Lease vs. Purchase, Never leased before. HELP

[court.brink]

Hello all,

I've never posted before, but since purchasing my first Wrangler in 2020 (2018 Wrangler JK Unlimited Sport) I have learned a lot from all of you experts so thanks for that! I am currently looking at my options as far as getting into a new 2022 Wrangler JLU Sport S. I went to a dealer nearby yesterday and got the information for leasing vs. purchasing (I will attach the information below) and I'm trying to weigh out my options and see if I'm looking at this the right way. I've learned a lot from other threads regarding leasing and I've never leased a vehicle in my life so here goes.

The vehicle I'm looking at is at 2022 JLU Sport S MSRP is $49,159. I would be trading in my 2018 JKU Sport which they appraised at $29,500 which equals $10,565 in positive equity. I hadn't negotiated the price down yet (I know i know) but the dealer ran the rough numbers for me while I was there. Even going all the way up to an 84 month term (which is obviously unfathomable and not the best option) at a 4.24% APR I would be paying around $540-560 per month on a loan which is a bit more than I wanted to budget for. On the other hand, for the lease option (which I had never really considered before, but I may have to) for a 48 month lease, 12 miles per year (may need to bump it up to 15), and no money down, I would be paying approximately $363 per month. I don't see the money factor on this sheet and I'm not sure if/how someone who is smarter than me about all of this might be able to figure it out doing a calculation? I'm wondering if this looks like a legit deal or am I getting hosed by the dealer?

Any kind of suggestions, info, and/or insight would be very much appreciated. I'm trying to wrap my head around possibly leasing and I am trying to learn all the ins and outs such as Hidden costs, fees, etc either throughout the lease or at the end of the lease?

Thanks in advance for any info you can provide!

Courtney

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[court.brink]

To add to that, I'm also concerned (possibly unnecessarily) whether it's a good idea to trade my 2018 Wrangler and jump into a lease?

 

[Coach]

I wouldnt dump all your equity into a lease. Only enough to cover tax, title and 1st payment. Take the rest out as cash to you. If you total the jeep driving off the lot, your're out that money. You dont own the vehicle the leasing company does and will get the insurance check. This will raise your payment though.
Have you considered leasing a 4xe? They have $7500 tax credit and if you lease, and go through crysler capital, they apply that $7500 as a cap reduction. You could lease a 4xe for less or equal to same JLU.
We started with a JLU in our new car search but ended up with a 4xe because of the $7500.

 

[mferrara91]

What are your plans for the new Jeep? Everyday driver or will you be doing heavy mods? If it's an everyday driver and you plan on getting a new Jeep in 4 years again, then leasing is the way to go. If you are doing heavy mods, I wouldn't lease unless you are planning to buy it out at the end or trade out of it before the lease is up. It really comes down to what your budget is. If it were me, I'd pocket the 10K in equity and lease with no money down.

 

[laroo]

1. I don't know how your current Sport is configured, but I just sold my 2019 to a dealer for $36k. Check the value on Carmax, Carvana, Driveway before committing to their value.
2. You shouldn't be paying MSRP unless you can't wait. If you can wait, custom order at 4-6% under invoice.
3. Depending on your credit, you should be able to get lower rates than 4.24%. Some credit unions are still near 2%.
4. I've heard that you should never dump a bunch of money into a lease.

 

[WhtRubi]

If you already own your existing vehicle outright, leasing is a bad option. You have the ability to trade in and lower your payment (though not as low as you'd like in your situation) by using your current car as a down payment. With leasing, after the lease term ends, you have the option of leasing again and having to come up with a down payment, buying the car outright at an inflated number, or having no car at all. Also consider the mileage, since owning a car gives you the freedom to go anywhere at any time whereas a lease you will be paying per mile over the total (32 miles/day @12k, 41 miles/day @15k).

I would suggest holding off and saving some money to bolster your down payment. Maybe also pay off some debt or build credit so you can lower your APR (4.24 seems a bit high).

I know there's still a lot owed on your current car, but it's low mileage and fairly new... is there a reason for wanting to trade up other than "new shiny thing?"

 

[sk00pie]

If you can wait, you should 100% factory order! You can easily find 10-12% under MSRP from a variety of dealers with 0 negotiation needed. My 22 Willys had a MSRP of 48.5k, sale price of 43k, 0 negotiating needed. It was also exactly the specs and options I wanted.
First buy out your lease. Your $10k equity makes it worth to pay the sales taxes. Then hold onto the your 2018 until the new one is ready, then sell it and make at least a $5k profit.

 

[mferrara91]

Is the new vehicle marked up above MSRP? $50K for a Sport S would mean that thing has almost every option if it's not marked up.

 

[Coach]

If you can wait, you should 100% factory order! You can easily find 10-12% under MSRP from a variety of dealers with 0 negotiation needed. My 22 Willys had a MSRP of 48.5k, sale price of 43k, 0 negotiating needed. It was also exactly the specs and options I wanted.
First buy out your lease. Your $10k equity makes it worth to pay the sales taxes. Then hold onto the your 2018 until the new one is ready, then sell it and make at least a $5k profit.

I've emailed a few local dealers about factory order. Best I could get was $1000 off MSRP. I'll be applying tread lightly discount when it finally arrives.

 

[court.brink]

I wouldnt dump all your equity into a lease. Only enough to cover tax, title and 1st payment. Take the rest out as cash to you. If you total the jeep driving off the lot, your're out that money. You dont own the vehicle the leasing company does and will get the insurance check. This will raise your payment though.
Have you considered leasing a 4xe? They have $7500 tax credit and if you lease, and go through crysler capital, they apply that $7500 as a cap reduction. You could lease a 4xe for less or equal to same JLU.
We started with a JLU in our new car search but ended up with a 4xe because of the $7500.

This answers my question perfectly. I wasn't sure it was a great idea to put my entire trade equity towards the lease and your input actually sounds like a good option! Thanks for that! I have not looked into the 4xe too much, but I may have to see what it's all about before pulling the trigger on something. Thanks again for the insight!

 

[court.brink]

What are your plans for the new Jeep? Everyday driver or will you be doing heavy mods? If it's an everyday driver and you plan on getting a new Jeep in 4 years again, then leasing is the way to go. If you are doing heavy mods, I wouldn't lease unless you are planning to buy it out at the end or trade out of it before the lease is up. It really comes down to what your budget is. If it were me, I'd pocket the 10K in equity and lease with no money down.

This would be my daily driver and not a ton of off roading. Mods would be minimal so that wouldn't be a concern for me with leasing either. Pocketing the $10k and going the leasing route sounds like the smartest decision at the moment. Thank you!

1. I don't know how your current Sport is configured, but I just sold my 2019 to a dealer for $36k. Check the value on Carmax, Carvana, Driveway before committing to their value.
2. You shouldn't be paying MSRP unless you can't wait. If you can wait, custom order at 4-6% under invoice.
3. Depending on your credit, you should be able to get lower rates than 4.24%. Some credit unions are still near 2%.
4. I've heard that you should never dump a bunch of money into a lease.

My current Sport is pretty basic, no big screen, power windows and locks, but in great condition. I did get a slightly higher offer from Carmax online of $31,800 so I may need to look into that as well. I can definitely wait, this is my first Wrangler and it's going to be hard to say goodbye when the time comes because it's been so good to me... just trying to get something with a few more bells and whistles :D

 

[Coach]

This answers my question perfectly. I wasn't sure it was a great idea to put my entire trade equity towards the lease and your input actually sounds like a good option! Thanks for that! I have not looked into the 4xe too much, but I may have to see what it's all about before pulling the trigger on something. Thanks again for the insight!

Also, go to another dealer. Find similiar jeep and get a quote to compare deals.

 

[court.brink]

If you already own your existing vehicle outright, leasing is a bad option. You have the ability to trade in and lower your payment (though not as low as you'd like in your situation) by using your current car as a down payment. With leasing, after the lease term ends, you have the option of leasing again and having to come up with a down payment, buying the car outright at an inflated number, or having no car at all. Also consider the mileage, since owning a car gives you the freedom to go anywhere at any time whereas a lease you will be paying per mile over the total (32 miles/day @12k, 41 miles/day @15k).

I would suggest holding off and saving some money to bolster your down payment. Maybe also pay off some debt or build credit so you can lower your APR (4.24 seems a bit high).

I know there's still a lot owed on your current car, but it's low mileage and fairly new... is there a reason for wanting to trade up other than "new shiny thing?"

You hit the nail on the head with "new shiny thing" lol I definitely don't NEED a new car and I love mine now, but with used car prices as high as they seem to be right now I figured I would at least look and weigh out my options. I'd really like to go the purchase route, but I need to shop around for the best rate. The 4.24% was a precalculated number since he didn't run my credit at that time. I guess the next step is shopping for a good rate from here... Thanks for your input!

 

[court.brink]

Is the new vehicle marked up above MSRP? $50K for a Sport S would mean that thing has almost every option if it's not marked up.

That's what I was thinking. Here is the link if you want to check it out. IF I'm going to consider this I would definitely need them to come down somewhere on the price, but I wasn't sure what would be a fair price?

https://www.caldwellchrysler.com/new-Columbus-2022-Jeep-Wrangler+Unlimited-Sport+S-1C4HJXDG5NW165336

If you can wait, you should 100% factory order! You can easily find 10-12% under MSRP from a variety of dealers with 0 negotiation needed. My 22 Willys had a MSRP of 48.5k, sale price of 43k, 0 negotiating needed. It was also exactly the specs and options I wanted.
First buy out your lease. Your $10k equity makes it worth to pay the sales taxes. Then hold onto the your 2018 until the new one is ready, then sell it and make at least a $5k profit.

This is interesting to me because I've always figured factory ordering would be more, but why the price cut? Do you think it would be better to factory order to lease or purchase?

 

[SQTowelie]

That's what I was thinking. Here is the link if you want to check it out. IF I'm going to consider this I would definitely need them to come down somewhere on the price, but I wasn't sure what would be a fair price?

https://www.caldwellchrysler.com/new-Columbus-2022-Jeep-Wrangler+Unlimited-Sport+S-1C4HJXDG5NW165336




This is interesting to me because I've always figured factory ordering would be more, but why the price cut? Do you think it would be better to factory order to lease or purchase?

Either one, but that's how your going to get the 10%+/- deal from a factory order. I typically do leases, and the Jeep is a hell of a bargain when thinking about the MSRP of the vehicle being $70K. I got a cheaper lease deal on the Jeep and being several hundred a month less than a $45K Hyundai with a $11K discount from the factory on a lease.

So if I was you, get a 4XE, get the $7,500 as a downpayment on your lease, and enjoy a fast ride and fuel efficient if you plug in all the time and enjoy.

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