Need Advice: Stuck in an Expensive Car Loan and Considering a New Model Y Lease or Finance

Hey everyone,

I’m in a bit of a dilemma and could use some advice. Here’s my situation:

  • I currently finance a 2022 Model Y, bought during the pandemic for ~$69k.
  • I have ~$43k remaining on the loan.
  • The current value of the car is $25-$30k, which means it is a negative asset.
  • My APR is 3.74%, and my monthly payment is close to $1k.

I’m looking into the most recent deals for a new 7-seat Model Y and have a few options:

  1. Keep the Current Car
    • No strong reason to switch; it’s a good car, about 2 years old.
    • I’m a bit unhappy with the 3.74% APR but not sure about the cost to switch.
  2. Finance a New Car
    • APR of 1.99%, with a $5.4k down payment (including fees).
    • Monthly payment would be $762.
    • Total loan would be ~$51k.
    • I’m not qualified for the $7.5k credit.
  3. Lease the Car
    • 15k miles per year.
    • $6.4k down payment (including all fees).
    • Monthly payment is $645.

[EDIT] After all the discussions, I have done the full analysis:

  • Assuming the current car deprecates 15% every year, and a new car deprecates 20% in the first few years
  • Total cost in the next 3 years
    • Keep the current car: $43k loan - $25k * (0.85)^3 = ~$27.6k
    • Finance a new car: $18k current debt + $60k (total loan) - $26k (resale value) = ~$52k
    • Lease a new car: $18k current debt + $29k (total lease) = ~$47k

Thanks in advance!