You are here:

Tips on Buying Cars/Buy vs lease and negative equity on trade=in

Advertisement


Question
Steve,

Thank you for taking time to answer my question.  I own a 2010 Cadillac Escalade ESV Premium.  It has 46,000 miles and a balance of just under $38k.  I've met with quite a few dealers and the best I have been able to get on a trade-in is $34k so I'm upside down to the tune of about $4k.  I am looking at getting an Audi A6 preimum Quattro.  In speaking with one of the dealers they suggested leasing rather than buying as my payment would be lower and I typically drive around 9k miles per year so I should fall inside the annual mileage cap.  My question is short of eating the negative equity at deal what are your thoughts on leasing vs buying?  I've never leased, always opting for the conservative traditional approach of work the best deal I can then pay on it for 4-5 years then enjoy a couple of years with no payment.  I like that I'm looking at something new every 3 years or so (or have the option to buy) but I've also heard that leases are utlimately more expensive in the long run and obviously you have nothing to show for it at the end of the lease term.  Very much appreciate your thoughts on both the trade-in and lease v buy questions.

Harrison

Answer
I know you show nothing at end of the lease, but you are negative about $4,000 for a car you own almost 5 years. Leasing is fine if you are ok with a payment always. I lease 1 of my 2 cars, and turn in every 3 years. Just beware the "real" price they give you on the trade to bury your negative equity, good luck

Tips on Buying Cars

All Answers


Answers by Expert:


Ask Experts

Volunteer


Steve

Expertise

Have sold pre-owned autos for many years, can assist in picking vehicle, financing tips and approximating payments and costs.

Experience

have been a sales manager as well as sold pre-owned vehicles.

Education/Credentials
Bachelor of Science degree

©2016 About.com. All rights reserved.