What's wrong with these lease numbers...

[Scoobiedude]

I can buy the vehicle outright for $5500 difference... but the lease contract doesn't look right if I decide to lease it. Something is off and even the dealership is struggling to figure it out.

Here is buying it:

Here is leasing it:

And here is the lease contract:

It's not adding up. If I'm leasing it and I have reduced the lease to $55,165 with a residual of $50,007 then my one time lease payment should only be $5,157.25. Then I can keep it 3 years and payoff the lease at $50,007. Or am I just grossly misunderstanding the lease?

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[j2.pictures]

Not sure if I missed it, or scimmed it. Did you factor in that all leases (including one pays) have a money factor?

 

[morph860]

I’m pretty sure 6B should have the $43k number from Section 5 in it.

 

[ForgottenTaco]

What’s that $239 millennium package?

 

[GtX]

This is why I don't lease and prefer to write a check or show up with a sack of cash. It's a simple this for that exchange and I never have to deal with them again on this subject.

Good luck.

 

[coupedncal]

You only have $13,630 equity from your trade-in. They are giving you $70K but you have to deduct the amount you still owe.

Digging into it further, I noticed the rent charge alone is $15,740. What in the God's name are they charging you for money factor!!

 

[Flying Dave]

Agree with others, 6B should have the reduction. You can't really reduce the lease below the residual or at least in makes things wonky. Even if you reduce the lease to the exact residual you will still have interest(money factor) on that residual for 3 years. I'd say use the discount, tax credit and equity in trade as total down (cost cap reduction). Let them figure the 35 additional payments from there, then add the residual to your total cost. Taxes can change things a bit, and vary by state. The 7,500 credit should be a better deal even when factoring back in the lease fees. If it went 3 years, you would be holding onto your $50k for that time frame, so figure interest on that.

I believe the early termination fees are if you return the vehicle early. Basically you would want to "pay-off" the lease which if you did early should save you some interest. If you start with equity plus payments plus residual, that should be total cost over 3 years.

Another way to pay more upfront would be to add mileage to your lease, that would reduce residual and proportionately less interest on that residual. In all these cases you want to plan on buying out the lease, never give back the vehicle.

 

[GR8ESC]

In the purchase transaction, you still need to pay them $61,870 for the vehicle. From that, you will get an EV rebate which is a credit on your tax returns which further reduces your net purchase price. If you don't owe that much, you receive less credit, so be careful when looking at the purchase. If you finance that balance, you will have interest costs for the time period of the loan. On the lease they are using a higher purchase price (Cap Cost) to figure the total payment(s) due. Then they give you the EV credit and the trade in credit against the cash due. They are not giving you the $2,421.35 discount against your cap cost on the lease. They are also charging you "interest" for a full three years (6F), you are just prepaying that in a single payment. Net on the lease you are out $22,372.04 in cash for three years of use (5B3). Compare that to the cost of buying the Jeep at the lower price, less the EV Credit, plus your interest cost, less the value of the Jeep you own at the end of that same period. Hope this helps, and doesn't cause greater confusion.

 

[GMONEY]

If the dealer is having problems figuring it out and/or explaining it to you so you understand do you really want to do business with them? That is literally their job.

 

[Scoobiedude]

Not sure if I missed it, or scimmed it. Did you factor in that all leases (including one pays) have a money factor?

As I understand it... the rental charges will be prorated if I pay it off early, but they are in the contract.

I’m pretty sure 6B should have the $43k number from Section 5 in it.

That means 6C would be $32,494.11 ... that would create a negative in 6E... not sure how that would work.

What’s that $239 millennium package?

I do not know... probably some fluff they add, although I've been meaning to ask them out of curiosity myself. Either way, I needed to be at a certain figure, and they got there, so it doesn't really matter in the end.

This is why I don't lease and prefer to write a check or show up with a sack of cash. It's a simple this for that exchange and I never have to deal with them again on this subject.

Good luck.

I know... that's about what I'm ready do to, but I didn't want to pass up 4-5K in saving if it's possible.

Digging into it further, I noticed the rent charge alone is $15,740. What in the God's name are they charging you for money factor!!

That's high... and rent is on the MSRP, not what you are leasing, from what I understand. However, if I pay it off in 30 days I will only be charged one months rent, not the full figure.

Agree with others, 6B should have the reduction. You can't really reduce the lease below the residual or at least in makes things wonky. Even if you reduce the lease to the exact residual you will still have interest(money factor) on that residual for 3 years. I'd say use the discount, tax credit and equity in trade as total down (cost cap reduction). Let them figure the 35 additional payments from there, then add the residual to your total cost. Taxes can change things a bit, and vary by state. The 7,500 credit should be a better deal even when factoring back in the lease fees. If it went 3 years, you would be holding onto your $50k for that time frame, so figure interest on that.

I believe the early termination fees are if you return the vehicle early. Basically you would want to "pay-off" the lease which if you did early should save you some interest. If you start with equity plus payments plus residual, that should be total cost over 3 years.

Another way to pay more upfront would be to add mileage to your lease, that would reduce residual and proportionately less interest on that residual. In all these cases you want to plan on buying out the lease, never give back the vehicle.

Good points... and just need to figure out all the various scenarios to come out with the best deal.

In the purchase transaction, you still need to pay them $61,870 for the vehicle. From that, you will get an EV rebate which is a credit on your tax returns which further reduces your net purchase price. If you don't owe that much, you receive less credit, so be careful when looking at the purchase. If you finance that balance, you will have interest costs for the time period of the loan. On the lease they are using a higher purchase price (Cap Cost) to figure the total payment(s) due. Then they give you the EV credit and the trade in credit against the cash due. They are not giving you the $2,421.35 discount against your cap cost on the lease. They are also charging you "interest" for a full three years (6F), you are just prepaying that in a single payment. Net on the lease you are out $22,372.04 in cash for three years of use (5B3). Compare that to the cost of buying the Jeep at the lower price, less the EV Credit, plus your interest cost, less the value of the Jeep you own at the end of that same period. Hope this helps, and doesn't cause greater confusion.

I don't qualify for the tax credit. They changed the income limit in 2023 to a max of $300K... anything over that there is no tax credit. However, I can get it on a lease because it's passed on from the dealer to me.

I'm looking at buying it outright either way. Pay the 61K cash or buyout the lease right after I do the lease. Both are really cash deals, but going thru the lease motions to get a better deal with the $7500 rebate.

If the dealer is having problems figuring it out and/or explaining it to you so you understand do you really want to do business with them? That is literally their job.

I know... but they have the vehicle my wife wants... and there are literally very few out there. And supposedly, this color cannot be ordered right now, not to mention we don't want to wait for one to be built anyway. The dealer admits they don't do that many leases, and I can see why, so I'm trying to figure it out with them.

 

[Deleted member 59498]

Hurts my head a bit.

 

[Flying Dave]

Now I'm questioning the residual. It seems high. My Sahara 4xe was 54%-55% of factory MSRP at 64,240. Those don't change that much, this is pushing 65%-66%. Assuming 10,000 miles/year?

Another option, Jeep.com or dealers website should have payment options when listing vehicles. Click on that and see what comes up. It usually defaults to 10% down. Leave your trade aside for the moment and see what payment shows up. Sometimes the fine print shows the residual, sometimes you have to get that from the dealer. Again add up down, 35 more monthly payments and the residual. That will be max and should be less if paid off early. If the payment calculator doesn't include tax, title, license-say you'll pay that separately(or add the same amount to down).

Is the MSRP the actual factory MSRP or is there additional markup or dealer installed options. Not sure I could add another $10k in options to mine.

 

[Flying Dave]

All in on the lease with trade you're paying 72,380, cash part of down and residual. Unless you can get something stating the rent charges will be removed if paid off immediately, that's not a deal. That's over $10k more than cash, granted you are keeping the $50k residual for 3 years in this scenario. Seems like between this is the one and dealer, cash is better. Put a relative on the title that can use tax credit(one you trust).

 

[azjl#3]

What’s that $239 millennium package?

Night at the hotel?

 

[azjl#3]

Hurts my head a bit.

F=0

solved it. I think.

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