[abr5]

I was asked this morning by a colleague at work how to factor in a trade in when leasing.

His trade in is valued at $27,000 and he will lease a 3 series with MSRP of 44,345 , but is getting it for 42,900.

How would the trade in impact the leasing calculation if any?

Thanks

 

[mclaren]

Normally they just cut you a check for the value of the trade. It's best to keep the transactions separate.

 

[chrischeung]

Unless there is a tax offset for the trade in. In this case just calculate the lease without tax, then add the taxed amount to the lease. Then it depends if you pay the taxes up front (as a lump sum), or if they are pro-rated monthly.

 

[Giants84]

Not smart to front load such a large payment on a lease, if anything happens to the car that money is gone.

 

[ard]

Not smart to front load such a large payment on a lease, if anything happens to the car that money is gone.

Bingo

While a $27k downpayment will lower the monthly, your money is at risk. If the car gets wrecked, the uinsurer pays the lease compnay first- GAP will NOT cover YOU.

Better put the 27 to multiple serurity deposits, or bank it.

IMO

 

[abr5]

so, to be clear, can you use the trade in value to reduce the taxes even if you are including the taxes in the pament?

 

[[email protected]]

so, to be clear, can you use the trade in value to reduce the taxes even if you are including the taxes in the pament?

trade in value may be 27K but does he own the car out right or is there still a payoff amount?

if there is no payoff ... use the money to pay drive offs and MSD then pocket the rest or he may want to crunch up the #s for a pre pay lease ...compare the two to see which is best overall