Why NOT Lease JLUR?

[ez1putt]

I’ve leased multiple vehicles (non-FCA) and am thinking about leasing a 2020 JLUR. More specifically, I’m trying to understand why I buy rather than lease. On a lease I would have $0 down, while a purchase I would borrow about $20K. US Bank Lease Money Factor is .00175 vs auto loan rate around 4% is basically a wash.

The money appears to be so close on either option, it seems that the lease is the obvious choice – have the ability to walk away at 36 months or purchase at the residual value without tying up $30K for 3 years. Not worried about mileage or damage fees at lease end.

What am I missing?

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[TXRubicon]

Buying out a lease at an inflated residual value is one of the absolute worst ways to buy a vehicle if you plan on keeping it long term. The residual is proving to be higher than market value at current time, which is good for leasing but terrible if you at all intend on buying the vehicle later. Do not lease with the intention of buying later. Lease with the intention of starting over in 3 years or whatever your term is.

 

[SoCalWrangler]

I’ve leased multiple vehicles (non-FCA) and am thinking about leasing a 2020 JLUR. More specifically, I’m trying to understand why I buy rather than lease. On a lease I would have $0 down, while a purchase I would borrow about $20K. US Bank Lease Money Factor is .00175 vs auto loan rate around 4% is basically a wash.

The money appears to be so close on either option, it seems that the lease is the obvious choice – have the ability to walk away at 36 months or purchase at the residual value without tying up $30K for 3 years. Not worried about mileage or damage fees at lease end.

What am I missing?

Check credit unions and you may be able to get 2.5% interest on your loan. Unsure about your experience with jeeps but like many of us have found out. Once you own one, youll want to modify it. I had bought a JK in 2012 for 30k OTD. I added about 3k worth in mods to it and sold it for 27.5k four years later. The monthly payment came out to around 115 a month!

Needless to say I will always consider purchasing over leasing for wrangler.

Additionally, FCA is notorious for making it difficult to transfer leases

 

[ez1putt]

Buying out a lease at an inflated residual value is one of the absolute worst ways to buy a vehicle if you plan on keeping it long term. The residual is proving to be higher than market value at current time, which is good for leasing but terrible if you at all intend on buying the vehicle later. Do not lease with the intention of buying later. Lease with the intention of starting over in 3 years or whatever your term is.

Residuals are coming down (considerably) the last 60 days to the point I don't think it's inflated. 62% with 15K miles/ 36 months. With the money factor I'm basically paying a 4.2% loan on the 38% accounted for in the lease. This doesn't seem like a terrible deal.

I LIKELY will walk away at the end of 36 months, but this appears to give me a reasonably decent option to buy if desired (assuming the residual plays out as reasonably accurate).

Someone else mentioned mods --- I don't expect to mod, but that would obviously be a strong point against leasing if wanting to mod.

 

[TXRubicon]

We won't really know until we start to see vehicles at the 3 year mark. As of right now, JLs aren't holding their value terribly well right now due to the massive glut of inventory and dealers deep discounting them. Again, high residuals good for leasing but that's going to be a big unknown what the market will be 3 years from now.

Residuals are coming down (considerably) the last 60 days to the point I don't think it's inflated. 62% with 15K miles/ 36 months. With the money factor I'm basically paying a 4.2% loan on the 38% accounted for in the lease. This doesn't seem like a terrible deal.

I LIKELY will walk away at the end of 36 months, but this appears to give me a reasonably decent option to buy if desired (assuming the residual plays out as reasonably accurate).

Someone else mentioned mods --- I don't expect to mod, but that would obviously be a strong point against leasing if wanting to mod.

 

[Dkretden]

I’m old school.

Consumer auto leases were invented to keep the leasee poor and the leasor rich.

I don’t believe in them for consumers.

 

[TopDown2020]

I hope the residuals and MF hold out till I can get mine ordered, Not planning on keeping, so leasing gets the payments low!

 

[TXRubicon]

Also worth noting that you'll pay sales tax twice (at least a portion of it) if you buy your lease out. States like Texas especially are very tax unfriendly when it comes to leases because you end up paying full sales tax twice if you buy it out.

 

[threejeep]

I went throught this exact scenario over the last few months .I have leased my last few vehicles (Non FCA) as well. Ultimately, I felt I could get more control of my deal by buying. As I was negotiating with different dealers I was getting good price, bad lease deals. Good lease deals, and not so good price.

I like to get out of cars usually around 30 months or so, but two factors had me opt to buy. The first being I think the Jeep may be a vehicle I want to keep long term and transition to acsr for my son eventually or for fun trips, etc. Add to that the ability to make changes without worry.

What ultimately swung me to buying was the ability of Jeeps to hold their value. If I decide after 3 years or so I want to get out of it and I to a new car or Jeep I am confident I will be able to have equity in my loan position on top of the money I out down at purchase.

I went back and forth on this a lot and didn't make an actually decision until the day I picked up the car. I just wanted to give some of my thought process if it could help. Good luck.

 

[Germansheperd]

I’m old school.

Consumer auto leases were invented to keep the leasee poor and the leasor rich.

I don’t believe in them for consumers.

Or lease what depreciates and buy what appreciates?
The old school will have less cash (poorer) and leasee will be richer.

 

[Germansheperd]

Buying out a lease at an inflated residual value is one of the absolute worst ways to buy a vehicle if you plan on keeping it long term. The residual is proving to be higher than market value at current time, which is good for leasing but terrible if you at all intend on buying the vehicle later. Do not lease with the intention of buying later. Lease with the intention of starting over in 3 years or whatever your term is.

Who says the Wrangler residual is inflated? Multiple sources say the Wrangler is one the, if not the best cars for holding its value/resale value. If that is the case there is no possible way the Wrangler can have an INFLATED residual. If anything it’s under inflated and the leasing companies are making money off the return leases (auctions/foreign markets) making money both ways.

 

[Dkretden]

Or lease what depreciates and buy what appreciates?
The old school will have less cash (poorer) and leasee will be richer.

you’re right. The auto companies invented consumer leases because it’s better for the leasee. All the auto companies sat around and said, “hey, how can we create a program that gives move money to the consumer and less money to us.”

those auto companies are such nice folks to do that for you.

 

[LeaN69]

Because Wranglers are cheaper to buy. MF is usually high on them and lease therms are usually long (taking advantage of high resale) especially Saraha and Rubicon while Sports usually have higher residual.

Finance APR is cheaper then going MF and you don't have to pay Acq. and Dispo fees then after 30-36 months you can sell it privately and your total cost will be good amount cheaper then leasing with same sale price.

Unless something changed USB rates are best for 39+ months

 

[TXRubicon]

Because the actual market isn't matching the residual values. Not even close. Go look at what trade-in values are right now based on actual auction transactions. Vehicles are losing 30 - 35% in just year one, and additional 3-4% in year two. Granted, the first two years are the hardest on depreciation, but the JL as of yet is not coming close to how well the JK held its value. There are thousands of unsold units sitting on dealer lots, and dealers are discounting them deeply. Secondary market values have to adjust accordingly.

Who says the Wrangler residual is inflated? Multiple sources say the Wrangler is one the, if not the best cars for holding its value/resale value. If that is the case there is no possible way the Wrangler can have an INFLATED residual. If anything it’s under inflated and the leasing companies are making money off the return leases (auctions/foreign markets) making money both ways.

 

[Germansheperd]

you’re right. The auto companies invented consumer leases because it’s better for the leasee. All the auto companies sat around and said, “hey, how can we create a program that gives move money to the consumer and less money to us.”

those auto companies are such nice folks to do that for you.

Auto companies did not ‘invent’ auto leasing. Leasing was taking place in the 1800’s for horses, buggies, locomotives, and train cars. Auto leasing started in the teens by and INDIVIDUAL, became more popular in the 40’s for individuals and fleets, and hit mainstream in the 50’s.- pretty ‘old school’ if you ask me.
I never said leasing was better than buying it is a case by case basis. You call yourself old school but the fact of the matter is you OPINIONATED and what you spew cant be backed up by fact.

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