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  • Nov 4th, 2015 10:17 am
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[OP]
Member
Mar 7, 2011
324 posts
158 upvotes
Brampton

Car Loan Mistake

Long Story Short:

- Took an upside-down LOAN(8yrs to Pay) from Hyundai, got top of the line.

- Year 3, heard a friend with similar loan total their car, insurance only paid for market value of car, they still had about $10k left to pay on upside-down loan and no car to drive. (Car value depreciated way too fast, and payments not fast enough to be on par with depreciation)

- Panicked. Traded Hyundai in. Got an entry level BMW on 5 yr LEASE(to have about same monthly payment) for peace of mind and with negative equity from Hyundai. (When a leased car gets totalled, even with negative equity, it would be dealers headache to claim. We would just then start fresh with a new car loan or lease.)

- Now 3 yrs left with lease, life changed, monthly payments are becoming a burnden.

IS THERE A WAY OUT?

OR JUST FINISH IT AND MAKE BETTER DECISION WHEN IT'S DONE?
13 replies
Deal Fanatic
User avatar
Jan 17, 2002
6978 posts
551 upvotes
Toronto
leasebusters.com

Only worthwhile doing if you are actually going to make a wise decision after getting out of the lease and not just something $150 a month cheaper.
[OP]
Member
Mar 7, 2011
324 posts
158 upvotes
Brampton
That looks like a great site... But anyone looking could easily see the monthly lease for this one os considerably more than what they would get at BMW..
Deal Expert
Aug 2, 2001
15618 posts
5846 upvotes
JeffLeonor wrote:
Nov 3rd, 2015 12:01 am
That looks like a great site... But anyone looking could easily see the monthly lease for this one os considerably more than what they would get at BMW..
I was under the impression from looking at those services that people often offer a cash incentive for taking over the lease. I am not sure if this is possible in your case, however it may provide an incentive for someone else to take it over.

Remember, when dealing with cars and money you cannot always count on someone making a "smart" decision. With a cash incentive someone might very well take over the lease on your BMW.
Sr. Member
Sep 10, 2014
533 posts
88 upvotes
Dartmouth, NS
JeffLeonor wrote:
Nov 2nd, 2015 12:20 pm
Long Story Short:

- Took an upside-down LOAN(8yrs to Pay) from Hyundai, got top of the line.

- Year 3, heard a friend with similar loan total their car, insurance only paid for market value of car, they still had about $10k left to pay on upside-down loan and no car to drive. (Car value depreciated way too fast, and payments not fast enough to be on par with depreciation)

- Panicked. Traded Hyundai in. Got an entry level BMW on 5 yr LEASE(to have about same monthly payment) for peace of mind and with negative equity from Hyundai. (When a leased car gets totalled, even with negative equity, it would be dealers headache to claim. We would just then start fresh with a new car loan or lease.)

- Now 3 yrs left with lease, life changed, monthly payments are becoming a burnden.

IS THERE A WAY OUT?

OR JUST FINISH IT AND MAKE BETTER DECISION WHEN IT'S DONE?
Whoever told you that, is wrong! You are responsible for the vehicle, if insurance doesn't pay the outstanding balance, you have to cover it. That's why they sell gap insurance.
Deal Addict
Aug 3, 2005
1573 posts
759 upvotes
JeffLeonor wrote:
Nov 2nd, 2015 12:20 pm
Long Story Short:

- Took an upside-down LOAN(8yrs to Pay) from Hyundai, got top of the line.

- Year 3, heard a friend with similar loan total their car, insurance only paid for market value of car, they still had about $10k left to pay on upside-down loan and no car to drive. (Car value depreciated way too fast, and payments not fast enough to be on par with depreciation)

- Panicked. Traded Hyundai in. Got an entry level BMW on 5 yr LEASE(to have about same monthly payment) for peace of mind and with negative equity from Hyundai. (When a leased car gets totalled, even with negative equity, it would be dealers headache to claim. We would just then start fresh with a new car loan or lease.)

- Now 3 yrs left with lease, life changed, monthly payments are becoming a burnden.

IS THERE A WAY OUT?

OR JUST FINISH IT AND MAKE BETTER DECISION WHEN IT'S DONE?
Your statement about it being the "dealers headache" does not sound correct. There are several insurance agents here on RFD, maybe one of them can chime in to confirm.
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Deal Addict
User avatar
Jan 3, 2014
2514 posts
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Vancouver(ish)
JeffLeonor wrote:
Nov 2nd, 2015 12:20 pm
(When a leased car gets totalled, even with negative equity, it would be dealers headache to claim. We would just then start fresh with a new car loan or lease.)
Er...no. Just as you are responsible for additional wear and tear caused by going over the total/annual KM limit, you are responsible for the value of a car should it not be returned in a certain condition.

Writing it off? If you don't have adequate insurance on the vehicle, you are - subject to the terms of the lease - responsible for any shortfall between what the lessor receives from the insurer and the calculated value of the vehicle.

Then again, considering that you got a car with an 8 year financial commitment, it's no wonder you don't have an understanding of financial matters. :)
Proud RFD member since January 31, 2007. Feel free to add 3,034 to my post count.
Deal Addict
User avatar
Jun 26, 2011
1675 posts
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JeffLeonor wrote:
Nov 2nd, 2015 12:20 pm
(When a leased car gets totalled, even with negative equity, it would be dealers headache to claim. We would just then start fresh with a new car loan or lease.)
With a lienholder/lessor, it's probably more of a headache to settle the claim and a total loss is probably more likely. However, this does nothing towards the conditions of your finance or lease. Unless you have some sort of waiver of depreciation, the total loss amount is still only paid for the market value of the vehicle. Your scenario would be no different than your friend's. In the case of a total loss, you are paid the market value which may be less than the amount left in your lease. In that case, you can start a new car loan or lease and the dealership will slap on the remainder amount from the previous loan.

But your main concern actually seems unrelated to your concerns about the insurance. So really, you are just asking about how to get out of a lease. Leasebusters is the way to go.
[OP]
Member
Mar 7, 2011
324 posts
158 upvotes
Brampton
Thanks to all! I checked and we do have the gap insurance included for only 1.5 yrs... Apparently, it is standard in new leases per our insurance provider..

I am still waiting for a response on how much to continue this coverage until the end of the lease.

Ultimately, it seems like right from the get go, it was a bad financial decision... Coupled with worse decisions after the fact.. I am now contemplating to just finish it off and start fresh and wiser on the next one...
Deal Fanatic
User avatar
Feb 15, 2005
5310 posts
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TD Meloche Monnex offers me 5 years waiver of depreciation but TDMM has also become quite expensive.
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Deal Addict
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Jun 26, 2011
1675 posts
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JeffLeonor wrote:
Nov 3rd, 2015 12:16 pm
Thanks to all! I checked and we do have the gap insurance included for only 1.5 yrs... Apparently, it is standard in new leases per our insurance provider..

I am still waiting for a response on how much to continue this coverage until the end of the lease.

Ultimately, it seems like right from the get go, it was a bad financial decision... Coupled with worse decisions after the fact.. I am now contemplating to just finish it off and start fresh and wiser on the next one...
What do you mean by start of fresh? Do you mean to lease another car after? Essentially, to get rid of your lease on leasebusters and starting lease on another car seems like not much of an improvement on your financial situation as you're bound to lose money in that transaction. If you meant the scenario regarding the insurance, that's hardly a reason to buy another car. Half the cars on the road today are in the same boat as you.
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Jul 30, 2007
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Lease for 5 yrs , factory warranty only covers 4 yrs. you better sweeten the lease takeover offer with cash incentive along with lease tranfser fees and inspection fee, assuming you have no excess wear and tear protection
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Jan 8, 2006
1151 posts
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rf134a wrote:
Nov 3rd, 2015 12:22 pm
TD Meloche Monnex offers me 5 years waiver of depreciation but TDMM has also become quite expensive.
I was with TD Meloche Monnex for 10+ years. Did shop around this turn out two company(All State & Economical) offered me almost $800 to $1200 per year difference for same coverage. Seriously they were ripping me off.
[OP]
Member
Mar 7, 2011
324 posts
158 upvotes
Brampton
kmarcie wrote:
Nov 3rd, 2015 5:05 pm
What do you mean by start of fresh? Do you mean to lease another car after? Essentially, to get rid of your lease on leasebusters and starting lease on another car seems like not much of an improvement on your financial situation as you're bound to lose money in that transaction. If you meant the scenario regarding the insurance, that's hardly a reason to buy another car. Half the cars on the road today are in the same boat as you.
Meant to try and have a good decision on the next car... Maybe just be content with a used car that gets us from point A to B..

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