Correct!
While basically all other deals in the market are hot garbage, 6% under invoice is as good as it gets in any market.
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Not sure Iâm following but I could have purchased the vehicle for 1% less than that at the discounted price. And also gotten another $1,000 off with a manufacturer incentive.
But even with 10,000 down my monthly payment would have been several hundred dollars higher.
I donât know if thatâs necessarily the case. Thereâs another thread on here where they are leasing gladiators at about half of mine but those are base models with a 10% higher residual value.
Iâm new to the game so I just looked at a monthly payment difference of 80 to $90 and thought 48 mo was a no-brainer given that most of the vehicle particularly the driveline is still in manufacturer warranty. The 36-month payment would have been just over $700 which is still several hundred dollars less than a purchase payment with $10,000 down.
Perhaps once Iâve warmed up to leasing, (or gotten burned,) Iâll keep my future prospects within the bumper-to-bumper warranty but the truth is I still havenât wrapped my head completely around the idea of changing out a vehicle every couple years.
The question shouldnât be monthly payment, but total cost of ownership/use.
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Whether another trim is leasing with better RV is irrelevant. Thatâs not the one you picked.
Whatâs also irrelevant is directly comparing monthly payments between lease vs financing. Financing payments go up and down based on duration.
A 60m financing is going to be less than 48m, and a 72m payment is going to be even less. None of those tell you what the TCO (total cost of ownership) is, which is really what you need to look at.
Yes as none of the incentives you received were lease specific. So you would have received them purchase or lease.
Well if you were comparing to 48 month financing, thatâs is correct but then the extra payments you made would have resulted in asset value in the vehicle.
Leasing & Financing cannot be compared by just monthly payments.
For example, your total lease payments are $29,472 over a 48 month period. But at the end of 48 months, you own nothing.
But if you were to finance $60,000 ($55k + 6.5% tax) with $0 down @2% for 60 months, your payment would be $1,052 (something). At the end of the same 48 months, youâd have paid, $50,500 in payments with about $13k left on the loan with a car worth (if RV is anywhere correct) $33,000.
so if you were to sell the car for $33k at the end of 48 months, you have equity of $20k left after paying off the 13k left of the loan.
Again this is just a rough calc & there are a lot of factors that youâd have to consider & this is not always the case either so always have to compare case by case.
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Ownership in a lease forum? Ownership and use are two different topics.
Isnât the monthly payment a big part of the cost of use?
I donât disagree with mitigating the risk of paying for out of warranty repairs out of pocket by limiting the lease term, but a significantly reduced lease payment can become the same means.
The way I see it, the spread for the first 36 months of a 48 mo lease is found money. Found money that I can put in my pocket, or pay off almost half of the 4th year, or if I must, cover out of warranty repairs.
Other than paying up front to be risk averse, the only other benefit I see to a shorter lease is changing vehicles.
If you disagree, please spell it out beyond a one-sentence generalization.
Call it whatever you want. The point is, the calculation you should be looking at is your net total cost to use the vehicle over the period that you have it. That means making some estimates regarding how much cost you can recapture at the end by selling the vehicle if youâre comparing a financing option vs just leasing.
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What dealership? I hope it wasnât Central Florida CJDRâŚtheyâre crooks.
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Which is it?
You started by saying:
ânet total cost to use the vehicle over the period that you have it.â (Usage)
And the next sentence switched to:
" how much cost you can recapture at the end by selling the vehicle." (Post usage)
If thereâs a way to do both, feel free to enlighten me.
Unless you mean the buyout VALUE is that much better with a three year old vehicle as opposed to a four, well okay. If thereâs more than $3000 to be gained between the two terms without gaming the market at lease end, then I like the way you think. If not, then it seems to be one benefit or the other.
It is unclear to me how you can see these as conflicting statements. Your net cost to use the vehicle includes your acquisition costs and disposition costs (recaptured or otherwise).
I think you guys are in the same boat here:
I can park my 20k in a depreciating asset or keep it in my pocket or investments. I donât see the advantage of putting it in a car.
If my plan was long-term ownership then of course.
I also wouldnât consider leasing with the intent to buy back and keep it as a convenient means of lowering my payments for the first 48 months if thatâs what you guys are driving at, and I donât find tying up my limited cash, in a car of all things, appealing.
Who said anything about tying up your cash reserves?
Try Autobytel for IncentivesâŚuse your own zip
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I think some of you fellas just have really deep pockets. I have a budget. And that budget would be squeezed purchasing a base model. I would have to dump a lot of cash (relative to Me) to get a purchase payment into that budget or allotment of you prefer.
Or do you think leasing is for the sole purpose of getting a new vehicle every 24 to 36 mos.
I can put 10,000 down and stack another 300mo for 48 mos on a purchase in order to have 22k equity in a car, or I can keep my 22k over the same 48 months and do something else with it. 10k down with 3k annually at 6% is another $3700 that I wouldnât get from putting it into a car.
But reallyâŚ
Is all this about a 48 month lease instead of a 36, lol?
Is there this much contempt because a 48 month lease resembles a contracted (forbid!) purchase?
No, leasing is primarily a risk mitigation strategy where youâre offloading risk of unexpected depreciation, damage, and unforseen maintenance costs onto the bank, and you usually end up paying a penalty to do so.
Until recently, one could generally further hedge their bets, particularly with vehicles that tend to hold their value better than expected, by easily selling the lease to a 3rd party dealer, capturing the benefits of a rv error, while minimizing tax liability, without taking on any risk of rv error in the wrong direction. With 3rd party buy outs being clamped down on, that option is going away. Thatâs particularly troublesome on vehicles that tend to hold their value abnormally well, like say, the jeep wrangler variants.
The other side of that is vehicles with notoriously high maintenance/repair costs. Holding the vehicle for a period out of warranty erases the leasing benefit here. Youâre quickly eroding away the good reasons to lease.
On something like a gladiator, that makes the value of leasing questionable and a longer term lease even less beneficial, which leaves one in a position where they need to think long and hard about the cost benefit analysis of leasing the vehicle at all. How much extra are you paying in your total cost of âownershipâ to lease, without most of the benefits of leasing?
It all comes down to this: how much more is it costing you to lease, given a handful of potential scenarios, and what are you getting (or not getting) for that cost?
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$394 dealer fee?! In Florida?! Srsly?!
There are no discount dealerships in FL. But CF CDJR was nice enough to let test drive one of their diesel Overlands. I passed. But their big beautiful showroom had a big beautiful Rubicon and that caught my wifeâs eye. I would never aim that high unprovoked, lol.
I have a great story involving one of the sales guys at Orlando Dodge tho. He didnât save me any money, but I did get a whole lot more for it!
Are these not minor in the grand scheme?
What of paying tax on the entire purchase with the proposition of financing some or all on top of that? In Florida you buy the tax. Thatâs lost equity and more if you finance the purchase price tax purchase.
Sure, thereâs tax to pay, but letâs compare the cost deltas, ignoring any financing costs.
Tax on the purchase is going to be about $3500 (assuming 7% sales tax). On your lease, itâs about $2k total, so $1500 more on the purchase side. But to lease, youâre stuck with an acquisition fee to originate the lease and there $1000 more in retail incentives shown on your dealer screen shot above. Those two more than make up for the tax delta.
I calculated both and it appears to be a zero sum gain over the life of the lease term;
The out-of-warranty repair on a purchase is the same as a lease, no?
And the buyout proposition is much better for the lease, no? Howâs that for market value risk mitigation? That option is forfeit with a purchase.
And now we are getting to the crux of things.
I agree, the upfronts are a wash, so thereâs no cost advantage to leasing there.
The maintenance/repair is a wash, so thereâs no cost advantage there.
It all comes down to the coat advantage on a buy out.
All signs point to pretty much everyone locking down 3rd party buy outs, meaning with the lease, youâre basically going to turn it in at the end. If the value of the vehicle stays high, you probably wonât have any means to recapture that. Likewise, you donât have the risk of If it drops. So youâre left looking at the rv and asking if itâs worth paying extra rent charge to bet that for the first time ever, wranglers are going to fail to hold their value well.
Is that a risk thatâs worth paying extra to mitigate against?
More importantly, have you quantified what you actually are paying to mitigate that risk?
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And what are we talking here? A few hundred over 3 or 4 years? I can make that up with a modest return investment of the down payment.
What about the rent charge that is not part of a purchase? Thatâs the bigger nut at $5261/ $110mo. This could be the fly in the ointment, mitigated by interest charges on the purchase side (you said ignoring finance costs but theyâre there and not insignificant.)