Hi community, I need help figuring out if this dealer is being honest with me.
He’s trying to get me to lease a new EV6, but I’ve decided to buy a used one (~2022) instead. I want to stop leasing, and with the steep depreciation of EVs, I think buying makes more sense in the long run.
Here’s what he said:
“It’s actually the opposite with EVs and depreciation. With a lease, you return the car without strings attached. But if you buy, you’ll have a huge amount of negative equity if you try to trade it in. I’ve seen it happen many times.”
Now, I’m currently upside down on a leased Mazda CX-5, and the dealer knows that. So “no strings attached” isn’t necessarily true. My plan this time is to keep the car for at least 6 years and pay it off. I figure it should still have some value after 8 years.
I know it’s hard to predict how EVs will age and if battery prices will drop, but I don’t see how I’d end up with negative equity—especially if I keep the car long term. I doubt I’d be worse off than ending a lease with nothing to show for it.
What do you all think? Am I understanding this right?
Never trust a salesperson—they just want to sell you something.
Leases don’t have anything to do with equity. When you lease, you don’t own the car, so there’s no equity—positive or negative. The dealer is right that a lease can’t have negative equity, but it also can’t have positive equity. They’re just trying to get you into a new car.
diallo said:
Never trust a salesperson—they just want to sell you something.
Leases don’t have anything to do with equity. When you lease, you don’t own the car, so there’s no equity—positive or negative. The dealer is right that a lease can’t have negative equity, but it also can’t have positive equity. They’re just trying to get you into a new car.
That’s not entirely true. I’ve had positive equity on my leased cars before. I traded in a 2020 Honda Pilot for a 2022 model and had $6k in positive equity. I also sold my leased 2022 Jeep Cherokee back to the dealership and got $1.5k.
So it is possible to have ‘equity’ in a lease, but it’s really about how the market value of the car compares to the buyout price.
diallo said:
Never trust a salesperson—they just want to sell you something.
Leases don’t have anything to do with equity. When you lease, you don’t own the car, so there’s no equity—positive or negative. The dealer is right that a lease can’t have negative equity, but it also can’t have positive equity. They’re just trying to get you into a new car.
That’s not entirely true. I’ve had positive equity on my leased cars before. I traded in a 2020 Honda Pilot for a 2022 model and had $6k in positive equity. I also sold my leased 2022 Jeep Cherokee back to the dealership and got $1.5k.
So it is possible to have ‘equity’ in a lease, but it’s really about how the market value of the car compares to the buyout price.
Technically, that’s not equity. It’s just that the market value was higher than the buyout price, so you came out ahead. People tend to call this equity, but the key difference is that if the market value had been lower, you could have just returned the car with no financial loss—something you can’t do with a loan.
Leases don’t have anything to do with equity. When you lease, you don’t own the car, so there’s no equity—positive or negative. The dealer is right that a lease can’t have negative equity, but it also can’t have positive equity. They’re just trying to get you into a new car.
That’s not entirely true. I’ve had positive equity on my leased cars before. I traded in a 2020 Honda Pilot for a 2022 model and had $6k in positive equity. I also sold my leased 2022 Jeep Cherokee back to the dealership and got $1.5k.
So it is possible to have ‘equity’ in a lease, but it’s really about how the market value of the car compares to the buyout price.
Technically, that’s not equity. It’s just that the market value was higher than the buyout price, so you came out ahead. People tend to call this equity, but the key difference is that if the market value had been lower, you could have just returned the car with no financial loss—something you can’t do with a loan.
Fair enough, call it what you want. It’s still a good way to get ahead on a lease if the market is in your favor.
Any car, EV or not, can have negative equity if you owe more than it’s worth. It can happen if you buy when the market is high and then the value drops. But I wouldn’t focus too much on equity.
I think it’s more important to ask yourself if you can afford the payments and if you’re happy driving the car for the long term. If you’re planning to keep the car for 6+ years, who cares if it has negative equity? At the end of the loan, it’ll be yours.
chozen said:
Any car, EV or not, can have negative equity if you owe more than it’s worth. It can happen if you buy when the market is high and then the value drops. But I wouldn’t focus too much on equity.
I think it’s more important to ask yourself if you can afford the payments and if you’re happy driving the car for the long term. If you’re planning to keep the car for 6+ years, who cares if it has negative equity? At the end of the loan, it’ll be yours.
The dealer’s comparing leasing a new EV6 to buying a new one. He’s saying the trade-in value after a lease might be better than the resale value of a car you bought, which could leave you with negative equity. But that doesn’t apply to your situation.
You’re comparing buying a 2022 EV6 to leasing a new one. A 2022 model has already gone through the worst of its depreciation, so you’re not likely to lose much more value in the next few years. I think buying used is a smart move.
emma said:
The dealer’s comparing leasing a new EV6 to buying a new one. He’s saying the trade-in value after a lease might be better than the resale value of a car you bought, which could leave you with negative equity. But that doesn’t apply to your situation.
You’re comparing buying a 2022 EV6 to leasing a new one. A 2022 model has already gone through the worst of its depreciation, so you’re not likely to lose much more value in the next few years. I think buying used is a smart move.
If you buy a car, and a couple of years later you still owe $30k on it but it’s only worth $20k, then you have negative equity. You could sell it for $20k, but you’d still owe the rest of the loan.
That’s what the dealer means by ‘negative equity.’
I think buying makes more sense because of steep depreciation.
Buying something you expect to depreciate quickly might not make sense financially. But if you plan to keep the car long-term, it could still be the right choice for you.
If you buy a car, and a couple of years later you still owe $30k on it but it’s only worth $20k, then you have negative equity. You could sell it for $20k, but you’d still owe the rest of the loan.
That’s what the dealer means by ‘negative equity.’
I think buying makes more sense because of steep depreciation.
Buying something you expect to depreciate quickly might not make sense financially. But if you plan to keep the car long-term, it could still be the right choice for you.
I get what you’re saying, but my plan is to keep the car for a long time. I figure if I avoid the first couple of years of depreciation and hold onto it, I’ll get better value in the long run.
olivia said:
Hi community, I need help figuring out if this dealer is being honest with me.
He’s trying to get me to lease a new EV6, but I’ve decided to buy a used one (~2022) instead. I want to stop leasing, and with the steep depreciation of EVs, I think buying makes more sense in the long run.
Here’s what he said:
“It’s actually the opposite with EVs and depreciation. With a lease, you return the car without strings attached. But if you buy, you’ll have a huge amount of negative equity if you try to trade it in. I’ve seen it happen many times.”
Now, I’m currently upside down on a leased Mazda CX-5, and the dealer knows that. So “no strings attached” isn’t necessarily true. My plan this time is to keep the car for at least 6 years and pay it off. I figure it should still have some value after 8 years.
I know it’s hard to predict how EVs will age and if battery prices will drop, but I don’t see how I’d end up with negative equity—especially if I keep the car long term. I doubt I’d be worse off than ending a lease with nothing to show for it.
What do you all think? Am I understanding this right?
If you look at it as a long-term investment (like 10+ years), buying an EV can make a lot of sense. EVs have fewer moving parts, less maintenance, and lower fuel costs. Even if you have to replace the battery after 10 years, it’ll likely still cost less than buying a new car.
olivia said:
Hi community, I need help figuring out if this dealer is being honest with me.
He’s trying to get me to lease a new EV6, but I’ve decided to buy a used one (~2022) instead. I want to stop leasing, and with the steep depreciation of EVs, I think buying makes more sense in the long run.
Here’s what he said:
“It’s actually the opposite with EVs and depreciation. With a lease, you return the car without strings attached. But if you buy, you’ll have a huge amount of negative equity if you try to trade it in. I’ve seen it happen many times.”
Now, I’m currently upside down on a leased Mazda CX-5, and the dealer knows that. So “no strings attached” isn’t necessarily true. My plan this time is to keep the car for at least 6 years and pay it off. I figure it should still have some value after 8 years.
I know it’s hard to predict how EVs will age and if battery prices will drop, but I don’t see how I’d end up with negative equity—especially if I keep the car long term. I doubt I’d be worse off than ending a lease with nothing to show for it.
What do you all think? Am I understanding this right?
Also, if you buy a 2022 EV6 for less than $25k, you can qualify for a $4,000 federal tax credit.
olivia said:
Hi community, I need help figuring out if this dealer is being honest with me.
He’s trying to get me to lease a new EV6, but I’ve decided to buy a used one (~2022) instead. I want to stop leasing, and with the steep depreciation of EVs, I think buying makes more sense in the long run.
Here’s what he said:
“It’s actually the opposite with EVs and depreciation. With a lease, you return the car without strings attached. But if you buy, you’ll have a huge amount of negative equity if you try to trade it in. I’ve seen it happen many times.”
Now, I’m currently upside down on a leased Mazda CX-5, and the dealer knows that. So “no strings attached” isn’t necessarily true. My plan this time is to keep the car for at least 6 years and pay it off. I figure it should still have some value after 8 years.
I know it’s hard to predict how EVs will age and if battery prices will drop, but I don’t see how I’d end up with negative equity—especially if I keep the car long term. I doubt I’d be worse off than ending a lease with nothing to show for it.
What do you all think? Am I understanding this right?
Also, if you buy a 2022 EV6 for less than $25k, you can qualify for a $4,000 federal tax credit.
I haven’t found any EV6s under $28k in my area yet, but I’m hoping to find a deal in the next couple of months.