So you would think it’s better to lease for 3 years. You are effectively getting 50% longer lease but your depreciation is only about 25% more.
But there is $12000 of rebate, including $7500 of subsidy. Because those amounts are fixed, in one case it’s spread over 24 months and in another case over 36 months. So you get a lot higher per month rebate over 24 months.
The net affect is that for a 2 year lease my effective per month Payment is only $30 higher than that for a 3 year lease. That seems like a small premium to pay to have the flexibility to upgrade after 2 years. That means over the course of 2 years I have paid about $720 extra and then at the end of 2 years I get to upgrade. I have never been the kind of person who sought this out but given how small of a premium that is, why not.
Just checking if I am missing anything important here.
Sometimes the shorter lease terms also yield a lower effective monthly payment.
I hate picking out cars, and would prefer to do this every three years vs. two.
I regret doing 24 months on my current car (vs. 36), even though 24 made more financial sense, because now I’m forced back into the market a year earlier than I’d like.
Perception of value varies so much from person to person.
Great point. That’s frankly the only reason why I am considering a 3 year lease.
I am really not enjoying reaching out to dealers again. Even though I knew I want to stick with XC90 and didn’t have to research again. I guess the brokers somewhat make the hassle go down.
The XC90 is on track to reach the previous generation Grand Cherokee level of dinosaur, albeit with a better starting point than an already-old platform. Does it really matter? No, since it’s still a nice car and only a 2 or 3 year lease. Something to consider, though, is that the EV version and hybrid refresh will probably be out in 2 years.
Probably passed on as cap cost reduction. For NYS in particular, there is a $500 Drive Clean rebate with a minimum term of 36 months, but must be NYS reg and NYS dealer. Not a big deal since it’s only $500–on many EV leases, 24 months makes much more sense.
