End Of Lease Dilemma

[LeftieBiker]

As I've written here often, I lease a 2021 leaf SV40, and my housemate leases a 2020 Leaf SV+. When she leased it, I was able to get her a very high trade-in value for her ailing Prius PHEV, so the car has, essentially, a very large down payment attached. That was ok with us, as the plan was to buy the car when the three year lease ended, turning my car in the following year, and then sharing the one car. Well, "stuff" happens, and after a year of several enormous veterinary bills, followed by a large home repair bill, buying the 2020 when the lease ends in October is looking Problematic. The residual is just under $22k, and even before last year that would have been a big chunk of our savings. Now it's MOST of our savings. Anyway, we're looking at options. The one that makes the most financial sense, sadly, is to turn in the 2020 and instead buy my Leaf when its four year lease ends, for the residual of about $14k. The car would meet our needs even after losing a bar or two, but the problem is that we just don't like the 2021 all that much. The brakes are weak, the accelerator response is anemic in Eco, and after driving the Plus, the reduced range and power are noticeable. We are also thinking of things like a home equity loan, because we have no mortgage and no heirs. (No reverse mortgage, though - no way.) Our goal is to keep the ePlus, turn in the SV40 and have a monthly payment that doesn't strain our budget. We are paying about $550 a month now, combined, and would like to stay in that ballpark for any payment on the 2020. Do the financial Wizards among you folks have any Grand Ideas that will help us? Thanks in advance for your time on this.

 

[Toby]

That's a tough problem. Have you made any decisions yet? Would it be smart to shop around? Would a Kia dealer make a better offer? Would Nissan make a better offer if it knew you were shopping around? How about the banks? Have you shopped for better bank deals?

Remember, sales people, bankers insurance agents, etc. are not your friend. You might play golf with them on Sunday but when it comes to business they can be ruthless; you need to be just as ruthless. Sit down with your housemate and work out your final price and stick to it when negotiating.

My apology if you have already done this stuff.

Just out of curiosity, is leasing a good option? I've heard some horror stories. The sales person at the front end paints a rosy picture but when the end comes due there are unexpected costs.

 

[LeftieBiker]

No decisions yet. She's a procrastinator, and it's her car, so it will be Panic Time in September, I guess. We do have a possible way out: I own a lot that we bought with the intent of putting a house on it, many years ago. With land prices high it might be worth just about what we owe on the ePlus. It's just that neither of us wants to deal with buyers/scammers, and a real estate agency would likely both overprice it so it doesn't sell, or at least take so much of the sale that we'd still be scrambling. I intend to try, though, as that is the least financially painful option.

Leasing used to be a good way to "test drive" an EV for 2 or 3 years, then if you wanted to buy it, you'd either pay about the same as an average sale up front, or a little more for the test drive. Now, with Nissan having ended the option to buy at lease's end, it's a poor idea for most people.

 

[Toby]

We once sold a house with a $14 two line ad on the Internet. We had lots of time and I put the ad up as a lark. The house sold in a week. Local real estate salespeople were furious.

 

[LeftieBiker]

What concerns me is the ever-increasing proportion of scammers and just plain Crooked people involved in markets like this. My health is poor, and it takes all my energy just to get through the day. I definitely need to get going on this, though. As soon as I have the $#@!# mini split that's in pieces in my room repaired and working again, and the porch floor I just partially rebuilt primed and painted, that's the next job. In fact, tonight I stop researching blower motor replacement, and start researching local real estate offices...

 

[GerryAZ]

You should be able to get a used car loan or home equity line of credit (or loan) and keep your monthly payments near what you have now. With a home equity line of credit you could make minimum payments that just cover the interest for months when budget is tight and pay principal down faster after you turn your car in. A home equity line of credit would also give some flexibility to handle emergency home repairs or other unplanned expenses. The home equity lines of credit I have used over the years were set up to allow credit draws for 10 years, but I don't know what other banks offer. With 10 years, you could take as long as you need to pay it off.

You really should keep the 2020 LEAF because the Plus has more power, more range, and you like it better than your 2021. FWIW, a salesman kept calling and wanted me to come test drive a 2021 when they got several new ones in back then (probably late spring or early summer of 2021). I drove a 2021 SL Plus because I was curious even though I really was not interested in trading. It was noticeably slower than my 2019 and had fewer features. Needless to say, the salesman was disappointed when I said it seemed slow compared to my 2019 and I was not interested in trading.

 

[LeftieBiker]

I too favor the home equity credit line, but I'm concerned they might require an inspection that would reveal some deficiencies in our house - like several fuse boxes remaining despite the main breaker panel. My housemate opposes the idea, for gods only know what reason. She seems to be warming to the idea of selling the lot. I've suggested we have it appraised, then if possible list it for significantly less than the appraisal to get it sold fast. If we can clear $10k and the buyer pays all closing costs, we can probably buy the ePlus. $15k would guarantee it.

 

[GerryAZ]

FWIW, my home equity credit line required a basic appraisal, but no detailed inspection. The bank will want to see proof of insurance. Some insurance companies will not issue new policies for houses with fuse boxes, but you should be OK as long as you have existing insurance with adequate policy limits.

Good luck with sale of the lot. That way you would not have payments.

 

[LeftieBiker]

Yep. We've gone, over the decades, from a big mortgage payment and modest bills, to no mortgage but big occasional bills...

 

[LeftieBiker]

I haven't wanted to post about it for fear of jinxing it, but today we closed on the sale of the lot. We used a local realtor who charges a flat $3k for lots like ours, and a lawyer who charges a flat $750 (what a racket!). The lot sold for $21,500, with me getting the price up $750 in last minute negotiations. We cleared about $17,900. It could have been a smoother closing and a better day, what with the buyer sending a pile of cash, and me losing my driver's license immediately afterward, preventing me from depositing the money. My housemate was able to do it, but only after having to provide the bank with - wait for it - my driver's license number. We had just nearly cleaned out both our bank accounts to buy the 2020, but now it's only costing us about $5k more than the proceeds. She does that tomorrow. She's buying it, I'm paying for the Gold Preferred Plus 84 month (48 month in effect) extended warranty. This warranty very nearly continues the 3 year factory bumper to bumper warranty. Now I have to get her to help me clean the car and apply, a bit late, paint sealer. Hopefully a happy ending.

 

[WetEV]

I haven't wanted to post about it for fear of jinxing it, but today we closed on the sale of the lot.

That's good news. Glad it worked out for you.