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Old 08-24-2015, 09:09 PM
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Getting out of a lease early and positive equity

Hello all,

Seeing as my lease ends on November 1st, I've been actively researching cars and trying to test drive as many as I can. I've test driven the GC Limited and the ride was nice and the features were great but the dealership seemed fishy so I didn't bother going back. After all I simply wanted to test drive the car and their lack of a competitive offer made me leave and never look back.

Today I spoke to a different dealership (Westbury Jeep) in Long island, New York, after seeing that they had an internet special that had the GC limited for $319 a month, for 36 months, including no down payment, a $995 bank fee, taxes and DMV fees and 1st months payment due. After telling the rep about this he told me that it was only for people who were going to register their car in Long Island and seeing I'm in Brooklyn I would not be eligible (not sure if that's a legitimate excuse since I didn't see that posted on the ad). The rep also tried to persuade me to come in and have my leased 2012 Camaro 1LT/RS appraised to see if it had positive equity to help facilitate a deal.

Does anyone know how positive equity works?

Do you think I should press to have the same deal as the Long Island natives considering that stipulation wasn't written online?

How much a month should I be looking to spend on a GC limited for a standard 36 month lease?

Also, has anyone dealt with Westbury Jeep? Are they trust worthy?

I have two more months and at this point I will only get out of my lease unless it will financially benefit me. If anyone has any answers or tips related to the above I would greatly appreciate it.

Thanks,

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Old 08-24-2015, 10:09 PM
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Re: Getting out of a lease early and positive equity

Im going to try and answer as many of your questions as I can but seeing how I live in Texas, some of them may elude me.

Positive equity is the relation of what you owe on your vehicle vs what the vehicle is actually worth. For instance, you go and buy yourself a 50k vehicle. As soon as you drive off the lot the value of your car depreciates. So now that 50k car is only worth 42k if you tried to resell it. That means you have 8k of negative equity. Now say you have a vehicle that retains its resell value very well (such as jeeps). You may owe 20k on the vehicle but its worth is 26k. That means you now have 6k positive equity in your vehicle.

NEVER negotiate your traded in vehicle as part of your purchase/lease. They are two completely separate transactions and should be treated as such. Look up the worth of your vehicle utilzing Kelly Blue Book, Cars.com, Truecar, and any other websites. Also look up comparable vehicles to yours and see what used ones are selling for. I would then go to carmax. They will give you a no hassle estimate on your vehicle. Sometimes their number is high, sometimes its low, either way its a good starting point on knowing your vehicles worth. If carmax offers you a fair value on your vehicle and theres positive equity, I would take the deal. Much easier to negotiate your new vehicle without dealing with trade in value.

You should negotiate your new vehicle price, not the monthly payments. Even if its a lease, always negotiate the price of the vehicle. Keep in mind that the best dealership to purchase from might not be in your state. A $200 plane ticket is worth saving a few thousand on the purchase price of your vehicle. Look into the dealerships that do group buys, They will usually be willing to go a few percentage points below invoice cost. You can search the threads on this site to see what others paid. Gives you a general understand of where you can negotiate down to rather than what the dealer states.

As for the area specific lease you mentioned, if that is the lease youre comfortable with then demand they give it to you. If they want a sale bad enough, they will honor the deal. Dont be afraid to walk out. There are plenty of Jeep dealerships, you dont need to succumb to the first one you step your foot into.
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Old 08-25-2015, 08:32 AM
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Re: Getting out of a lease early and positive equity

Thanks for the input @protect1989. I will deff look into the value of my car before going forward with anything else.
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Old 08-25-2015, 08:39 AM
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Re: Getting out of a lease early and positive equity

I'll answer the questions that i can,

I bought my 2015 Overland from Westbury Jeep, and picked it up 5 days ago. I traveled to 4 Jeep dealerships on Long Island when looking to purchase and had the best overall experience at Westbury Jeep, my second choice would have been East Hills Jeep. if you have any specific questions about the dealership let me know, i can also put you in contact with my salesman who was excellent.

If you are 100% committed to leasing the group buys aren't going to save you any money, but definitely look into them if buying is a possibility.

As far as trade in/equity you will always get more money doing a private sale, definitely value your car first with something like Kelly Blue Book to get a ballpark number. When I was looking to buy my Jeep i had a 2014 Lexus IS that no dealership would give me more than 29k-30k for, i ended up doing a private sale for 34.5k. The main benefit of selling to the dealership besides convenience is saving on sales tax. So for example if you're buying a $40k car and have 10k in equity you would only pay sales tax on $30k, In NY that's a savings of almost $900. If you're leasing this doesn't apply because you wouldn't want to put that 10k down.
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Old 08-25-2015, 08:58 AM
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Re: Getting out of a lease early and positive equity

protect1989 and AzakasX both provided excellent and accurate advice. I also live on the Island (Lawng Eye Lind ) I have dealt with many of the dealers regarding a purchase not a lease. Beware of the bull numbers they will hit you with. Be prepared with all the information. Know more about the car, transaction etc then they do. When hit with all the numbers and the Dealer not having a legitimate honest response, I walked out. Ended up going out of state. Mucho Dinero in "MY POCKET" Thousands
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Old 08-25-2015, 09:21 AM
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Re: Getting out of a lease early and positive equity

Yep the rep I spoke to yesterday was trying to low ball me to get me into a base Laredo yesterday and was pushing for me to come into the dealership so they can appraise my car and hopefully put the car into the deal to get a good deal on the limited. He also mentioned money down which I will not be willing to do as I rather keep the money and put it towards the monthly payments. He sounded very desperate and to be honest it came off as pushy and I prob will not follow up with him because I did not get the sense that he was being honest with me. I have another 2 months till my lease is done and will use that time to research the value of the cars, what I should expect to pay, and will look into the positive equity issue.
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Old 08-25-2015, 10:10 AM
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Re: Getting out of a lease early and positive equity

Another really good thing to do is work with the online sales department. Work out all the numbers with them, get it in writing, and know the final price before you ever step foot in the dealership. When you get there, if they try and switch the numbers on you just walk out. Dont hesitate, just go.

I had a dealer here in texas send me the numbers on a 2015 Summit. Everything added up and looked good so I drove the 45 minutes to the dealership ready to do the deal. I got there and they started with "Oh well that deal only comes if you finance with chrysler at 3.9% but then you lose the $500 rebate". They chose to leave off some of the details of the transaction until I was in the dealership. Then it becomes a "Let me get my manager" game. I left that dealership and never answered their phone calls.

Meanwhile I was speaking with River Oaks Jeep down in Houston (about 3 1/2 hours south of Dallas). My salesman and I discussed pricing of the jeep ONLY. Nothing having to do with financing specials or sneaky deals, just the cost of the vehicle. I ended up walking out of there paying 39k + TTL on a 2015 overland with Adv. Tech PLUS I got the bonus cash from Jeep and 1.9% APR for 72.

Even on a lease, negotiate the price of the vehicle and not the monthly payments. This is important because while 0 down and $500 a month might be something youre comfortable paying, the residual on your Jeep could also be astronomical (meaning negative equity).

Lets assume that you negotiate the deal to the one I stated above but dont bother negotiating the price of the jeep (even though its a lease). You paid the full 50k stick price for the vehicle. You will never be able to get out of that lease early because you will always have negative equity. The vehicle will depreciate in value immediately but you will still owe the full amount for the car (similar to the example in my other post).

However, if you negotiate the price of the vehicle (even though its a lease). It is possible that in a year or two you either have minimal negative equity (1-3k) or even neutral/positive equity (0-3k). By negotiating the price of the vehicle down regardless of purchase or leasing, you are protecting yourself against the inevitable depreciation of the vehicle.
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Old 08-25-2015, 10:25 AM
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Re: Getting out of a lease early and positive equity

I'll be sure to price out the car through TrueCar, KBB, and Cars.com to see what the car is going for and what price I should get the car down to. Thanks for the input, It's going to come in handy when it's time to get into a new car.
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Old 08-25-2015, 06:01 PM
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Getting out of a lease early and positive equity

Quote:
Originally Posted by grkjeep View Post
He sounded very desperate and to be honest it came off as pushy ...

I will just say ... End of the month as well as 2016 MY sales lunch closing in fast.


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Old 08-25-2015, 06:23 PM
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Re: Getting out of a lease early and positive equity

Yep knowing that the new model year is just a few months away, and the end of the month deff has a lot to do with it. My lease is up on Nov 1st so I think I may even be able to save a lot on a Limited around then due to the 2016's hitting the showrooms relatively soon after that.
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Old 08-25-2015, 07:20 PM
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Getting out of a lease early and positive equity

2016 for GC is delayed a bit but for everything else it starts early September.

It will be harder and harder for them to sell 2015 w/o some kind of a deal. People will ask about 2016 if they will see 16 wrangler for example and scratch their head asking where are they hiding them. Why would anybody take 2015 if you can have 2016 in couple of weeks. From depreciation point of view it makes sense to take 2016 unless they offer such a deal on 15 that can cover that hit in value...



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Old 08-25-2015, 09:42 PM
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Re: Getting out of a lease early and positive equity

I have leased my last three Jeeps and all had positive equity at the end of the lease. You have to know what the residual value of you lease is or what the leasing company says you have to pay if you want to buy it at the end of your lease. If the Blue Book value is more then what the residual value is and this is set by you leasing company, then you have positive equity.
For example, I had a 2011 Overland and at the end of that lease the buy out was $24,500 this is what the leasing company wanted If I were to buy the Jeep from them . The retail value of that Jeep was around $34,000. I traded that Jeep In for my 2014 Overland, the dealer gave me $31,000 for it, they also did all the paperwork and paid the leasing company their $24,500 and the dealer keep the Jeep for resale. The remaining $6500 went towards my new lease. No money out of pocket and with the group buy In DC and rebates my nearly $50,000 Jeep was leased for $36,000. I pay $357 a month for 39 months and when I am done with this lease I expect to be in the same situation with positive equity.
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