Equity in a car lease?

Question

I want to return my leased car early to purchase a new/used vehicle. Will the remaining payments be added onto the purchase of another even though I have equity in the car? My lease is due 8/09 and residual value is $20,600. Current value is $28,685 w/ $524 monthly pymt.

Answer 1

Lease is just LONG TERM RENT.  

You do not own it.  So there is NO EQUITY.

===

Think about it, you sign a LEASE FOR AN APARTMENT.  You do NOT build equity no matter how long you live there.  Same with car LEASE.

Good Luck...

Answer 2

http://www.ebay.com/

Answer 3

Yes, the previous poster is correct. A vehicle lease is a form of financing in which you can use a vehicle for a period of time in exchange for making payments to the leasing company or creditor. In a vehicle lease, the leasing company continues to own the vehicle.

You do not gain equity.

But, you can go back to where you go the car from and see if they'll work a deal for you. Car leases have big prepayment penalties, but maybe that other car is worth it to you. See what they say.

Or just keep the car for another year and two months.

BTW, for an individual, leasing is a pretty stupid way of having a car. You can lease a car for so many years, and when the time period is up, you have no car, it goes back to the lessee. Oftentimes they offer to sell it to you at a discounted price, but when you could have been making payments you've just pissed through a lot of money.

There only two advantages to leasing a vehicle:

- The down payment is less than financing it.

- If you use it for business purposes, it's a tax write off (and that may not gain you anything over a purchase).

It is surprising to see this kind of question. I find it hard to believe that someone would lease a car and not know what they're doing.

Answer 4

The residual value is what the lender is saying the car is worth at the end of the lease, if you are not done making all of your payments then your current payoff is going to be higher then the residual value.  You need to call your lender and find out what your current payoff is, if you can sell the car for more then what your current payoff is then you have equity, if the car is worth less then you are upside down.  You can sell your lease on your own, you don't have to turn it in at the end of the lease.  

Your options on a leased car are turn it in at the end of the lease, sell it or trade it in.

You said the current value of your car is $28,685 if you are going of off blue book that value is probably wrong.  Blue book is wrong most of the time, they value cars much higher then they are really worth.  Good luck.