Posting here, a buddy approached me today, and i have no idea what to tell him.

He has a new job, with a ton of travel, and needs a TT, The smallest one he figures he can full time in, is about 23ft, its loaded weight is around 6700pds, well, thats the max GVW anyway. He really, wants a big fifth wheel, so does his wife, (thats the key ) His options are wait for a bigger truck, or lease to buy now.

He is way upside down in his truck now, owes 28k on a 2006 QC SLT. He's making about 5-7k a month. No house payment, anything but truck/food/hotel bills. What would be the better option, make some big, like 1k a month big payments until he can pay it down to what he can get on trade. I figure thats like 10k though. Or, roll his negative equity up into a lease, make some bigger payments, or buy it in the end, however that works, i have never leased.

What is the better option?

Pay down for a year, wasting huge money on hotels.
Tow the 7k pd trailer with the 1/2ton until its paid down.
Roll the negative equity into a lease on a dually?

 

Evidentally he found a stealership with good deals on qc cummins dually's. like 30, 32 or 34k. They are willing to lease to him. Evidentally they are going to roll the neg. equity over into the lease, to make the lease like 40k. Then at the end he can (numbers est)

a) buy it for the 17k or whatever the buyout price is.
b) turn it in.

(how can he do b? wouldn't that mean the dealer and/or bank would be taking the neg equity in the ***?) this doesent sound right to me, but it's a little over my head.

Any one have any ideas?

 

Anyone with any any lease/own/your ufcked advice>

 

For me leasing is better since I lease through my business which makes it 100% taxe deductable throughout every year. For business, it's the best way for me in canada, not sure how the U.S. works.

For personal, well if you don't want the hassle and always want a new car, lease is the way to go, but think of it this way, you rent a home, you always pay and its never yours. Now you buy the home, 20/25/30 years later its yours, even 5 years into your term, you still have something to show up for the investment, some money will come back to you when you'll sall it...

Sure there's lower payments on a lease, but you always make a damn payment, if you buy, bigger payments, but the damn vehicle is your's.....

 

you found the one vehicle that will cover 10k negative on a lease. if he can afford the payment go for it.

 

I will point out some personal expierances with Revenue Canada that add a snd though to the concept of not leasing.

You can not write off a 100% of your lease cost's, Revenue Canda will deduct Km for personal use to and from place of employment, You have to provide daily milage reports if asked and you can only Right off a % of work use in porportion of personal use.

My employer pay's me a car allowance, and the government takes it all each month, I can write off a % off work expense's, But I get aduited every year.

I know people who own thier own companys and try to write off a 100% of thier lease's, and the Government allways seam s to come asking for money ( cnd government has 7 years to come back on you )

One advantage of buying is for five years you can write of the depreacation, its still based on a % of work use, But in the end you own your truck.

The biger question is consider is credit rating, Banks don't want to deal with you if you have a debit on something your never going to own, if you want a house and have a lease, its a negative debt.

So if you need to establish your credit, lease for the shortest term possiable and never put money down, all you doing is buying down your payments with your own money.

And no matter how hard you try not to, you will go ever your monthly milage per month, even if you pre pay for your milage.

Pay off what you owe, or don't buy, if your working in upside down, your paying off your old truck and renting a new one and at the end of your trem, you own nothing...nothing...

 

your friend won't be able to roll so much negative equity into a lease. if lower monthly payments are what he is looking for, he'd be best with a purchase for as long a term as possible...i know for a fact that there are payment terms up to 96 months. there is a huge amount of rebates on the vehicles at this time so now would be the time to do it. goodluck to him!