Leasing versus buying a custom ordered Wrangler

[Stuboy71]

After some mulling around, I have finally decided to join the Wrangler community. I am very excited about it although now comes the hard part...deciding which model and whether to lease or buy. I have been bouncing between a Rubicon and a Sahara to the point I am now considering a Sport.
I have been working with one of the highly regarded dealers commonly mentioned on this forum and have been given some competitive pricing, however, a portion of it is contingent on financing through the dealer. I have no problem with this except it makes it difficult to compare a lease versus a purchase since they are unable to provide the either the loan interest rate or the lease values since it will vary (which I can understand). Has anybody leased a custom ordered vehicle? If so, how did you handle establishing the lease rate? Was it before you placed the order or when you went to pick it up?

I appreciate any thoughts on how to proceed.

P.S. - If you see me on the road, give me a wave. I look forward to being part of the community.

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[TXRubicon]

Lease rates or purchase rates and any incentives will be determined at time of delivery, not time of order. You may find a dealer that will tell you they'll put something in writing at order time, but it's not really up to the dealer to decide what the rates, incentives or residuals are. Depending on how long the order process takes, the rates may change substantially (up or down) from the time you order.

 

[Stuboy71]

I agree with what you are saying in regards to the lease or purchase rates are determined at the time of delivery, however, a dealer is free to mark up the interest rate. On a purchase that is no big deal as you can counter with whatever rate your bank offered and then decide whether the dealer's rate offset any discount in pricing (though this essentially negates any savings they may have offered).

The problem is when you are debating a lease since you can't really go directly to the leasing company for a comparative rate (I don't think). By the time the vehicle is ready for delivery you have already committed to taking ownership of the vehicle and paid a down payment so you don't have any ability to negotiate a better lease rate. The reason I am curious about this is that I would likely lease a Sahara but would buy a Rubicon. When I inquired about a lease, I was quoted nearly $600/mo for a 36mo / 15k lease which is much higher than my current lease which would have similar MSRP, purchase price, and residual value. I am simply curious how others approached a lease on an ordered vehicle.

 

[jerseyjoe]

When I inquired about a lease, I was quoted nearly $600/mo for a 36mo / 15k lease which is much higher than my current lease which would have similar MSRP, purchase price, and residual value. I am simply curious how others approached a lease on an ordered vehicle.

Curious about this as well - I'm in a similar boat (considering leasing a custom order). If you don't mind sharing, what is the MSRP/residual/money factor on that Sahara, and what purchase price were you able to negotiate?

 

[Stuboy71]

They quoted a lease price of $590/mo with $1,000 down for 36 months and 15k miles/yr for a Sahara. The MSRP is $49,800 and the selling price is $42,800. They did not give me the residual value or money factor which was part of my concern.
Based on some research, I estimate that the RV should be approximately 62% and the money factor around .002 (though both of these are certainly variable). These would yield a lease payment of around $490/mo. I could understand some differences between their numbers and mine but a $100 seems excessive.

 

[rickinAZ]

They quoted a lease price of $590/mo with $1,000 down for 36 months and 15k miles/yr for a Sahara. The MSRP is $49,800 and the selling price is $42,800. They did not give me the residual value or money factor which was part of my concern.
Based on some research, I estimate that the RV should be approximately 62% and the money factor around .002 (though both of these are certainly variable). These would yield a lease payment of around $490/mo. I could understand some differences between their numbers and mine but a $100 seems excessive.

It sounds like they may be shooting from the hip, while your estimate is mathematically based the three variables. Which might indicate that their price won't accurately move in lockstep with changes in money factor or residual - since the $590 doesn't appear to be based on math in the first place (or they won't tell you their assumptions).

 

[jawsATL]

If you plan on keeping it more than a couple of years I would buy it. If you dont like their interest rate and its a requirement to finance through them, just re-finance it. I got a good deal on a Sahara, but part of the requirement was to finance through them. My rate was 4.99. I refinanced through my credit union at 2.09. They are offering 0% now I believe...

IMO, a lease is an expensive convenience, especially on a car that holds its value well like a jeep. If you are paying 590 a month for 3 years after 1000 down, you would have paid the balance down to $23,560 (assuming an out the door price of 42,800 + 3,000 for TTT and at 0% interest + 1000 down). At 3.5 % interest and a $600 a month payment, after 3 years your balance would be amortized to $26,652.95. That would be your unpaid balance at a 3.5% interest rate on a 8.5 yr loan after 3 years.

Your residual should be around that number. If it is lower, lease it. If it is higher, buy it. If it is slightly higher and your OK with it lease it. Keep in mind without excessive mileage it should be worth high 20Ks low 30Ks. I would assume their residual would be close to or above 30K

My .02c

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