Lease numbers on 2024 4xe (Rubicon X) - seems a little off

[ormandj]

Can someone review these numbers? Is the acquisition fee for a 2024 4xe JLUR X actually $1095? MF of 0.00464 is definitely elevated, but I intend to buy out the lease shortly after (not eligible for rebates on PHEVs otherwise.) The trade-in value is fair. Agreed upon value is fair.

I've never done a lease before, and don't intend to keep this as a lease, so just want to make sure I'm not taking a bath if I buy this 2-3 months after start of lease.

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[five9dak]

This is over my head- the dudes on lease hacker are your best resource.

https://leasehackr.com/

 

[ormandj]

This is over my head- the dudes on lease hacker are your best resource.

https://leasehackr.com/

Already updated that 4xe thread with the same info. Thank you for the pointer, though!

 

[jax501]

Wow:
1) $22,754.38 Cap Cost Reduction?!
Plus
2) $13,000 in rebates?! (I guess $7,500 of that is the federal incentive for PHEV, but still)

 

[ormandj]

Wow:
1) $22,754.38 Cap Cost Reduction?!
Plus
2) $13,000 in rebates?! (I guess $7,500 of that is the federal incentive for PHEV, but still)

Yeah. I’ve been aggressive, and there are good incentives and coupons out there. Just trying to make sure I haven’t missed the boat somehow. Don’t forget that there is a trade involved, it’s not an insane deal.

 

[jax501]

If you plan on buying out the lease prior to lease maturity, don't forget you'll owe all the remaining lease payments + the lease purchase option fee + the residual value listed in the lease contract. Typically (not always) that total cost exceeds what it would have been had you financed the vehicle.

 

[ormandj]

If you plan on buying out the lease prior to lease maturity, don't forget you'll owe all the remaining lease payments + the lease purchase option fee + the residual value listed in the lease contract. Typically (not always) that total cost exceeds what it would have been had you financed the vehicle.

Will work out the math, but I’m getting $11,500 in lease incentives I’m not eligible for if I purchase, so that should flip the equation.

Down to 0.00409 on the MF now.

I am curious if in TX I will end up being taxed a second time on buyout. [Edit: Confident this is the case]

 

[martoaj]

It's high, but it's not crazy ... that is a big MSRP.

idk why there's an expectation of $1000 down here; you shouldn't be putting anything down on a lease, especially when the payment is already so reasonable because of the massive incentive + trade-in. Should be doing $0 down $0 drive-off and roll everything into the payment.

But what you're looking at here is effectively a ~$780/mo lease when you factor in the trade and down payment. That's not terrible considering the $76k sticker. Lots of folks with "great" deals back in the hayday of super low MFs were only in the mid $600 range with that high of a sticker.

You're really just getting hit by that MF; it's effectively a ~10% interest rate. That's where they're making their money on this. Is this lease through Chrysler Capital? IDK the absolute latest numbers, but if you're Tier 1 credit the MF should be more like 0.0033. Obviously the dealer can offer any rate they want to try and make some money on the deal, but from my reading of the contract that's where their profit is; the rest looks reasonable.

 

[ceddy]

IDK, everyone says to avoid downpayments on leases. Downpayments screw the numbers and make you think its a good deal. You are giving them 10k (trade in + 1k), and this will allow you to pay them 500$ for 36 month + 50k buy back. SO if you pull out the next day after signing, they will ask (500 * 36) + 50k + taxes? 83k?

It can't possibly make sense to pull out in 2-3 months.

 

[TheRaven]

IDK, everyone says to avoid downpayments on leases. Downpayments screw the numbers and make you think its a good deal. You are giving them 10k (trade in + 1k), and this will allow you to pay them 500$ for 36 month + 50k buy back. SO if you pull out the next day after signing, they will ask (500 * 36) + 50k + taxes? 83k?

It can't possibly make sense to pull out in 2-3 months.

Leases are no different than plain financing in that sense. Each month, you have a buyout number in your payment portal just like with a standard loan. You only pay the interest for the time in which you are leasing, so as long as you know what you are doing when you structure the deal, it's no worse to buy out at 3 months than it is at 35 months.

Same with the whole down payment thing - as long as you know what you are doing, you can put down whatever you want. There are savvy lease "hackers" that will pay the entire lease up front. No problem with that because they built the deal right.

 

[morph860]

Maybe your state is different, but the sales tax number seems off. I've only ever seen sales tax on the lease payments and not on the entire cost of the vehicle - 6J instead of 10C. And if you buy it out at the end, you'd pay sales tax on 6D.

 

[jax501]

Maybe your state is different, but the sales tax number seems off. I've only ever seen sales tax on the lease payments and not on the entire cost of the vehicle - 6J instead of 10C. And if you buy it out at the end, you'd pay sales tax on 6D.

In some states like Texas, you must pay taxes on the full amount of the vehicle upfront, whether you buy or lease. It makes leasing in Texas less favorable.

 

[martoaj]

Leases are no different than plain financing in that sense. Each month, you have a buyout number in your payment portal just like with a standard loan. You only pay the interest for the time in which you are leasing, so as long as you know what you are doing when you structure the deal, it's no worse to buy out at 3 months than it is at 35 months.

Yep!

Same with the whole down payment thing - as long as you know what you are doing, you can put down whatever you want. There are savvy lease "hackers" that will pay the entire lease up front. No problem with that because they built the deal right.

Well, kinda.

A "down payment" on a lease isn't particularly smart because you're loading a bunch of money onto the front of the deal ... just to make yourself feel better, and no other reason. If the car is involved in a crash and deemed a total loss, you lose any money you've paid. You're not building "equity" in a lease by putting money down, and (except as I note below) there's no interest charge benefit to putting money down. All you're doing is pre-paying a % of the lease, not making a "down payment" as you would be if it were financed.

The reason why people "hack" leases by paying 100% of the lease up front is that you get a massive discount on the Money Factor (MF) when you do that. It's called a one-pay lease, and when you drop the MF it saves you an incredible amount of money on the whole deal. If you're only going to pay 5 or 10 or 20% up front, you get no discount on the MF and save no money, so why are you bothering? Take that cash and do something else with it.

A lease should be paid either 0% up front or 100% up front. "Down payments" on leases are a tactic from dealers to make the numbers look good to move cars, nothing else.

 

[TheRaven]

A "down payment" on a lease isn't particularly smart because you're loading a bunch of money onto the front of the deal ... just to make yourself feel better, and no other reason.

Yes and no. A down payment is only a bad idea if you don't understand what you are doing. When you sign a lease, you agree to pay the calculated depreciation on the vehicle for the term of the lease plus interest. It really doesn't matter HOW you do that - 100% up front, 0% up front, or anything in between. The problem is clueless buyers who fall for the dealer's tactic of reducing payments by front-loading the lease. When that happens, you pay more. As long as you understand how much you are paying in total, it doesn't really matter.

If the car is involved in a crash and deemed a total loss, you lose any money you've paid. You're not building "equity" in a lease by putting money down, and (except as I note below) there's no interest charge benefit to putting money down. All you're doing is pre-paying a % of the lease, not making a "down payment" as you would be if it were financed.

This is not correct though - in all these examples, the lease is no different than financing. You absolutely can have equity in a lease, exactly like you can with financing, as long as you sell the vehicle at the end just like you would with traditional financing...don't just give it back to the bank.

There really are VERY few differences between a closed-end lease and traditional financing. It's really just the terminology used at signing. After that it's basically the same except that you have an extra option at the end of your term - you can turn the vehicle in no questions asked.

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