Pen-fed Payment saver any good for JL for those who usually lease?

nypharm

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I usually lease cars but Wrangler seems to be better option to purchase. However I prefer to switch cars out every 2-3 years. A good alternative to lease is Pen-Fed payment saver. It's basically a balloon purchase. Anyone can recommend this program for the new JL? I am in the market to replace my Bmw by April. Thanks.





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guarnibl

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I have the payment saver option on my Porsche 981 Spyder because GT cars hold value extremely well, and the interest rate was stupid low when I did it (and PCNA rate was terrible). It's been great. After the 3 years my Porsche will be worth ~$80k and my buy out will be high 30's (which I'll just balloon pay or refinance depending on rates). I'm about 20 months in at this point.

I'm not sure PenFed (open ended lease) will be better than leasing a JL from Chrysler (closed ended lease) for 24 months (I'd stick to either 24 or 36). You can always exit the lease with Chrysler, and I'd imagine you'd have some decent equity if you bought it right and didn't choose too many options (which don't hold value as well).

Can't speak to how NY treats leases though either from a tax perspective, so there may be advantages to buying vs leasing there.

TLDR; find the MF rates from Chrylser and residuals, and compare the interest rate from PenFed and the residual they give you, and consider tax implications of the full transaction. From there make a decision. Spreadsheet. Pure and simple. If you're asking about the service experience -- PenFed has been AMAZING.
 

PowerGuy

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I’m not sure they will do payment saver on the wrangler. It’s a good option if they will, just hav to be careful on what they expect the value to be at the end of the loan, but you can always refinance it.
 

guarnibl

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I’m not sure they will do payment saver on the wrangler. It’s a good option if they will, just hav to be careful on what they expect the value to be at the end of the loan, but you can always refinance it.
They will. Or they were willing to when I called on it six months ago. My guess is their residual will be more conservative than Chrysler though. My guess is best MF from Chrysler will be around 5.5%. PenFed will be 3%. It would likely be a toss up... more risk on the PenFed side since it is open ended and it's up to you to get rid of the vehicle.

Chrysler lease rates (Jan '19).
----------------------------------
Standard MF (which appears to be .00225 this month) and …
2 door / 4 door residuals
Sport - 63% / 72%
Sahara - NA / 65%
Rubicon - 58% / 64%
 
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nypharm

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They will. Or they were willing to when I called on it six months ago. My guess is their residual will be more conservative than Chrysler though. My guess is best MF from Chrysler will be around 5.5%. PenFed will be 3%. It would likely be a toss up... more risk on the PenFed side since it is open ended and it's up to you to get rid of the vehicle.

Chrysler lease rates (Jan '19).
----------------------------------
Standard MF (which appears to be .00225 this month) and …
2 door / 4 door residuals
Sport - 63% / 72%
Sahara - NA / 65%
Rubicon - 58% / 64%
0.00225 money factor x 2400 brings it to 5.4% on Chrysler lease. The residual on pen-fed is also 64%, however I am not sure about money factor.

Do you see these cars holding over 65% value in next 3 years??
 

PowerGuy

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0.00225 money factor x 2400 brings it to 5.4% on Chrysler lease. The residual on pen-fed is also 64%, however I am not sure about money factor.

Do you see these cars holding over 65% value in next 3 years??
PenFed has no money factor. The interest rate for 36 months is 3.74 (depending on credit rating). It’s a good way to get lower payments, but you run the risk of being upside down if the value at the end is less than projected.
 

ThirtyOne

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Depending on how you look at it these balloon loans are either the best of both worlds or the worst.

I think the usual guidance applies - do the math and decide for yourself.

If you want to share specifics I can look at it closer.
 

LeaN69

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I'm not familiar with balloon payment loans, first time i've seen it is when I was considering S1000RR years ago and BMW financial services advertised this type of loan.

Isn't deferred interest a problem? Since you're paying down less principal first 3 years??
 

guarnibl

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I'm not familiar with balloon payment loans, first time i've seen it is when I was considering S1000RR years ago and BMW financial services advertised this type of loan.

Isn't deferred interest a problem? Since you're paying down less principal first 3 years??
Yes, but that is no different from a lease I believe. A lease involves paying the depreciation and the finance charge, which I thought was based off the overall outstanding amount of the vehicle, not the lease balance. But could be wrong.

BMW advertises it as some states force you to pay the entire tax of the vehicle up front even if you are leasing, such as Texas.
 
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nypharm

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Yes, but that is no different from a lease I believe. A lease involves paying the depreciation and the finance charge, which I thought was based off the overall outstanding amount of the vehicle, not the lease balance. But could be wrong.

BMW advertises it as some states force you to pay the entire tax of the vehicle up front even if you are leasing, such as Texas.
The pen fed saver payment calculator estimates a rubicon unlimited with 53k msrp to be worth 34k in change after 3 years. That is what Chrsyler is estimating based on 64% residual with about 10k lease. However the payment difference is hundreds per month between a lease and a balloon payment. My question is, if I do go forward with the pen fed route. What are the odds that a Rubicon will be worth 34k after 3 years and how hard is it to refinance the remainder few months before term is up? thanks for help.
 

guarnibl

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The pen fed saver payment calculator estimates a rubicon unlimited with 53k msrp to be worth 34k in change after 3 years. That is what Chrsyler is estimating based on 64% residual with about 10k lease. However the payment difference is hundreds per month between a lease and a balloon payment. My question is, if I do go forward with the pen fed route. What are the odds that a Rubicon will be worth 34k after 3 years and how hard is it to refinance the remainder few months before term is up? thanks for help.
Easy to refinance. Done that many times. No crystall ball though. Also trade value is less than retail which is what the residual is calculated on.
 

cbrenthus

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I'm liking this penfed payment saver, and I'm guessing that like any loan, you can pay it off at anytime. However, my concern with this is that you're not paying the balance down much, so if you decide to sell or trade in early you could easily be under water.
 

guarnibl

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I'm liking this penfed payment saver, and I'm guessing that like any loan, you can pay it off at anytime. However, my concern with this is that you're not paying the balance down much, so if you decide to sell or trade in early you could easily be under water.
Same risk as a lease really.
 
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nypharm

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Can you pay off the loan early? Only risk is if you have an accident vs a lease. Where you do not care about accidents, in terms of resale.
 

guarnibl

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Can you pay off the loan early? Only risk is if you have an accident vs a lease. Where you do not care about accidents, in terms of resale.
Yes.
 

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