Tips on Buying Cars: Upgrading a new car with negative equity, volvo xc60, audi q5

Hi Roger,
I own a 2011 Rav 4 limited with about 14k miles on it.  When we made the purchase it was primarily my wife's choice, but now long story short, I'm the primary driver of the vehicle.  While it is a fantastic vehicle, it's not for me and I want to get rid of it.  Problem is I rolled negative equity into it from our last car that died and now I owe $26k on it. I' m looking at moving into a higher end SUV like a Volvo XC60 or Audi Q5 but I'm torn between leasing, buying new or buying used. I'm thinking the lease would be good to "bite the bullet" now and pay a higher monthly payment so that I would be free and clear in 2-3 years.  If I bought new or used we would plan on keeping the vehicle for 7-8 years. Any suggestions on leasing vs buying new vs buying used for my situation?  I'm already pre-approved through my credit union at 1.99% so if I do buy I have a good rate to finance at.  Any advise would be greatly appreciated!

RAV 4  

Hey Mark,

The short answer is sell your RAV 4 yourself ...if it's a 4x4 then you aren't as backwards as you might think. That would be the smartest way to do it. If you aren't inclined to do that and want to trade just know that you will be leaving several 1,000 dollars on the table.

If you are still set on trading it in then if you bought anything except the Audi then you will be making a big mistake. The Volvo SUV's are nothing but trouble ...and they are very expensive to have work done on. Since yours will be new or almost new and you have to have it then make sure you don't own one for one second outside of it's factory warranty. The Audi Q5 and Q7 are both incredible vehicles that are really really fun to drive ...and they look disgustingly good.

Buy or lease?

If you have 1.99% money then definitely buy...your 72 month payment will be the same as a short term lease (or more likely less) Since you should buy vs lease in your circumstances then the decision of whether to buy new or pre-owned comes into play and the advice i would give to my own mother is to NEVER BUY NEW.

You can buy 2013's right now with under 10k miles on them all day long. If that's the way you decide to go then just know that you will have a much better ability to negotiate the price down than you think. You will want to send me an email and a link to the car you are considering and i will tell you what the car has just sold for in your market (within the last 90 days) and what a good price to pay would be. I would encourage you to look at the certified pre-owned cars ...those will usually come with a better warranty than a new car and will look and drive like brand new.

My email address is can get to me alot faster there. In the mean time please feel free to ask me as many follow ups as you want so that when you get a survey sent to you from allexperts you will be happy to give me those perfect 10's.

I have attached a book sheet (best as I could tell from your email just add and subtract options that it may have or may not have)so you can get a feel for where you ate at on your trade.