing was a pain, but in the end it was an $80 part.

Exactly this!  So glad someone else was thinking the same thing.

The other cars you are considering are inferior in every way to a 4Runner.  Keep it, keep it nice, enjoy it.  Drive it till the wheels fall off which will be in like 50 years.  If you are able to swing the lease payments now, and the buyout payment at the end of the lease, in 5 or so years you will be driving a paid off car that has at least another 10 years of good utility left in it and way higher residual value that a cute yute.  

What is the payoff amount to buy the 4Runner at the end?

OHSCrifle said:

What is the payoff amount to buy the 4Runner at the end?

 

$27k 

Mazdax605 said:

Dave M said:

The "negative equity" is probably inclusive of capitalized interest pulled forward when you terminate. It's not a good move to pay that interest now if you can avoid it, so just keep the car.

I'll have to look into it deeper. The dealer we traded our leased Subaru into years ago didn't seem to care about the fact that it was a lease. We only had about 9 months left on that one if I remember correctly though. The local Mazda dealer we just spoke with offered up $33k on the 4Runner. Like I said we can keep it, and we do love the car, it just is a lot more than we need, and it isn't going to be ours at the end, and likely we won't want to finance the residual amount when the lease is over. It's also pretty miserable on fuel.

Each Manufacturer is different, Honda and Mazda treat leases like financing, where you can trade in at any time and it's the same process as a financed vehicle. YOu will need to call the bank your vehicle is leased with to determine how to handle the lease. 

Ford was VERY hard to deal with when i had i customer try and trade in at the end of their lease a couple years ago. we couldn't even buy the car because of how close they were to the end of the lease. 

So in short, call and talk to your bank and review your contract. 

spacecadet said:

Mazdax605 said:

Dave M said:

The "negative equity" is probably inclusive of capitalized interest pulled forward when you terminate. It's not a good move to pay that interest now if you can avoid it, so just keep the car.

I'll have to look into it deeper. The dealer we traded our leased Subaru into years ago didn't seem to care about the fact that it was a lease. We only had about 9 months left on that one if I remember correctly though. The local Mazda dealer we just spoke with offered up $33k on the 4Runner. Like I said we can keep it, and we do love the car, it just is a lot more than we need, and it isn't going to be ours at the end, and likely we won't want to finance the residual amount when the lease is over. It's also pretty miserable on fuel.

Each Manufacturer is different, Honda and Mazda treat leases like financing, where you can trade in at any time and it's the same process as a financed vehicle. YOu will need to call the bank your vehicle is leased with to determine how to handle the lease. 

Ford was VERY hard to deal with when i had i customer try and trade in at the end of their lease a couple years ago. we couldn't even buy the car because of how close they were to the end of the lease. 

So in short, call and talk to your bank and review your contract. 

I mean, it *is* financing, just with a fixed buy-back from the lessor at the end. That doesn't change your point from being correct - he should talk to his bank if he wants to try and pay it off!

Dave M said:

I mean, it *is* financing, just with a fixed buy-back from the lessor at the end. 

THAT'S MY LINE! at least when I worked at Mazda. I still use it to this day. My 2016 Mazda 6 Sport is a lease that i got while i still worked there and they were throwing money at salesman who has been at the company more than 2 years. my mother has fallen in love with it and we're looking to lease her one when the lease is up because she's been so happy with it. 

It's not financing.  At the end you own nothing.  It's long term rental, just like an apartment.

parker said:

It's not “purchasing”.  At the end you own nothing.  It's long term rental, just like an apartment.

 

FTFY

It is financing as there is an interest rate usually called the money factor or lease factor. You can plug the numbers into a financial calculator and back it out without too much trouble. The factor is usually expressed as a fraction like 0.0025. To convert to an interest rate, the factor is multiplied by 2400, in this case the 0.0025 factor is 6%. 

So to revisit this 8 months later. We still have the 4Runner, but my wife is growing more and more unhappy with it. Not that she doesn't like it(because she does), but mostly due to here ailments making it a hard vehicle to climb into, and it lacking the heated seats that she wants to help her with the soreness she lives with 24/7-365. She would really like to get a CUV, and we've narrowed our choices down to either a Mazda CX-5, Toyota Rav-4, or Mitsubishi Outlander PHEV. The PHEV is probably out as we can't really afford one, and they're so new in the USA that finding a used one seems to be impossible.

We've spoken to many dealers, and test driven probably 20 cars over the past few months. Kia's, Hyundai's, Toyota's, Mazda's, Mitsubishi's, Jeep's. Most dealers will give us anywhere from $29-30k for the 4Runner, and the lease payoff hovers around $33k. Not optimal for a trade, but doable to a point if it makes my wife happy. Now for said new to us vehicle I am looking in the $19-23k range on a used/certified car. There are plenty of choices in this range for cars that meet our criteria of being less than 50k miles, and have the equipment she/we want(heated seats are a must this time).

Now the dilemma is do we just bite the bullet, and eat the negative equity of roughly $3k on the Toyota with what we have saved as a down payment and finance the whole car. Or hold on to the 4Runner until the end(I love it!), and then turn it in, or buy it after the lease is up? The second option (riding the lease out) will probably cost $10k plus over the next 17 or so months whereas trading it in costs the $3k or so. The second option does allow us to put that $3k that we would have used on the negative equity as a good down payment on the used CUV that will lower our monthly payments. Holding the 4Runner isn't optimal as it would leave us with two car payments with the 4Runner being pretty high, but only for 18 months. I don't want two car payments, or I'd rather not two car payments that high. We went 5 or 6 years without a payment prior to the 4Runner lease.

At the end of the day I think we're getting a CUV as she has been all over me about getting her something that doesn't hurt to get into, gets reasonable fuel mileage, and that she can park with ease. I'd sure love to have the 4Runner compared to the 13 year old Sienna I'm driving now, but I don't love the payments. What would you guys do? FYI I've posted the 4Runner lease on Swap-a-lease, and have had a bunch of inquires, but the bank we're leasing through has made it difficult. Please don't beat me up too bad. I know that turning in a lease early is dumb, and maybe leasing it in the first place was idiotic, but I can't change that now. Also we are probably 2-3k miles under what we should have on the 4Runner as far as the lease allotment of 1k miles a month. I guess I learned to not go shopping for a new car when your other one has non-working A/C, and it is hot as balls out. That bad decision led to us leaving the dealership with a newly leased 4Runner that while awesome wasn't the right vehicle for what my wife wanted, but was exactly what I wanted. We're taking our time now, but I'm still not sure what is the right path to take.

Mazdax605 said:

The second option (riding the lease out) will probably cost $10k plus over the next 17 or so months whereas trading it in costs the $3k or so. The second option does allow us to put that $3k that we would have used on the negative equity as a good down payment on the used CUV that will lower our monthly payments. Holding the 4Runner isn't optimal as it would leave us with two car payments with the 4Runner being pretty high, but only for 18 months. I don't want two car payments, or I'd rather not two car payments that high. We went 5 or 6 years without a payment prior to the 4Runner lease.

Does it really cost you $10k when you consider that you'll still be making payments on whatever you trade it in on? 

Or are you saying it will be $10k more in payments over 17 months on whatever you trade it in for?

Mazdax605 said:

 hard vehicle to climb into, and it lacking the heated seats

 

 

 

Now the dilemma is do we just bite the bullet, and eat the negative equity of roughly $3k on the Toyota with what we have saved as a down payment and finance the whole car. Or hold on to the 4Runner until the end(I love it!), and then turn it in, or buy it after the lease is up? The second option (riding the lease out) will probably cost $10k plus over the next 17 or so months whereas trading it in costs the $3k or so. The second option does allow us to put that $3k that we would have used on the negative equity as a good down payment on the used CUV that will lower our monthly payments. Holding the 4Runner isn't optimal as it would leave us with two car payments with the 4Runner being pretty high, but only for 18 months. I don't want two car payments, or I'd rather not two car payments that high. We went 5 or 6 years without a payment prior to the 4Runner lease.

As far as step in height and no heated seats are concerned, running boards and seat heaters can be added for not much money.  Probably $1k total out the door, less if you can find some used running boards.  Can get some pretty nice big deep running boards too.  They look a little silly (not TRD Bro Friendly) but make it easy to get in and out.

As far as the payments, I don't follow.  The T4R or any other car will still have a payment for the next 17 months, its just robbing Peter to pay Paul.  10k over 17 months works out to be $588 a month!  Thats a lot of cheddar.  

Best suggestion I have is to lay everything out in excel and see what truly makes financial sense while also being realisitic.  Don't forget the cost of tax/title/license/administrative fee in your equations.  Here in Wisco they ding you pretty good on the purchase of a new car.  Most dealers roll that into their financing numbers so its tough to see unless you get an itemized bill of sale and go through it line by line to see what the total out-the-door cost is.  

If keeping the 4runner means it will become an extra car, it will cost more than the $10k. You need to count insurance, tags, etc. 

What would that car bring in if you try to sell it privately? Depending on the number, I would try that and buy it off of the lease company. 

In reply to Mazdax605 :

I tried to read your whole post but it made my head hurt. What I do is take the emotion out of it and make a balance sheet for each scenario. (Maybe each car possibility and or trading in versus buying out the lease at the end). 

Look at the bottom line and make a choice. Trying to look at it in a written paragraph just does not work well for making comparative choices.  This will also let you manipulate parts of scenarios making adjustments that may make some options that you would really like more affordable.