My wife has her eye on a 23 Series III Grand Wagoneer. The package we like is a bit hard to find, but we’ve been able to find one in Alabama (we’re in Georgia). While the dealer gets back to me with specifics, I’m trying to decide btw lease and buy. I’d like some help stress testing my understanding.
Note: Our family car is the one we like treat ourselves on, so we usually replace every 3-4 years.
From LH Rate Finder:
RV: 49%
MF: 0.0019
That RV seems rough. The way i see it though:
If i lease the car i could either walk away as planned at the 3 year mark or sell the lease in case it didn’t depreciate as much as expected.
With a purchase, at the 3 year mark I may or may not have equity but have no option to walk away. This would appear (to me) to incentivize the lease.
Just comparing some ballpark numbers, we’d come out a little bit better on the lease (vs 60 mo finance), and still have the option to buy it if we wanted.
I really hope that calc is just an example lol. You’ll need to compare the interest rate in the lease to what you can finance at to see if your logic holds. Either way nothing good comes out of financing or leasing a vehicle that depreciates like a rock. In some cases the lease works bc huge discounts and rebates make up for the falling rock. If this vehicle doesn’t have huge discounts/rebates it’s a hard pass.
This calc is just an example, sort of a worst case scenario built up. It’s comparing the lease with the MF and RV numbers i pulled compared to a 60 mo finance at 5.75%. So it sounds like first priority is get the price down far enough to soften depreciation.
Once that is done, perhaps leasing still works out better?
I guess the one deciding factor is if you can claim Section 179 depreciation on the purchase (vs lease which you are not able to). If you can wait you might also be able order the vehicle at a discount from one of the volume CDJR dealers (mall of Georgia/Gupton in TN).
This is unfortunately a vehicle with no right answers. If your wife isn’t set, an Lexus LX might be able to hold its value better. Or the Caddy too (no discounts here though). Jeep doesn’t seem to be interested in having a Mercedes like firesale for models that rot in lots.
Whether or not you have equity isn’t a measure of that, because there are variables involved that have little or nothing to do with total cost (for one thing, whether or not you have equity / how much equity you could have will swing wildly just based on the term you choose… on the identical loan anount and APR).
Her eyes must only be on the front . Below MSRP is also possible now on tahoes and Yukons so might be worth looking at other large suvs as well. These two would likely be better purchase option in my opinion.
. Below MSRP is also possible now on tahoes and Yukons so might be worth looking at other large suvs as well. These two would likely be better purchase option in my opinion.