So there’s two sides of that coin… there’s the difference in interest vs rent charge (which the rent charge is likely to be quite a bit more than what you’ll pay in interest) and there’s all the equity you’re lighting on fire if the jeep follows the suit of every other wrangler ever and holds its value well.
Understand that you’re paying money here to bet on the value bucking a trend set over decades.
You lost me here. Please rephrase.
Let us assume that ccap follows pretty much everyone else and stops allowing 3rd party buy outs. There’s been rumors many times that they’re going to and it is very likely to happen.
If that’s the case, and you lease, you’re basically stuck turning it in at the end. If the vehicle depreciates more than expected, no skin off your back, you’re protected. On the other hand, if the vehicle holds its value better than the rv, you don’t have a good path to recapturing the equity. By leasing, you’re saying “I’m going to pay money to insure myself against unexpected depreciation and give up any claims to under depreciation.”
Now, with many cars, that’s a totally reasonable thing to do. In those cases, there’s a lot of value in paying a premium to lease… Historically, if we look at the wrangler, however, it holds its value extremely well. You’re highly likely to have the vehicle under depreciate and very unlikely to have it over depreciate.
You are paying to protect yourself for a very unlikely scenario and making sure you can’t recapture any of that value that has a very high likelihood of being there.
Even if/ when the interest is front loaded?
I understand the mfrs motivation, but historically, are the RVs that significantly low-balled? By how many points avg?
I have been treating RVs as an accurate representation of vehicle cost at the end of the lease term and you’re saying they’ve/ I’ve undervalued them. Hmm…
Not nearly as front loaded as the rent charge.
I assumed a relatively high RV was an accurate representation of vehicle value.
If I can be convinced otherwise, (and I appreciate your time and education thus far,) and my credit and budget can handle the load, I can still have them change the lease to a purchase (I haven’t taken delivery yet)
I would gain $1000 incentive and lose a 1% ($594) off invoice affiliate discount. I’ll compare the variables tomorrow but it may be with incentives, higher actual residual value, and no rent charge, there could be thousands more in realized value over a lease than I was aware.
What I mean there is rent charge is effectively interest applied to the average balance between the adjusted cap cost and the rv. Rather that initially being calculated at the financed value and reducing to zero, with the average interest payment being based on halfway between the otd price and $0, the average “interest” payment is based on halfway between the adjusted cap cost and the rv
Long story short, if all else is equal, a 2% apr loan is going to cost you a lot less in financing costs than a 2% apr equivalent mf.
A good place to start here is to calculate the total cost of ownership based on the financing terms (and different taxes/incentives) if you were to sell at the end of 48 months for the rv. Don’t forget to include the disposition fee in your lease costs.
Then run the numbers again assuming a few percent over and a few percent under the rv. How far under does the selling price have to go before you break even?
I went and looked at a Grand Cherokee L at Central Florida last month. They had them all market up $5k each plus a $2k “bullsh!t package” and a $1,099 dealer fee. I had an Affiliate Rewards number which bring the price down to 1% below invoice and they gave me a $900 discount saying that’s what it is on a $50k vehicle. Refused to show me the invoice on paper. Walked out 2 minutes later…
The guy got several thousand off of a car that he actually wants - that’s the big win. The buy vs. lease is practically irrelevant considering the lowish money factor and fee waiver etc…
Why pick apart his choices given the overall great deal? If it were all about squeezing every nickel, he would have bought a Versa or something like that.
Congrats on the new truck! Show us a pic when you get a chance.
Every business is different (OP says he leased it as a work truck) but purchasing definitely offers more options with taxes when considering the Gladiators GVWR is 6250lb. At the end of the day that is a conversation to be had with OP and their CPA.
As someone who leases a Sport S I’m curious what kind of work this truck will be used for, especially a Rubicon trim. Don’t get me wrong, I like mine a lot and it is reasonably capable but it doesn’t really check all the boxes when it comes to what you really need in a “work truck”. The Rubicon is worse in those aspects. It does look cool and is great if you are going to take it off road though.
Yes I am interested too. OP said “I’m in a region where customers place a high premium on their trades showing up in nice vehicles or at least newer vehicles.” I have a lot of friends that own their trade business and drive job to job in their nice trucks as their employees drive the vans around so I guess it doesn’t have to be “work truck” in the traditional sense.
I understand
He’s in a trade/line of work visiting and quoting clients in an area where people want to see him in a nice vehicle since he’s face of the company
If you’re hiring someone for a high end job you may want to see them in a nice vehicle (while I understand others here may not care so let’s not argue that).
Thanks man! I absolutely will.You get it, though I don’t mind the different perspectives and being referred to in the third person in questions in my own thread. The folks in this site has been very helpful.
If the third party buyout prohibition is not in my contract then I’m good to go, correct?
I like the idea of netting a few thousand total at lease end and purchase offers options that leasing doesn’t, I have a transportation budget and the lease fits it and the business pays for it.
I think I’ve covered myself well. Bulletproof? No. Manageable? Very much so. Though I will do the apples to apples comparison and get back with you because you’ve got me thinking.
Go to Orlando Dodge on W. Colonial.
They have a great reputation regardless of my experience. Back in June they offered me a lease at invoice.
Funny you bring that up…
This is an experiment of sorts.
I’m a 52 year old owner/ operator of a small construction plumbing business for 28 years in Orlando.
Initially I was going to be practical and trade my 15 year old, 281,000mi F150 in on a 1500 Bighorn. The SuperCrew F150 did double duty as a weekend family vehicle when the kids were little. There have been times I’ve had dedicated work vehicles but I’ve downsized and with no shop they’re not welcome in residential neighborhoods.
So my work vehicle is my weekend vehicle.
I like the Gladiator. I think it can do both for me. I’ve talked with other tradesmen in forums that it works for. There are definitely compromised to be had.
I stopped a guy on the street yesterday in a new Rubicon to ask him how he liked it. Just by chance he works out of his but his is not a work truck. He’s in the saddle all day bidding and checking jobs.
“Funny you should ask. I’ve had it for 6 months and it’s a great truck but I’m trading it in because the cab is too small.” Now we would make a Mutt and Jeff pair; he said he was 5’8". Didn’t give his weight but a big guy all around in every other way. Looked like he was squeezed into the seat. I’m 6’3" 200#, all legs. The test drives, one of which was extended and on the freeway felt comfortable enough. Nothing like the Bighorn though but that is an exceptional ride. It looks like I’ll be giving up close to a foot in interior space door to door and that will take a bit to get used to.
It’s funny how trucks work out. I drive a leased Tacoma, which I extended until December, and really wanted a Gladiator but then I drove a Big Horn and I was sold. Ride quality is night and day.
The F150 has been big but never really comfortable.
I rented a 2020 Bighorn back in Dec '19 for a 2 week job that was 3 hours away. I was blown away by every aspect of that truck and I would put its ride up against any luxury car. Powerful, smooth, quiet, and almost plush. I think it won the “Car of the Year” award and deservedly so. I was going after it until the Gladiator got me rethinking about a year ago.
As long as you are not going to be hauling sheetrock frequently it should be fine. As long as you are OK with the handling and noise at highway speeds then it should be OK there too. Personally I’d look at the Willys or Sport S with the Max Tow package if I was going to be hauling a lot of stuff around but they definitely don’t have the same looks as the Rubicon without some upgrades. They do appear to have better leasing programs at the moment though. Does this truck have the spray in bedliner? I’d definitely want that if I’m using the bed a lot. I’ve got a mat in mine that works well for my purposes but I’m not putting any kind of serious tools or equipment in there on a regular basis.
There’s way too much confirmation bias from the OP in this thread, reasoning with him is impossible.
Every single data point is molded to fit a predetermined decision, instead of the other way around. Exhibit A: “purchasing will tie up my cash reserves.”
NTM all the contradictory statements, like driving a decades-old vehicle was fine for his trade all this time but suddenly he needs a top trim brand new vehicle every 2-3 years, and the way to achieve that goal is to lease for 48m/15k and drive 24,000 miles outside of warranty.
Hard to take all these contradictions seriously so maybe he’s a troll intent on wasting our time. Either way I’m out.
Absolutely not. There is no clause in your contract that allows you to sell to a 3rd party dealer. It is at the bank’s discretion if is a mutually agreeable option or not. Your disposition options that you’re contractually entitled to are to purchase it yourself or turn it in at the end.
This is the important part. If you want to lease it, by all means, knock yourself out. Just be sure that you’re making an informed decision and understand that by doing a 48 month lease on this particular vehicle, you’re effectively removing nearly all the actual benefits of leasing. If the cost/benefit analysis still works out for you, great, but make sure it actually does.
Soft top seems like an odd fit for a work truck. Lack of any secure area to lock things in the vehicle would concern me. It’s also going to be a lot louder than a hard top.