Is this a good lease deal?

[iki4life]

JL Sahara
15k miles, 39 months
0.00196 Money Factor
63% Residual Value
$5k down
MSRP- $45,680
Selling price- $41,700
$380 a month for 39 months.

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[nel1551]

JL Sahara
15k miles, 39 months
0.00196 Money Factor
63% Residual Value
$5k down
MSRP- $45,680
Selling price- $41,700
$380 a month for 39 months.

Not bad. 4.7 interest rate. Didn't know the Sahara such a low residual.

 

[iki4life]

If I were to buy it later, the total cost out the door would be about $46,800. Not a bad deal, not a great deal.

 

[Impy5]

I personally would not put 5k down on a lease. If something happens to the Jeep (its totaled in an accident) you lose that 5k. If you can handle a higher payment I would keep that 5k in the bank. Is this a Chrysler Capital lease?

 

[iki4life]

I personally would not put 5k down on a lease. If something happens to the Jeep (its totaled in an accident) you lose that 5k. If you can handle a higher payment I would keep that 5k in the bank. Is this a Chrysler Capital lease?

yes

 

[ThirtyOne]

I personally would not put 5k down on a lease. If something happens to the Jeep (its totaled in an accident) you lose that 5k. If you can handle a higher payment I would keep that 5k in the bank. Is this a Chrysler Capital lease?

I keep hearing this argument.

I honestly can say that no matter how many times I look at it I can't see why this is really a thing. It is one of those conventional wisdom things that just keep getting passed on. Maybe I just don't understand and if so please enlighten me because I just can't get my head around it.

First of all, the chances of totaling a Jeep are very low. I can't find an actual source but putting some data together I think it is less than 3%. Seems strange the conventional wisdom is so focused on this very low probability boundary case.

Second of all, think about what literally happens when you total a leased vehicle. Your insurance company gives you the market value of the vehicle. First you pay off the lease (remaining payments + residual), then you keep whatever is left. If you owe more than the market value of the vehicle then the gap insurance kicks in and pays off the difference.

Now let's look at the difference between not paying the $5k down and paying the $5k down. The residual value is the same. The market value is the same. What's left is the sum of the remaining payments. If you paid the $5k down then those payments are smaller. And they have slightly less interest. That also means the payments behind you were smaller too, so you are ahead in sunk cost. So you don't really lose the $5k do you?

Third of all, how is this different from a loan, when you are supposed to pay down as much as you can? Isn't the principle the same?

Now, if you have credit card bills at 21% and you are putting money down on a lease I would say pay off the credit cards instead. But otherwise in a lot of states $5,000 barely covers tax and fees.

 

[ThirtyOne]

JL Sahara
15k miles, 39 months
0.00196 Money Factor
63% Residual Value
$5k down
MSRP- $45,680
Selling price- $41,700
$380 a month for 39 months.

I would have to know the tax rate, doc fee, and loan acquisition fee to check the math. But first glance I would take that deal. Especially with CA taxes.

 

[iki4life]

I would have to know the tax rate, doc fee, and loan acquisition fee to check the math. But first glance I would take that deal. Especially with CA taxes.

My Lease Tax rate is 9%
Doc fee- $140
title- $53
Plate-$37
Lien-$25
tags-$30

 

[ThirtyOne]

My Lease Tax rate is 9%
Doc fee- $140
title- $53
Plate-$37
Lien-$25
tags-$30

EDIT: I switched the numbers in the lease calculator. The payment looks about right.

 

[MojitoJLUR]

I keep hearing this argument.

I honestly can say that no matter how many times I look at it I can't see why this is really a thing. It is one of those conventional wisdom things that just keep getting passed on. Maybe I just don't understand and if so please enlighten me because I just can't get my head around it.

First of all, the chances of totaling a Jeep are very low. I can't find an actual source but putting some data together I think it is less than 3%. Seems strange the conventional wisdom is so focused on this very low probability boundary case.

Second of all, think about what literally happens when you total a leased vehicle. Your insurance company gives you the market value of the vehicle. First you pay off the lease (remaining payments + residual), then you keep whatever is left. If you owe more than the market value of the vehicle then the gap insurance kicks in and pays off the difference.

Now let's look at the difference between not paying the $5k down and paying the $5k down. The residual value is the same. The market value is the same. What's left is the sum of the remaining payments. If you paid the $5k down then those payments are smaller. And they have slightly less interest. That also means the payments behind you were smaller too, so you are ahead in sunk cost. So you don't really lose the $5k do you?

Third of all, how is this different from a loan, when you are supposed to pay down as much as you can? Isn't the principle the same?

Now, if you have credit card bills at 21% and you are putting money down on a lease I would say pay off the credit cards instead. But otherwise in a lot of states $5,000 barely covers tax and fees.

Why I put zero down on a lease....Because I have never kept a lease until the end. They always do pull ahead leases, sometimes up to a year early.

 

[iki4life]

I have no idea how you are getting a payment that low. My lease calculator shows in the upper $500s for those parameters.

I dont know, thats what the dealer is giving me.

 

[Impy5]

I keep hearing this argument.

I honestly can say that no matter how many times I look at it I can't see why this is really a thing. It is one of those conventional wisdom things that just keep getting passed on. Maybe I just don't understand and if so please enlighten me because I just can't get my head around it.

First of all, the chances of totaling a Jeep are very low. I can't find an actual source but putting some data together I think it is less than 3%. Seems strange the conventional wisdom is so focused on this very low probability boundary case.

Second of all, think about what literally happens when you total a leased vehicle. Your insurance company gives you the market value of the vehicle. First you pay off the lease (remaining payments + residual), then you keep whatever is left. If you owe more than the market value of the vehicle then the gap insurance kicks in and pays off the difference.

Now let's look at the difference between not paying the $5k down and paying the $5k down. The residual value is the same. The market value is the same. What's left is the sum of the remaining payments. If you paid the $5k down then those payments are smaller. And they have slightly less interest. That also means the payments behind you were smaller too, so you are ahead in sunk cost. So you don't really lose the $5k do you?

Third of all, how is this different from a loan, when you are supposed to pay down as much as you can? Isn't the principle the same?

Now, if you have credit card bills at 21% and you are putting money down on a lease I would say pay off the credit cards instead. But otherwise in a lot of states $5,000 barely covers tax and fees.

I never really looked at it this way before, interesting, if you're going to buy it at lease end it's not really lost money I suppose. I've also never leased a Wrangler before so this is new territory for me, I've leased two Grand Cherokees and their depreciation is pretty bad. If the OP is comfortable with that amount he should do it, I'm kind of a "do what you think is best for you" type of guy. At the end of the day he'll be driving an awesome JL for good monthly payment. That Chrysler Capital MF is the lowest I've seen it in two years so that's definitely a plus.

 

[MojitoJLUR]

I have no idea how you are getting a payment that low. My lease calculator shows in the upper $500s for those parameters.

Residual value is 26k, so the delta is just over 15k, and with 5k down, payments are for 10k/39 months plus interest/fees...seems right to me

 

[iki4life]

JL Sahara
15k miles, 39 months
0.00196 Money Factor
63% Residual Value
$5k down
MSRP- $45,680
Selling price- $41,700
$380 a month for 39 months.

Selling Price if I were to buy all cash right now- $41,700.

Selling Price if I were to buy at the end of my lease-

$5,000 down +
$380 a month for 39 months = $14,820 +
63% residual value on MSRP of $45,680 = $28,778

Total buying price after lease ends= 5000+14,820+ 28,778 = $48,598.

The difference of Buying after lease ends - Buying all cash now = $ 48,598 - 41,700 = $6,898

This means they are making an additional $6,898 off me if they lease to me and I end up buying it after. That comes to about MSRP price out the door.


Someone with better knowledge please let me know if my numbers are correct.
Much appreciated

 

[MojitoJLUR]

Selling Price if I were to buy all cash right now- $41,700.

Selling Price if I were to buy at the end of my lease-

$5,000 down +
$380 a month for 39 months = $14,820 +
63% residual value on MSRP of $45,680 = $28,778

Total buying price after lease ends= 5000+14,820+ 28,778 = $48,598.

The difference of Buying after lease ends - Buying all cash now = $ 48,598 - 41,700 = $6,898

This means they are making an additional $6,898 off me if they lease to me and I end up buying it after. That comes to about MSRP price out the door.


Someone with better knowledge please let me know if my numbers are correct.
Much appreciated

That seems right to me.

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