Lease Money Factor for Feb

JoeSchroe

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I just got back from the dealership, and the numbers they gave me seem kinda screwy. They didn't actually give me the Money Factor, so maybe I am just calculating it incorrectly.

They offered me the $45,585 for the 2018 Rubicon JL with Options, buyout of $37,236 (Great!). 36 Months, 15,000 miles.

$0 Down = $611
$1000 Down = $575
$2000 Down = $543
$3000 Down = $511

According to what I read on the web, thats a money factor of 0.0030

Also...I calculated a purchase plan that assumed 6 years, 72 months, 2.99% interest and a $30k trade-in value after 36 months and I come up $2000-ish better on the purchase.
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I just got back from the dealership, and the numbers they gave me seem kinda screwy. They didn't actually give me the Money Factor, so maybe I am just calculating it incorrectly.

They offered me the $45,585 for the 2018 Rubicon JL with Options, buyout of $37,236 (Great!). 36 Months, 15,000 miles.

$0 Down = $611
$1000 Down = $575
$2000 Down = $543
$3000 Down = $511

According to what I read on the web, thats a money factor of 0.0030

Also...I calculated a purchase plan that assumed 6 years, 72 months, 2.99% interest and a $30k trade-in value after 36 months and I come up $2000-ish better on the purchase.
That doesn't look like a good deal to me. With a 81% residual your payment should be much lower.
 

aug0211

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...

Also...I calculated a purchase plan that assumed 6 years, 72 months, 2.99% interest and a $30k trade-in value after 36 months and I come up $2000-ish better on the purchase.
Is that assuming the same amount down on the lease and the purchase? Or does your $30,000 trade go towards the purchase? Should an investment consideration be made on the lease option - investing that $30k with say an 8% return for that same period?
 

JoeSchroe

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The $30k trade-in is my assumed value on the Rubicon after 3 years of ownership.
 

aug0211

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The $30k trade-in is my assumed value on the Rubicon after 3 years of ownership.

So my question is, does the same thing happen to that $30k with both of your deals (lease and purchase)? Or, do you have to put it all down if you purchase while keeping most of it if you lease?
 

aug0211

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In other words, if you get $30k in your pocket with the lease route vs sinking that $30k into another down payment with the purchase route, don’t forget to take that into consideration.
 

JoeSchroe

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I'm not necessarily saying I would trade it in at that point, just trying to use its value after 36 months as a baseline, but I get what you are saying. I hadn't thought of the opportunity cost of that money over the 3 years. I'm also SLIGHTLY worried about keeping it under 15k miles per year, as my daily commute is 50-60 round trip each day.

This will be my 3rd Wrangler, 1st was a 2012 that I purchased somewhere around 28-30k and it traded in for 24.5k after 3 years and 55k miles. The current one is a 2015 with a few additions, I think it was like 36k new, hoping to pull like 26-ish in trade.

This is the first time I have considered a lease, so really just trying to get a feel for it.
 

aug0211

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I’m in the same boat! First time with a lease.

What I’m seeing is that I historically buy a new car every 2 years. I keep rolling equity from vehicle to vehicle. That helps keep the payments reasonable, but with auto loans anywhere from 1.8-3% depending on the year, that equity isn’t really doing much for me, sitting in a car.

My plan is to sell my current vehicle and drop my my equity into an investment earning, say, 8% annually. Then I’ll pick up an almost identical payment on a lease.

So, monthly cash flow doesn’t change (remember, I’m a dummy and buy a new car every 2 years so I always end up with some level of a payment, anyway) - but I’m at least earning on that chunk of money that was otherwise sitting tied up in a depreciating asset.

There’s no doubt that the best and most responsible move is to own your vehicle and drive it as long as possible without payments. That said, if I’ve made a decision to spend money on vehicles and that I want a new one every 2-3 years, the lease seems like a good move for me.
 

Johns79

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Hi. Looking for thoughts on this deal? Any place for improvement?

Screenshot_20180307-135710.png
 

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Hi. Looking for thoughts on this deal? Any place for improvement?

Screenshot_20180307-135710.png
Short answer is you get a Rubicon for $439/month and no money down. That's a good deal. Your selling price is good. Money factor is standard for Chrysler. Residual is at 70% which is a little high but nothing major. How many miles?

I personally prefer a 36-month lease so you are covered under warranty the whole time but that's a personal call.
 

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Thanks. This is for 12k miles per year
Standard residual is 68%. So this may not be a Chrysler lease.

Overall I would take it.
 

Johns79

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They are saying it's through Chrystler. Should I be concerned by the residual?
 

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aug0211

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That residual doesn't look off to me, at all. It's 68% with the 2% adjustment (15k miles is standard, and you're at 12k).

The MF also looks to be the Chrysler standard.

Only thing I'd ask is if they use any other banks (Credit Unions) - you can get a better residual and lower MF if they do.

The higher residual is nice in your monthly payments. If you are planning to buy it out at the end of the lease, you would probably be better off financing to begin with.
 
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