I’m considering trading in my 2021 F-150 XLT Sport Ecoboost for either the 2024 Lightning Flash or Lariat. Right now, I owe about $39k on it and I’m estimating a trade-in value around $29-30k, which leaves me with negative equity of about $9-10k. I’m not planning to put anything down, just looking to do $0 down to keep my cash on hand (I realize this may not be the best choice). I plan to roll this negative equity into a new loan or lease.
I’m hopeful that with all the rebates, a $7,500 credit, and promotional rates, I can help offset that negative equity when moving into the Lightning. I know it might be wishful thinking, haha! My main question is, in this situation, would it be better to lease or take out a loan?
Some more info: I have an X-Plan code from work; great credit; I live in Florida and drive around 500 miles weekly; I currently pay about $812 per month on the loan; and even though I’d exceed mileage limits on a lease, I could buy it for the predetermined price at the lease end to avoid those fees.
I think you’re going to struggle to get even close to $30k for your 2021 XLT. You might want to plan for more like $22-25k. You’re in a pretty tough spot with that negative equity. Plus, just be careful about mile overage on a lease; you could end up paying extra. I leased a Lightning but had to trade it in after going way over my mileage.
These vehicles lose value really fast. Even quicker than gas trucks. I personally wouldn’t go into negative equity for this. And leasing isn’t the way to go. It’s a waste of your money.
Zenith said:
These vehicles lose value really fast. Even quicker than gas trucks. I personally wouldn’t go into negative equity for this. And leasing isn’t the way to go. It’s a waste of your money.
I leased and got a fantastic deal—$650 a month for three years on a Lariat.
I don’t see this being a long-term vehicle, especially with how much they depreciate.
We leased a Model Y early on, and it has lost 66% of its value in four years.
Just a heads up to OP; listen to what others are saying here. Leasing might not be the best path, especially with negative equity and high mileage.
Driving 500 miles a week means you’ll hit your mileage limit before your lease ends. I financed my truck and I’d choose that route again. It’s really fun to drive!
You’ve already taken the biggest part of the depreciation on your current vehicle, pushing that into the lease on a faster depreciating truck is a step in the wrong direction. Best bet is to ride out the current one for a couple more years until the depreciation levels out, and then sell it. In the meantime save some cash for a new truck.
Leasing might be the way to go since these trucks lose value so quickly. I had about $8k negative on my previous vehicle but ended up trading that in for an XLT while paying $660 a month, which is $100 less than my old payment. I did it in December and got $17k in rebates and tax credits.
I can’t see any lease working for 26k miles a year. Your best bet is to get a purchase loan, especially at 0% within Ford, and reassess after the rebates and incentives.
Mal said:
I can’t see any lease working for 26k miles a year. Your best bet is to get a purchase loan, especially at 0% within Ford, and reassess after the rebates and incentives.
My wife has done leases with other companies, and we usually buy the vehicle at the end to avoid paying any mileage fees. Is Ford not offering similar leases? I’m okay with loans and like 0%, but I need to ensure I get the best possible deal.
@Finley
Going for 0% upfront is going to be much better based on your credit history, even if you plan to buy after the lease. You’re comparing a 10% used car loan with a 0% loan on a residual that may end up being $45k. That could mean a savings of over $10k in interest.
Rolling over negative equity usually makes sense only for leases, but with your driving habits, a lease might not be right. The only time it could be wise is if you received substantial rebates to cover the negative. Just know you might have to keep the truck for a while since you could be paying MSRP given your situation.