- April 3, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Seeking Advice for End of Lease Situation
Hello,
I am currently seeking advice regarding my end of lease situation. I have approximately $10,000 in savings and I am considering obtaining a line of credit from the bank to cover the remaining expenses.
In addition, I also have $100,000 in stock investments and about $5,000 in cryptocurrency. I am unsure whether it would be more beneficial to sell some of my investments to cover the remaining expenses or to proceed with obtaining a loan from the bank.
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Depends on the car and its condition, what the interest on the LOC/loan would be, and whether you think your investments will earn a higher rate of return (net of fees and taxes) over the applicable time period.
Not 100% sure if this will be of any use, but worth looking into.
When my lease was up (from Toyota Credit Canada, not sure if other manufacturers’ lease providers do the same), I was still waiting for my new car to arrive. I called TCC and asked them what my options were. They said they can extend the lease month by month, or for 4 months, and even if my new car is here in 2 or 3, my lease will end once the new car arrives.
Why I’m telling you this though is because all of the payments I was making went 100% towards my buyout. So if my buyout was $15,000 and I made 3 more $500 monthly payments, my buyout would be $13,500. It wasn’t $500 minus interest going towards the buyout.
I’m not sure all of the circumstances that the leasing company would do this under, but maybe worth calling them to find out so you can have a few extra months to either save up the money for that difference that you’re missing, or to just figure out exactly how you will pay for it.
After reading comments I understand this is a car lease
Was wondering why you have to pay at the end of a home lease 🤣🤣
Do you need the car? Then so, then use the 100k stock and buy it back.
2019 Tiguan for just $16k? But it out however you can and sell it. I’ll buy it from ya.
Is it WORTH 16k? Nobdy asked that…
You’ve provided zero info. What car even is this?
Just go back to a dealer and get them to refinance it, and see what kind of rate they can do, as the bank for Thier rate and go with the better deal
This is simple.
What is the interest rate on the LOC vs how much do you think your crypto/stocks will return (after taxes)?
Consider financing the remaining balance and chip away at it as fast as possible. Might be better off keeping yourself invested. Markets are hot right now.
Or, it’s possible to redeem from investments, pay off the lease with cash, then get a leverage to replace the redeemed cash and set it up to cost the same as your lease payment. Then your interest is tax deductible, and probably lower because it is secured.
But this assumes you have a high risk tolerance and know what you are doing.
Sell your $5K of toy money and you’re pretty much there. Use a LOC for the rest.
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what kind of car, year, mileage?
Unless your investments are making more than the interest you’d be paying for a line of credit I wouldn’t borrow.
Sell crypto. Buy-out car. Then maintain it properly and drive it into the ground. Don’t get sucked in to new cars again, buy used going forward. Then, immediately go to the bank, borrow $5k (or more if you can afford it) and make an investment (GIC or dividend yielding stock or mutual fund). Now you can deduct the interest from your taxes as a carrying cost for investments. Get your money working for you. You are already making car payments, switch that payment amount into paying off an investment loan.
You will never be able to deduct the interest you pay on a lease or car loan from your taxes. But you can for investments. Be smart, do this for life.
Have you tried the lease swap websites?
It’s worth a try to check how much are the dealerships around paying for your car BEFORE the e d of the lease.
I traded a vehicle 6 months before the end of the lease, and even paying the penalty for “breaking the lease” and buying out before the end, I ended with some money on my hand instead of just returning the vehicle.
Depends. Do your investment returns beat the interest payments of the loan?
If you decide to buy it, go directly to VW finance vs the dealer. They will slap you with a bunch of fees for no reason
What if it was a 2020 Toyota Prius Prime with 40km mileage? I’m in a pretty similar position.
They will try to charge you some sort of admin fee that it is not in the contract. Try to call around and ask for quotes. Some dealers do not charge that bs fee. You will save $600-1000.
Don’t get a loan you already screwed yourself doing the lease now you’re doubling down? Sell the crypto and a bit of stock and be done. That’s if it’s taxed or TFSA. If it’s RSP don’t.
I know it’s kinda late and only applies to a very niche readers here. If you happen to be eligible for one of the available packages of National Bank, look into it. I, as an Engineer, was able to get a Prime + 0.25% LOC. I can assure you, it will be lower than any rate you can find for used car, even if it’s at the dealership.
Have you thought of using a credit card for the remaining amount? That will buy you about a month of time to pay back the 6k, then you can either use LOC (whats the rate) or your stock/crypto.
I personally would take from my investment.
I bought out my Honda and they offered financing for the buyout. I didn’t need it but it is available if you dint have the cash presently.
Is there still a car shortage? Last year when I returned my leased 2019 Subaru I shopped around and found a dealership that offered me $4k to return the car to them. They sold it two weeks later for even more $$. I ended up getting another lease bc the interest rates were so low and used the $4k I got from the dealership to pay down some debt.
I don’t think Loans will be investment gains but without knowing the full details my knee jerk is just pay with assets.
When my lease was up I didn’t have enough to buy it back, they let me put down what I had and extended my lease for 6 months. I was able to make those payments and put more and at the end owned the car. It was in house financing, if that makes a difference. Doesn’t hurt to ask them and let them know your intentions. Good luck.
I personally don’t like carrying debt but it depends on the situation. If you think that you can make more money back in the stock market than what your line of credit interest is, then finance. Otherwise pay cash and take some money out of your investment portfolio.
Get more loan till you get job to cover your needs
Just finance the rest at the dealer like most do.
Convert all “crypto” to bitcoin, there is no second best
Is the 100k on a high yield dividend ETF? You can get 1k/month on that. Use that to leverage a loan or an LOC. Like I can get a loan fr AMEX for 20k payable 36 months on 400$+/month. So leverage the 100k. But why don’t you get a new lease?
Signed lease in Toronto and moved to BC
Almost every car depreciates, worst investment you can make
Just buy a good used car with cash.