Removing decals with a lease

[GATORB8]

except it isn't yours to personalize, it's the leasing co's. remove the stickers all you want when you (by way of a bank) own it.

Ugh, they don’t care. They will only care at the end IF you turn it in, then they’d just charge for the decals and install, and they’ll forgive you to $500 of that if you re lease. BUT unless the market takes a shit, there is no reason to actually turn it in.

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[Cavs42]

they may be in the way, but it isn't your vehicle when it's leased. which is what this thread is about.

Which is what I said in the first half of my response.

 

[cobalt_praetorian]

Ok Dave Ramsey, did you even read my post? You're basing your analysis on an uniformed oversimplified version of how leasing works.

As I stated above, you DO NOT abandon equity with a lease, that's one fatal flaw in your analysis. That, and your 21 year old wrangler will not be worth 80% of it's original value.

You may want to do some research before preaching to any more "millennials".

SO MUCH THIS. Ugh.

As a leaser, I appreciate your thorough and well-articulated analysis... even if others haven't read it.

 

[rforbes]

Ok, I will put this Lease Thing into the most elementary description as possible.
Say you lease A Wrangler every three years, for 21 years of your life. At the end of those 21 years, you have NOTHING.
Say you buy a Wrangler every 5 years, at the end of 21 years, you will own 4 Wranglers, paid off. If you buy inexpensive Wranglers at $35,000 each, you would have spent $140,000. Say the Wrangler holds a value at 80% ? That would give you $112,000 in cash, in your pocket.
At the end of 21 years of leasing, you have nothing, not even a Wrangler. Maybe you own the decals you put on the Wrangler, that is all.
How much more simple can this be??
I try to explain leasing to millenials, but they usually can only think in the Short Term money way of thinking, and investing.

And what does 4 Wranglers get you exactly?

 

[GATORB8]

SO MUCH THIS. Ugh.

As a leaser, I appreciate your thorough and well-articulated analysis... even if others haven't read it.

Well, the market did take a shit in the last several years, lol. Actually triggered the RV protection offered by leases back in 21.

 

[DaltonGang]

And what does 4 Wranglers get you exactly?

Equity

 

[Windshieldfarmer]

Some of my best deals have been leases…cheaper than buying outright without depreciation risk…but a lessee must thoroughly understand how leases work. If a lessee doesn’t understand the implications of money factor, residual value, capitalized cost reduction, termination fee, gap coverage, and lease inception fee they should not remotely consider a lease; they will get screwed. Also high mileage drivers should never consider a lease.

I’ve never had a bad lease…but I am knowledgeable and highly selective about what I have leased. I don’t lease my Wrangler for two reasons, the lease deals have been terrible and leasing something you’re going to modify does not work…it’s prohibited by the lease.

If I am able to negotiate a great lease deal I look at it this way: for the price of a lease inception fee and potentially a termination/turn in fee, I am able to decide after three years if I want to buy the vehicle at residual value or walk away. If there’s potential equity I will purchase. If depreciation is greater than expected l, the car has been in reliable, or it’s been in an accident or damaged and repaired, I walk.

Another note…new cars in general are terrible investments. I will not borrow or lease anything unless I have the cash to purchase outright. The decision to lease/borrow for me is about preserving capital while minimizing depreciation exposure.

 

[S2k Chris]

Leasing in general is very simple. You lock in A) a specific amount of depreciation, and B) an option to purchase the vehicle at lease end at an upfront cost.

In point A), you can’t pretend you aren’t paying depreciation on a purchase. If one person pays cash for a new Wrangler for $40k, and another lease the same Wrangler for $400/mo for 36 months, and at the end the Wrangler is worth $25k, it effectively cost (round numbers) the same for each person. One person can sell for $25k and lock in a $15k loss, the other can turn their car in and have paid $15k for use of the car. Both had a Wrangler for 3 years, both paid ~$15k for the privilege.

However, if after the 3 years are up, the Wrangler is worth $35k, then the cash buyer can sell and only lose $5k. However, the lessor can buy out at their residual of $25k and turn around and sell for $35k, thus recapturing $10k of the lease payments spent.

On the flip side, if the Wrangler is worth $20k at lease end, the cash buyer is out another $5k. The lessor tosses his dealership the keys and walks away, having locked in his depreciation at $15k, and is out no extra $$. This happened with my 4xe; my residual was $38.5k, I was offered $31k from CarMax and the dealership I turned it in to was offered the chance to buy it for $35k (less than my buyout) which they did. Chrysler lost ~$3k on the transaction theoretically because the Jeep was worth less than the residual value by that amount.

Of course there are tax implications and rounding throughout my example that change things a little, but that’s the jist. Also, in 2020-2021, the car market went a little nuts and turned some things on its head; as expected this was a blip and it has mostly returned to normal, it’s rare now that you can flip a car with no financial penalty the way some many people did in 20-21.

 

[Shibadog]

Based on my lease experiences, I’m guessing yes there is a penalty. They expect the vehicle back just the way it was. Only exception is mileage and normal wear and tear.

This. You screw around and modify a leased vehicle it WILL cost you $$$

 

[GATORB8]

This. You screw around and modify a leased vehicle it WILL cost you $$$

Lol, in OP's case it would cost him whatever the decals he took off cost to replace and 10 minutes to put the decals on.

 

[jmill012]

Just came here to say, I hope people don't take financial advice from this forum

Would love to see the look on any FA's face when you tell them you bought 4 wranglers as part of your investment portfolio for their "equity". Oh to be a fly on the wall....

 

[GATORB8]

Just came here to say, I hope people don't take financial advice from this forum

Would love to see the look on any FA's face when you tell them you bought 4 wranglers as part of your investment portfolio for their "equity". Oh to be a fly on the wall....

Look honey, we're all set for retirement:

 

[S2k Chris]

This. You screw around and modify a leased vehicle it WILL cost you $$$

Lol, in OP's case it would cost him whatever the decals he took off cost to replace and 10 minutes to put the decals on.

Yeah, it’s not “can’t modify a leased vehicle” it’s “can’t modify a leased vehicle without returning it to original condition.”. I modified, lightly, both of my previous Jeeps, and I just had to put them back how they were when I turned them in. The biggest was I cut a trim piece on the front bumper to mount aux lights; I bought a replacement piece and just installed that when I was done with it. For a couple others I was a little more sneaky; I cut a small hole in a trunk trim piece for a switch; a set of trim piece plugs for like $7 off Amazon solved that.

 

[JINO]

You could always keep the original decals in a box and apply them when you return..

 

[jmill012]

Plug in whatever percentage of equity you want, when you own and sell your Wrangler. Now, you keep implying there is equity in a leased vehicle??? I call Bullsh#t on that. At the end of your leases, ask them to cut you a check for the "Equity" you have built up. See how fast they laugh at that request.
I think you are confusing "NonRefundable Credit" with true "Equity". I
the Credit on a lease is how they sucker the financially inept into a leasing trap. Like I mentioned, leases are great, for businesses, who are able to write them off.
BTW, I've never read, or subscribed to "Dave Ramsey". I just use common sense, passed on to me, by my Grandparents, Parents, Aunts and Uncles, who are all very successful, finantially. They started with nothing, and ended up with millions, almost every one of them.
Isn't only the millennials, who need financial lecturing, but those of all ages. Unfortunately, many cannot grasp basic rules of being fiscally resposible, and reason their way into irresistible financial decisions. "I want it now", and "I want what the neighbor has", mentality.

I have "traded in" many leases and received a check for the equity from the dealer. You only loose your equity if you "turn it in". Not to mention in Maryland, you get a tax credit if you "trade" it in on your next purchase. We don't pay monthly lease tax and the tax on the new vehicle is offset by the value of the vehicle being traded. If I were to "turn" it in, I lose the tax savings. I won't bore you with the "math" but depending on the residual, incentives, and money factor, a lease could be the best way to go financially. With every car I purchase I compute whether leasing or buying is the better option on that particular vehicle. The irresponsible financial advice is to just say "leasing is for dummies".

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