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Lease to Buy or Just Buy?

Mainsail

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I'm once again considering ordering a Wrangler and starting payments, something I haven't had in decades. My 2005 WK is still good, but it's getting up there in years and lots of little things cropping up.

Is there any advantage to leasing with the full intention of buying it out later? Or is it better to just buy it right from the start.

I'm looking at getting a 2dr Willys or higher, but not the Rubicon. I'll be putting $15K to $20K down to keep the payments low.
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ThirtyOne

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If you have money to put down, then just buy.

You will always pay more over time if you lease to buy. There are legitimate reasons to do it, but with the money you are putting down they don't really come into play.

If you have credit card debt, for example, then I would recommend paying it down instead and it may make sense. But that doesn't sound like your situation.
 
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Mainsail

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No, no debt whatsoever outside the house mortgage, which won't be going away anytime soon even with the extra $300 a month I send them. Credit rating is in the mid 800s so I should be able to lock in a low interest rate.
 

dgoodhue

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I am similar situation as you are with $15-20k to put down. I have run the numbers, it costs more. If I invest the 15K and get a 8% return it is about the same. I am (likely)leasing my Wrangler, but I am leasing because I am starting a business this year and want the capital if needed. I would buy it outright otherwise.

Wranglers have great residual values, so it keep the leases down. One big downside it the buyout if going to be higher. The buyout for my Jeep will be $35k range. If you were to lease and potentially play to buyout it, the Ally lease have higher residual, but also higher interest rates. This ends up with a lower lease payment, but it is horrible for buying out the lease out. In my case, it add $5k to the total cost to save ~$10 month.
 

EdSoCal81

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I’m still considering between buy or lease, but since I usually keep cars less than 3 years. I’m leaning towards leasing, since I’m only paying taxes on the monthly payment vs the entire price of car. For my situation, payment is about $150 less to lease
 

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Fuel Fire Desire

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Depends on your financial situation. When I first leased mine, I could not afford the $600/mo to buy, nor was I entirely sure I wanted to keep a first-off-the-line model of an entirely new design (my first off the line JK was a mess). I did a 39 mo lease with $1000 down and $299/mo on a sticker price of $39,800. Buy out was $28,800. With incentives and discount, my total cost of my lease was about exactly what depreciation was. So in the end.....the whole process has turned into a 101 month loan with interest applied to the remaining 72 months. Making car payments on a 8 year old vehicle isn’t ideal, but looking at values of 10 year old JK’s with similar options, I’ll never be under water on it, and can back out at any time with minimal (or no) loss. Moreover, this isn’t a vehicle I plan on turning in. It will be a daily driver until comfort/ needs/ reliability no longer become practical, then it will become a dedicated trail rig/ toy. I will run it into the ground until I can’t rebuild it anymore, then sell it for scrap many years down the road.

I’d never do this on a vehicle with a lot of depreciation, but on a Wrangler that holds its value very well, I’m comfortable with it.
 

sk00pie

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I've leased a 2018 until last month when I bought a 21 Willy's. At the time I was able to get a great lease deal, $259 a month, $3k total out of pocket including taxes and fees. The bank was doing a 81% residual which seems to be unheard of shortly after I signed. If I were able to get a similar deal I MAY consider leasing again, but over those 3 years I realized how much I love having a Wrangler and wanted one for life. Wound up factory ordering exactly how I wanted and getting 11% off MSRP/8% under invoice. If you're going to keep for a while and able to get a discount like many others have on the forum my vote is to buy.
 

MORubi

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I've leased a 2018 until last month when I bought a 21 Willy's. At the time I was able to get a great lease deal, $259 a month, $3k total out of pocket including taxes and fees. The bank was doing a 81% residual which seems to be unheard of shortly after I signed. If I were able to get a similar deal I MAY consider leasing again, but over those 3 years I realized how much I love having a Wrangler and wanted one for life. Wound up factory ordering exactly how I wanted and getting 11% off MSRP/8% under invoice. If you're going to keep for a while and able to get a discount like many others have on the forum my vote is to buy.
Where did you order from?
 

aginoc

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Never, ever, ever, put big money down if you are leasing. There are a variety of reasons for that, but the biggest is that if you have an accident and the car is totaled, you will loose the money. The general rule is that if you decide to lease, put the minimum amount down (ideally $0 or just the license and fees). You want to avoid what is referred to as an up front "cap reduction" (i.e., down payment).

In terms of lease v. buy, there is no single answer. If you know for sure you'll be in the car for only 3-4 years, then more often than not, you'll be better of leasing. This is particularly true in high sales tax states (like CA where I am). If you buy, you'll pay sales tax on the whole car up front, but if you lease you only pay sales tax on each payment (which will typically be a total of 30-45%. of the car's total value).

On the other hand, if you know you'll be keeping the car for an extended period, you're usually better off buying (not always). Interest rates on loans are lower than leases and you'll save on disposition fees, etc. There are other considerations, including if you can deduct your car expenses, etc.
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