what should i do - lease changeover

[COSMOS]

hi all

I quit my job on Friday - start a new one on November 7th and the job i just quit has been kind enough to send me home for four weeks on full pay because of the sensitivity of my role and the fact I am going to a competitor.

Problem is I am 18mths through a 3 year fully maintained novated lease of my car. So I have three choices;

1. Pay out the 39k and keep the car. I have to pay for all running costs except insurance which is current to March 06.

2. Continue the car payments post tax with the current provider of $1000 per month. Again I have to meet all the costs of running the car aside from insurance. These would continue until the car is paid out, $39k.

3. Try to renovate the balance of the lease ($39k / 18mths) to the new provider which is SMB. They can either agree or make me commence another lease. This would mean having to enter into another two year (at least) agreement.

To be honest I am over the car and keen to sell up. I told the lease company i will just continue the finance till I make my mind up. I have the cash to buy it outright so option 1 is still available.

Looking at the used market I would be struggling to sell it but I am happy to give it up for $34k and take a $5k loss as a part of life. When I add up what I have paid so far in post tax payments, the payout figure and the loss AND THEN deduct the running costs for the first 18mths the car works out at $44k on the road. I think thats pretty reasonable for an 04 VY II SS with leather/climate.

So whats your advice? Is $34k a reasonable sell price (would ask 35.5 and be prepared to move 1500). What else can i do. I obviously want to get out of it with as little expense as possible. Also - the new job pays a lot more than the current job so its certainly not a money issue, I am just over the car and looking for a change.

over to you
t

[Speedy Gonzales]

To be honest I am over the car and keen to sell up.

I believe you answered your own question.


the new job pays a lot more than the current job so its certainly not a money issue, I am just over the car and looking for a change.

Then sell it for something you know someone would easily snap it up at, a loss yes but not a complete one.

[SUX350]

well since your over it get rid of it..$34k sounds ok depending on how many klm its done.

[COSMOS]

well since your over it get rid of it..$34k sounds ok depending on how many klm its done.

39,000klm on the clock

[COSMOS]

[QUOTE=Speedy Gonzales]I believe you answered your own question.



indeed - but is there a more financially effective way to do this...?

[ACT_Cross8]

indeed - but is there a more financially effective way to do this...?

Depends what it is insured for, if you know what I mean :nyuk:

[Dacious]

I think you would be best advised to keep your lease going for financial reasons if your new company will allow salary sacrifice. If not, or you just want to dump it, dump it. Sometimes your circumstance just change. Unless you are going to form a company to subcontract your services. It may pay to check with a tax accountant.

You're probably still ahead of if you had paid for it retail as a full private purchase with a loan up front.

[Felony]

Well, I can't make your mind up for you, but I can give you some info on SMB, as that's who my lease is through.

1. ANYTHING mechanical can be placed through the lease. Brake upgrades, edits, whatever - if the mechanic doesn't charge SMB directly, you can pay for it, send in the reciepts and get a check back in the mail.

2. You can go to minus $2500 on your budget. That's tyres, fuel, mechanical. I know this cause I didn't budget enough for rubber, and put on slightly more expensive tyres than I really should of.

3. BEST service I've had from any company, apart from NVU :D

[muzza]

Check your payout vs what you can get for it (you already have it seems), then project it forward a bit, you might reach a better balance point in a few more months where your payments will overtake the more slowly declining actual value of the car - assuming you can re-novate with your new job, as without tax deductability it suddenly gets 20-30% more expensive in real terms.

[markone2]

Not being a wet blanket so to speak, but I recommend to err on the side of caution when forecasting the return on your vehicle in todays totally a-up 2nd hand car market..the constant model changes and new car discounting makes life tough for those us who wish to dispose of our much loved late model used vehicles...the competition is strong.... :eek: these are prices advertised last Saturday by Forum Sponsor in Brisbane

http://photothingo.com/users/1006/20051013112816.demo cars0260.jpg

[COSMOS]

I think the posts by felony, muzza and markone2 hit it on the head. I have emailed my new employer and asked them to investigate whether SMB will assume the novation mid term and let me continue for the next 18months.

By that point hopefully the car will be worth closer to 22k which is the residual and my 4-8k loss should I sell now would be minimised allowing me the full benefits of the car

On rough calculations I am losing $980 month to navote the lease of the car fully maintained versus $1027 cash payment a month just to keep the finance going. Sort of a no brainer.

Still the issue is I am not happy with the low down grunt. If I do decide to keep it i think a mail order tune, opened cats and maybe 2nd hole mode/k&n filter would be in order - a $1500 upgrade to improve the driveability and liveability of the car. My best mate is crying - telling me i am crazy to offload a V8 with leather and climate i have owned since new blah blah blah... he's right too i suppose.

Lets see what SMB comes back with...
t

[muzza]

Great prices markone2 - if you're buying. They are demo's "executive driven" (short thrashed) but still, gobsmacking value. I guess that's what we're up against coming out of lease. You wouldn't pay full wack for a car you were going to lease for this very reason.

Cosmos - you may already know that with a novated lease, as long as your employer allows you to package, you just have to sign a new deed of novation with your new employer, and as long as they are happy sending X amount of your salary to Y packaging company all should be sweet. If you gotta change packaging company well there's more paperwork, but there's nothing to stop you, it's why employers LOVE novated leases - they travel with the employee whenever they leave - no headaches for the employer left with a car.

Hope it all works well. :cool:

[COSMOS]

Great prices markone2 - if you're buying. They are demo's "executive driven" (short thrashed) but still, gobsmacking value. I guess that's what we're up against coming out of lease. You wouldn't pay full wack for a car you were going to lease for this very reason.

Cosmos - you may already know that with a novated lease, as long as your employer allows you to package, you just have to sign a new deed of novation with your new employer, and as long as they are happy sending X amount of your salary to Y packaging company all should be sweet. If you gotta change packaging company well there's more paperwork, but there's nothing to stop you, it's why employers LOVE novated leases - they travel with the employee whenever they leave - no headaches for the employer left with a car.

Hope it all works well. :cool:

i know - but as theres only 18mths left i only want to continue - not restart..

[andrewdisco]

Nothing like a few holden ad's to depress us all :D....

Sounds like you've already decided what to do.... if your in doubt at all right now, then not point signing up for 2 years and locking yourself into a agreement. You'll then kicking yourself 6-12 months down the track.

I buy my Holden's/HSV's 2nd hand with about 40k on the clocks to save money... but I find that no matter when i buy the things they still depreciate as fast as you pay them off. It's the nature of owning a holden. I remember when you use to pay a car off an increase your ownership in the vehicle... these days it's just about matching the depreciation.

A new one tax free would have to be as cheap or cheaper than your current one coming out of your nett wage... (thats what your saying isn't it ?).

So... if it's just a similar nett expense... and you're making more money anyway... may as well put those lease payments into a new one! Celebrate your pay rise with a HSV. Your worth it now :D

[COSMOS]

this is just too depressing...

http://cgi.ebay.com.au/2004-SS-VY-Commodore-No-RESERVE_W0QQitemZ4580579431QQcategoryZ102240QQrdZ1 QQcmdZViewItem

sold the exact same car as mine in an auto on Ebay for 29.5k today... jesus he must of been keen to get rid of it. i think for a 10k loss i may keep mine a bit longer...

hmmmm

[andrewdisco]

Not too impressive is it.... still - you can always advertise it and if it doesnt sell... well it doesnt sell.

2004 HOLDEN COMMODORE REDBOOK VALUATION.

VY II Sedan SS 4dr Man 6sp 5.7i
average kms 18,000 - 22,000
Trade in price guide* $27,700 - $31,100
National average price - private sale* $30,500 - $34,900
Price when new (RRP) $50,490