Lease deal.. any Good?

BaldEagle

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Thanks ThirtyOne. Seemed odd that the residuals on my initial lease offer were based off MSRP minus destination.
My understanding is leese are always based on MSRP





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TheRealTVGuy

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I'd say that price looks good. I would like to see the residual and money factor to make sure there is nothing too funny going on. I always say to do the math but I have looked at enough of these that a Sport in the mid-$300's is good.
Hi ThirtyOne, may I pick your brain? I don't know anything about leasing so I'm trying to learn. Here's my situation:

I want to lease a new tricked-out JLUR.
I'd like to order it from the factory. Can they even do that for a lease vehicle?
The MSRP is $53,045.
Is a final sales price of 5-8% off MSRP even realistic?
I'm in Lake County, FL where the tax rate is 7%.

I have a 2015 JKU Sport with 42k miles that I believe would sell for at least $30k privately because of upgrades (Smittybilt SRC rock rails, AEV rear bumper, AEV rear-dif skid plate, AEV front skid plate, AEV premium front bumper, Smittybilt X20 10,000 winch, Mopar OEM LED Fog lights, Mopar OEM LED headlights, Odyssey Extreme battery, Premium soft top, Jeep grab-handles, Katzkin leather, Mopar all-weather floor mats, Mopar black fuel door, Mopar black rear tail light guards, 17" Fuel wheels, Nitto Grappler 295/70/R17 tires)

Do dealers accept trade-ins for leases? How does that work? What do you think a dealer would offer for my Jeep? I owe $15k on it right now.

How much cash would be required? Can I put down additional cash? Should I?

I am looking at this as a lease-to-purchase deal.

Now here's the kicker...
My credit score is 725. My wife and I own our own business where we take a small W2 salary and we'd like to lease the Jeep as a business write-off. We do fairly well, but we also have a good accountant. Last year our business showed a loss.

Sorry if this is TMI but knowing all of this, can I even get a lease and what do you think the payment would be?
 

ThirtyOne

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Hi ThirtyOne, may I pick your brain? I don't know anything about leasing so I'm trying to learn. Here's my situation:

I want to lease a new tricked-out JLUR.
I'd like to order it from the factory. Can they even do that for a lease vehicle?
The MSRP is $53,045.
Is a final sales price of 5-8% off MSRP even realistic?
I'm in Lake County, FL where the tax rate is 7%.

I have a 2015 JKU Sport with 42k miles that I believe would sell for at least $30k privately because of upgrades (Smittybilt SRC rock rails, AEV rear bumper, AEV rear-dif skid plate, AEV front skid plate, AEV premium front bumper, Smittybilt X20 10,000 winch, Mopar OEM LED Fog lights, Mopar OEM LED headlights, Odyssey Extreme battery, Premium soft top, Jeep grab-handles, Katzkin leather, Mopar all-weather floor mats, Mopar black fuel door, Mopar black rear tail light guards, 17" Fuel wheels, Nitto Grappler 295/70/R17 tires)

Do dealers accept trade-ins for leases? How does that work? What do you think a dealer would offer for my Jeep? I owe $15k on it right now.

How much cash would be required? Can I put down additional cash? Should I?

I am looking at this as a lease-to-purchase deal.

Now here's the kicker...
My credit score is 725. My wife and I own our own business where we take a small W2 salary and we'd like to lease the Jeep as a business write-off. We do fairly well, but we also have a good accountant. Last year our business showed a loss.

Sorry if this is TMI but knowing all of this, can I even get a lease and what do you think the payment would be?
Wow. A lot in there. Let me unpack it a little bit.

First bit of advice - Understand you are doing three separate but related transactions:

- Buying the jeep
- Financing the jeep
- negotiating your trade

A lease is just another method of financing. You can also pay cash, do a loan, steal the Jeep.

So yes you can do a factory order and yes you can negotiate the sales price separate from the lease agreement. As a matter of fact it is critical because it is the best way to control your lease payment.

There is one wrinkle though - technically they can't lock in the lease payment until the Jeep ships from the factory. A good dealer will at least give you an estimate in writing and the lease programs for the Wrangler are pretty stable since there are no incentives on them. The residuals have gone up a point or two. I expected rates to go up a point or two but maybe not who knows.

As far as your price goes Florida sucks. But look all over this forum on the dealer threads. You should pay NO MORE THAN 1% below invoice. You can get that with an affiliate code through your employer or by joining Tread Lightly. An aggressive price would be 5-6% below invoice but you may have to travel to get it. If you don't know how to calculate invoice there is a thread here that has invoice pricing and you can also get a POC from the dealer that shows invoice pricing.

I have to say this - because of the high residuals and relatively high money factors buying out a leased Wrangler is going to cost you in the long run. And with your equity you may find that there is not much different in payment. Your credit is good enough to get probably a 3-4% rate even on a 60 - 72 month loan. I would definitely run the numbers both ways. Not just payment but total cost. If you are really trying to keep the payments as low as you can for as long as you can you would look into a longer lease with 15,000 miles/year. This will push the residual down when you buy out and will lower you payments after that. But financially it will cost you much more than a loan. And you will still be leasing when you are past the warranty so you will be investing in a Jeep you don't have much equity in. These are personal decisions and my advice is always to do the math on your specific deal and do what makes sense to you. Get a lease calculator and loan calculator and work it out.

As far as your trade here is the bad news - All your mods probably won't help your trade value. Most people do better to part them out on Craigslist and trade stock, or sell the Jeep privately and hope to find someone who values your exact set of mods like you do. A quick glance shows selling prices in the low 30's for similar Jeeps so that is good. You may have $15,000 in equity to work with.

As far as trade/cash down on a lease here is the bottom line. Conventional wisdom is don't put anything down on a lease. I personally don't agree with that but I am in the minority. I personally think the sweet spot is between $2,500 - $5,000. That will reduce your lease payment. You literally cannot put more down than the sum of your lease payments and I can't recommend locking close to $15,000 up in a lease. You may be able to apply some of the equity to the lease and cash some of it out. Never done that before. There may be some tax benefits to apply some of the trade in to your lease. Again you would have to do the math to see if it is worth it.

So I don't like to tell people what to do but honestly my gut is you do a private sale for your existing Jeep in the low-to-mid $30s and then purchase the Jeep on a long-ish loan like 72 months. You will probably be around $550 on your payment and you will gain equity more quickly and spend less money than a lease buy out.

But if you want to get your payments down you will have to run the different scenarios and see what is right for you.
 

TheRealTVGuy

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Wow. A lot in there. Let me unpack it a little bit.

...

But if you want to get your payments down you will have to run the different scenarios and see what is right for you.
ThirtyOne, Thank you so much for the quick reply and the insight! I think the third option (Stealing a Jeep) may be my best bet, lol!
 

jhonn236_AZ

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may be a silly question but how does the MF equates to interest rate? How does the math work?
 

jhonn236_AZ

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nevermind, google answered my question :rock::cwl:
 

JeepRubiCan

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To assess any lease deal you need to provide:
MSRP
Selling Price
Residual % or $
Money factor
Listing of fees (dealer fees, doc fees, admin fees, DMV/ registration fees)
Tax rate in your state

If you ask dealer for the breakdown and they refuse to provide, then assume it’s a bad deal and move on.

Hows this deal look ?? Any help is appreciated..

3 Year lease @ 15k py - $468.00 per month - with $3k trade equity down plus tax's

MSRP - $52,309
Selling Price - $49,334
Residual % - 69%
Money factor - .00193
Listing of fees (dealer fees, doc fees, admin fees, DMV/ registration fees)??
Tax rate in your state - %7.65
 

ThirtyOne

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Hows this deal look ?? Any help is appreciated..

3 Year lease @ 15k py - $468.00 per month - with $3k trade equity down plus tax's

MSRP - $52,309
Selling Price - $49,334
Residual % - 69%
Money factor - .00193
Listing of fees (dealer fees, doc fees, admin fees, DMV/ registration fees)??
Tax rate in your state - %7.65
Rubicon or Sahara?

edit - Based on your user name I'll assume Rubicon. That looks like a solid Chrysler finance lease deal. But selling price looks high.
 

JeepRubiCan

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Rubicon or Sahara?

edit - Based on your user name I'll assume Rubicon. That looks like a solid Chrysler finance lease deal. But selling price looks high.

Yes sir a Rubicon. I agree on the selling price. Figure I can negotiate the sell and trade values to make it better.
 

BaldEagle

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Rubicon or Sahara?

edit - Based on your user name I'll assume Rubicon. That looks like a solid Chrysler finance lease deal. But selling price looks high.
Ask to see invoice ask them to lower it 3-6%
 

JeepRubiCan

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Hope ThirtyOne is on.

2018 Jeep Rubicon Loaded. Deal doesn’t feel good.. thoughts?

MSRP:$54k
Sell Price - $49,141
Money factor - 8% Ally ... yuck
Residual- 75%
36 mo 15k miles
$2k down
$540 a month. Includes fees and taxes.

Any thoughts or help are appreciated!
 

BaldEagle

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Hope ThirtyOne is on.

2018 Jeep Rubicon Loaded. Deal doesn’t feel good.. thoughts?

MSRP:$54k
Sell Price - $49,141
Money factor - 8% Ally ... yuck
Residual- 75%
36 mo 15k miles
$2k down
$540 a month. Includes fees and taxes.

Any thoughts or help are appreciated!
No
 

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