Lease vs. Purchase, Never leased before. HELP

[Chris D]

Pay off your current Jeep. Avoid a Fleece. Keep making your 'payments' to yourself, when you have enough buy another vehicle. The additional costs in financing vs owning outright are frequently overlooked. ie insurance is 1/2 the cost, you take better care of YOUR vehicle. I have never seen over time where payments(leasing) are more economical than no payments(owning).

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[kj11]

Pay off your current Jeep. Avoid a Fleece. Keep making your 'payments' to yourself, when you have enough buy another vehicle. The additional costs in financing vs owning outright are frequently overlooked. ie insurance is 1/2 the cost, you take better care of YOUR vehicle. I have never seen over time where payments(leasing) are more economical than no payments(owning).

Yea, obviously paying cash is your best bet. This is solid advice for buying a 2033 Wrangler ?

 

[rayvonp]

I agree with most people saying do not dump a lot of money into a down payment on a lease just enough to cover tax and first payment. I have both purchased and leased vehicles, it really depends on how often you wanna get a new Jeep and do you put a lot of accessories on after you buy it if you plan on keeping it for a while then purchase if you think you’re gonna wanna get a new jeep in the next 3 to 4 years and you don’t do a whole lot of accessories I don’t drive a lot then a lease might make sense

 

[nenovster]

I’m an accountant/auditor so I had to jump in on this. Here’s math on this deal:

The dealer is saying that Residual value of the car after 2 years will be 62% of MSRP or approximately $30,900:

And this is how the dealer plans to get from the MSRP (including the dealer-installed accessory) to that residual value:

I am off by a few $$ but whatever…

On the other hand, the true depreciation for Wranglers is much lower than the 38% suggested by the dealer invoice. CarEdge says that Wranglers depreciate approximately 24% over 2 years (even that seems on the high side but I did not find another source). That leaves a potential upside for the dealer of approximately $7,000 after the lease is over and they resell the car.

When leasing, over the long run, you are paying extra for getting a new vehicle every few years. If you did not have equity in your vehicle, your lease payment would have been $833/month. In my opinion, leasing is not for people who cannot afford paying off an owned car.

 

[JLRyder]

Don’t do it.

 

[mllcb42]

If you did not have equity in your vehicle, your lease payment would have been $833/month.

Meanwhile I'm leasing a $64k 4xe for $380/mo equivalent on a one pay and if/when the jeep is worth way more than the residual value near lease end, I'll just sell the vehicle and pocket the equity, saving thousands in sales tax vs if I had purchased and offloading all the risk of diminished value on the bank.

 

[Deleted member 59498]

I only leased one car, it was no fun.

If you are going to change Jeeps in 3 or 4 years don't have a lot of down payment lease.

If you intend to keep 5 or more years buy.

The Wrangler holds its value even before all the crazy, so if going to keep it for a while will keep value. Wrangler and 4Runner ran neck and neck for resale value after 5 years.

If you really want my opinion then buy don't lease put all your current value of your current Jeep into the new one. Reduce your payment and don't accept the first price they gave you for your current Jeep. Go get other quotes on buying it out.

Oh I didn't get into or read most of the posts in this thread.

 

[Deleted member 59498]

Oh and tired of Tax payers paying for other peoples car purchases.

 

[thedonkeyslayer]

I’m an accountant/auditor so I had to jump in on this. Here’s math on this deal:

The dealer is saying that Residual value of the car after 2 years will be 62% of MSRP or approximately $30,900:

And this is how the dealer plans to get from the MSRP (including the dealer-installed accessory) to that residual value:

I am off by a few $$ but whatever…

On the other hand, the true depreciation for Wranglers is much lower than the 38% suggested by the dealer invoice. CarEdge says that Wranglers depreciate approximately 24% over 2 years (even that seems on the high side but I did not find another source). That leaves a potential upside for the dealer of approximately $7,000 after the lease is over and they resell the car.

When leasing, over the long run, you are paying extra for getting a new vehicle every few years. If you did not have equity in your vehicle, your lease payment would have been $833/month. In my opinion, leasing is not for people who cannot afford paying off an owned car.

The lease having a lower residual value is the exact reason why very few people actually turn-in a Wrangler off a lease. They buy them out and then trade-in/sell so they can realize the equity. My dealer told me he couldn't remember the last time someone actually turned a Wrangler back in at the end of their lease.

 

[laroo]

The lease having a lower residual value is the exact reason why very few people actually turn-in a Wrangler off a lease. They buy them out and then trade-in/sell so they can realize the equity. My dealer told me he couldn't remember the last time someone actually turned a Wrangler back in at the end of their lease.

Generally, Jeeps have a high residual value, but it still doesn't completely cover the low depreciation, and values are higher than the residual at lease end. As long as Jeep resale values stay high, Jeep leases will continue to be a good option. Leasing numbers (RV, MF) also need to be favorable, and this month's are less so. Is this the start of a trend, or will they be better next month?

And with Chrysler Capital, they normally allow someone else to buy it out (dealership, Carvana,...), so you don't lose the taxes when buying out yourself. There are conditions with CCAP, but they are generally consumer-friendly, especially when compared to Ally or other leasing companies. If I'm leasing a Jeep, I'm insisting on using CCAP.

Of course that doesn't mean CCAP won't change their policy in the future. I've read other companies have changed lease contracts due to the crazy used market over the last year.

 

[TheRaven]

When leasing, over the long run, you are paying extra for getting a new vehicle every few years.

Not always the case. As mentioned many times previously in this thread and others, there are good vehicles for leasing and there are bad vehicles for leasing. The Wrangler is one of the best examples I know of. I already posted the example of mine - i'm paying less, yes even over a 9-year period, to lease than to traditionally finance.

 

[Old Dogger]

A lease is somewhat like renting a home. At the end, one has nothing tangible in the way of a commodity, but rather just a receipt.
If one doesn't have cash to buy it, then take out a larger loan on ones home. At least this way you can write off part of it to your taxes.

 

[GATORB8]

A lease is somewhat like renting a home. At the end, one has nothing tangible in the way of a commodity, but rather just a receipt.
If one doesn't have cash to buy it, then take out a larger loan on ones home. At least this way you can write off part of it to your taxes.

Except instead of the receipt, you have the option to purchase the vehicle at a residual value established at the time of contract, allowing the option to recuperate equity from your payments.

 

[kah.mun.rah]

This might be obvious but if you lease with the intent to buy later, select the least yearly miles possible to lower your payment and then when you buy out the lease (before it officially ends) the actual miles you used won't matter.

 

[GATORB8]

This might be obvious but if you lease with the intent to buy later, select the least yearly miles possible to lower your payment and then when you buy out the lease (before it officially ends) the actual miles you used won't matter.

Mileage also adjusts your RV, normally a point per adjustment. So, realistically, if MF is less than your anticipated loan APR for the buyout (if financing) then it would be slightly cheaper to move that percent into the lease instead of in the loan.

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