Leasing - help needed

[TheRaven]

Thank you,

At Edmunds I could find only the RV, still can't get the latest MF (for Nov someone told me to use 0.00205). I tried calling Chrysler Capital and ask them directly, I told them I have excelent credit (over 800), but some of the people there are either not that smart, either they really don't know it (which I doubt). I'm same like you, know the math, just need the right inputs.

Can you take a look at the attached and let me know if the math flows right? thanks

It's correct by my calculator. However I think you can do better with CCAP. Last month's CCAP MF's were as follows:

36M - .00205 (acq fee waived)
42M - .00184 ($595 acq fee)
48M - .00170 ($595 acq fee)

For the 36 month example, there is no acq fee with CCAP so you could either just have less DAS money or put that $595 in as down money. With the $595 down, you'd be at $383 with $1801 DAS. Or you could keep the $595 and be at $402 with $1187 DAS. Both scenarios are much better than the USBank scenario and most importantly, you wouldn't have to pay a-holes for the next 3 years.

Obviously this depends on the MF being about the same as November, but it should be.

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[ThirtyOne]

I understand leasing pretty well (also have my own model ) - curious for insights on selling before the lease ends. Is it best to wait until the lease ends or to buy it out before the lease ends. Haven’t done that before so interested in how you calculate each?

also, being in CA a big advantage of leasing is not paying all the sales tax, and not paying it up front. Any insight into what happens with sales tax in either of the buy out scenarios?

I avoid going into the dealer for the negotiation, but a serious dealer will send you a screen shot (or a photo if they say they are not allowed to) of their purchase/financing screen that will clearly show all of the inputs you need to see - MF, detailed fees etc. When doing that I ask for the “buy rate“ on the MF - they know what you mean. Get a couple of them and match up to what the Edmunds forum is telling you and you have all the info you need to make an informed decision.

oh - and never put money down!

The short answer is you have to do the math. Presumably the payment on your lease is as low as it will get, so it really depends on what you are moving to next.

 

[calin]

It's correct by my calculator. However I think you can do better with CCAP. Last month's CCAP MF's were as follows:

36M - .00205 (acq fee waived)
42M - .00184 ($595 acq fee)
48M - .00170 ($595 acq fee)

For the 36 month example, there is no acq fee with CCAP so you could either just have less DAS money or put that $595 in as down money. With the $595 down, you'd be at $383 with $1801 DAS. Or you could keep the $595 and be at $402 with $1187 DAS. Both scenarios are much better than the USBank scenario and most importantly, you wouldn't have to pay a-holes for the next 3 years.

Obviously this depends on the MF being about the same as November, but it should be.

Thanks again, MF is the same, I just received some quotes

 

[Warz2k4]

If you plan on leasing, don't plan on adding any aftermarket things, unless you plan on returning it back to stock.

Hopefully nothing breaks if you go off-roading.

 

[calin]

It's correct by my calculator. However I think you can do better with CCAP. Last month's CCAP MF's were as follows:

36M - .00205 (acq fee waived)
42M - .00184 ($595 acq fee)
48M - .00170 ($595 acq fee)

For the 36 month example, there is no acq fee with CCAP so you could either just have less DAS money or put that $595 in as down money. With the $595 down, you'd be at $383 with $1801 DAS. Or you could keep the $595 and be at $402 with $1187 DAS. Both scenarios are much better than the USBank scenario and most importantly, you wouldn't have to pay a-holes for the next 3 years.

Obviously this depends on the MF being about the same as November, but it should be.

They got really upset when I gave them the CCAP RV and MF, and they don't want to honor the price....they told me that if I want the Chrysler rates they will have to increase the price of the vehicle, in order to do that....they will have to reduce the discount below invoice drastically.......which makes it almost not worth it vs what I can get around here just using the FCA affiliates discount, which is 1% below invoice

They lure you in with this "large" discount below invoice, and they make all their money on the financing side......CCAP is now ~5% APR, which super high given the current interests which are basically 0%......Ally and US Bank figured out a way to incentives dealers to push their rates! and dealers also make money on the high volume of cars

 

[dalema]

This is an important distinction to make - like you, I also live in a tax-on-payment state. In tax-on-value states leasing kinda sucks. But for us, we are only taxed on payments that are made. So if you lease for three years and then buy out the vehicle, you are still paying tax on the entire vehicle. You pay tax on each payment, then you pay tax on the buyout. The only time you can avoid it is when you sell out the lease to a dealer. They don't pay sales tax. So then you would have only paid tax on the payments you made.

Thanks. Will have to research a bit more. I remember once reading that if you resell it within 10 days in CA you don’t pay the sales tax on the whole vehicle.

 

[TheRaven]

They got really upset when I gave them the CCAP RV and MF, and they don't want to honor the price....they told me that if I want the Chrysler rates they will have to increase the price of the vehicle, in order to do that....they will have to reduce the discount below invoice drastically.......which makes it almost not worth it vs what I can get around here just using the FCA affiliates discount, which is 1% below invoice

They lure you in with this "large" discount below invoice, and they make all their money on the financing side......CCAP is now ~5% APR, which super high given the current interests which are basically 0%......Ally and US Bank figured out a way to incentives dealers to push their rates! and dealers also make money on the high volume of cars

The dealer I bought from gave me a choice: 7% below invoice if I finance with them, 5% below invoice if I bring my own or lease at the buy-rate. I took the 5% and buy-rate option because it was cheaper than the 7% option and also cheaper than any of the other 18 dealers I spoke with. That said, everyone's situation is different.

Thanks. Will have to research a bit more. I remember once reading that if you resell it within 10 days in CA you don’t pay the sales tax on the whole vehicle.

Yes I believe that is correct. In PA we don't have that.

 

[calin]

The dealer I bought from gave me a choice: 7% below invoice if I finance with them, 5% below invoice if I bring my own or lease at the buy-rate. I took the 5% and buy-rate option because it was cheaper than the 7% option and also cheaper than any of the other 18 dealers I spoke with. That said, everyone's situation is different.



Yes I believe that is correct. In PA we don't have that.

Thanks Raven, so you think 5% below the invoice is fair if I can get the CCAP rates?

 

[conFUcius]

Obviously, the dollars will what drives the decision but two other questions (apologies if they were mentioned already but I only skimmed the first few posts) are:

1. Do you plan to modify the vehicle? If so, this could significantly limit your capability to straight walk away from the lease at the end because it is not stock (you could of course trade it to the dealer vs. walk away). Something to consider.
2. Do you need the flexibility of options at lease end? I leased two Grand Cherokees before landing on my current JLUR which I intend to keep. The lease terms were great for me on the GCs because I was not sure I wanted to keep it and since I ultimately did not, much better to have driven two new vehicles with no worries on maintenance or being out of warranty in a span of five years.

Since your credit score is great and you could likely secure a low finance rate (even at a longer term), especially if you plan to keep and modify the vehicle, you may be better off purchasing.

Good luck with the decision!

 

[calin]

Obviously, the dollars will what drives the decision but two other questions (apologies if they were mentioned already but I only skimmed the first few posts) are:

1. Do you plan to modify the vehicle? If so, this could significantly limit your capability to straight walk away from the lease at the end because it is not stock (you could of course trade it to the dealer vs. walk away). Something to consider.
2. Do you need the flexibility of options at lease end? I leased two Grand Cherokees before landing on my current JLUR which I intend to keep. The lease terms were great for me on the GCs because I was not sure I wanted to keep it and since I ultimately did not, much better to have driven two new vehicles with no worries on maintenance or being out of warranty in a span of five years.

Since your credit score is great and you could likely secure a low finance rate (even at a longer term), especially if you plan to keep and modify the vehicle, you may be better off purchasing.

Good luck with the decision!

I never had a Wrangler, and I don't know if I would like it or not....I'm willing to try though....so this is the thinking, I'll get it in lease so I have the option to return it if I don't like it (and I'll save a tons in taxes)....If after few months I see I like it, and decide to keep it long term, I'll just buy the lease out at any time and refinance it long term, or wait until the lease end and buy than, there are options

Another thing what makes me lease all my cars, in my area mechanic work is super expensive, whatever breaks is like $500 min!

 

[TheRaven]

Thanks Raven, so you think 5% below the invoice is fair if I can get the CCAP rates?

Well, can you get a better price anywhere else? I couldn't. For me there was no way to get what I wanted cheaper, so I signed.

Obviously, the dollars will what drives the decision but two other questions (apologies if they were mentioned already but I only skimmed the first few posts) are:

1. Do you plan to modify the vehicle? If so, this could significantly limit your capability to straight walk away from the lease at the end because it is not stock (you could of course trade it to the dealer vs. walk away). Something to consider.
2. Do you need the flexibility of options at lease end? I leased two Grand Cherokees before landing on my current JLUR which I intend to keep. The lease terms were great for me on the GCs because I was not sure I wanted to keep it and since I ultimately did not, much better to have driven two new vehicles with no worries on maintenance or being out of warranty in a span of five years.

Since your credit score is great and you could likely secure a low finance rate (even at a longer term), especially if you plan to keep and modify the vehicle, you may be better off purchasing.

Good luck with the decision!

It is a bad idea to lease a Wrangler with the intention of just turning it in at the end of the lease. If you lease a Wrangler, you should be buying it out at the end of the lease (or earlier if you need), and either keep it or sell it. If you turn in a Wrangler you are forfeiting thousands of dollars in equity.

Assuming you follow that advice, there is no concern about modifications or off-roading. You can essentially treat your Wrangler as if you own it (for the most part obviously don't be stupid about it).

 

[conFUcius]

It is a bad idea to lease a Wrangler with the intention of just turning it in at the end of the lease. If you lease a Wrangler, you should be buying it out at the end of the lease (or earlier if you need), and either keep it or sell it. If you turn in a Wrangler you are forfeiting thousands of dollars in equity.

Assuming you follow that advice, there is no concern about modifications or off-roading. You can essentially treat your Wrangler as if you own it (for the most part obviously don't be stupid about it).

Agree that it’s dumb to walk away from it at the end and, you are correct, any mods or beating it up won’t matter if you keep it. The problem is you will pay a lot more leasing first, then financing the residual at the end of the lease (assuming one does not straight purchase the residual at the end of the lease).

 

[conFUcius]

I never had a Wrangler, and I don't know if I would like it or not....I'm willing to try though....so this is the thinking, I'll get it in lease so I have the option to return it if I don't like it (and I'll save a tons in taxes)....If after few months I see I like it, and decide to keep it long term, I'll just buy the lease out at any time and refinance it long term, or wait until the lease end and buy than, there are options

Another thing what makes me lease all my cars, in my area mechanic work is super expensive, whatever breaks is like $500 min!

That sounds like a solid plan to me; if you like it, definitely go ahead and finance it right away for the purchase. Just be careful of early buyout/exit fees.

Another option you could look into is just renting a Jeep from National/Budget/etc. first. While, on face value, it might look more expensive, could be better long term vs. exiting a lease early.

 

[GtX]

Nah, don't feel bad. There is a negative stigma around leasing that has existed for decades. You are probably in the majority for still thinking that way. Fact is that if you are good with math and know what you are doing going in, you can do even better with leasing than with buying, and come out having experienced NONE of the negatives. But if you aren't smart about it, you can get into trouble quickly. But really, standard financing is no different. People in general just have more experience with standard financing because it's something we use all over the place, not just for vehicles.

Tsk-tsk. You assume I use standard financing products and my dislike for leasing is either through comparison of standard financing to leasing or some bad past experience with a lease. Neither is true. I'm good enough at math and finance to know that neither of these products are very good.

 

[guarnibl]

Please don’t lease a Jeep. You’ll be making payments for a set of wheels you’ll never own. Dealers love leases cause THEY make a ton of $$ on them. Buy a Jeep, high resale value means it will be worth a good bitwhen you sell or trade it down the road..

This may have been your experience but it's not everyone's experience. It all comes down to the buyers use case/situation. You could make the same statement about buying. I could give you scenarios that benefit both.

I took the risk that I would be ahead turning the vehicle in vs buying it compared to what I could buy on the market at the time. I primarily went this route because the amount of options I added as compared to MSRP was very high, thus it's more likely to end up in my favor -- and because I know I'd get a new one when the refresh hit. My lease payment is also 8/10ths of 1% of the MSRP, so it hits that marker too.

Some manufacturers inflate residuals. BMW is notorious for this. FCA seemed like they were going that route this time which is why I leased. We will be buying my wife's 2 door though given she will keep it longer and the residuals are lower and money factor is higher.

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