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I'll start out buy saying I don't mind the monthly payment that "never end" as my last car I had a 7yr finance on. I'm looking to get a Wrangler Unlimited as my next vehicle. Leasing could be as much as $250 cheaper per month than financing.

If I do lease to buy, should I care about what mileage I set the lease at. I drive about 14k a year, so only option would be 15k if I even thought about trading it in at the end of the lease. Sport Residual values are at 72% while Sahara/Rubicons are at 62%. Lower mileage per year would lower my monthly payments but raise the buy out price at the end. If I go into a lease knowing I'm going to buy it out, would it make more sense to get the lowest mileage package or the highest?

A friend of mine got a nice deal on her lease,
75th Anniversary 4dr fully loaded,
MSRP $42510
price agreed $40010,
Adjusted capitalized coat $39492
$392.10 per month 42mths, 12k/yr
RV $26781
***even in today's market good luck finding a 4 year old Sahara at $27000.

FYI, I am in top tier credit so my MF would be lower than average. And no need to say "DON'T LEASE, BAD IDEA". I plan on investing the extra money I am saving instead of putting it into financing.
 

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Here are my $.02 on the subject...

I have thought about this in the past and what I determined to be the big killer is that after the 3 or 4 years of leasing, you still have to buy the vehicle. That being said, unless you have enough money to cover the residual value, you will get a loan. That loan could be for 3, 4, or 5+ years. Add it all up and you have been paying for the same vehicle for possibly 8+ years. When you look at the total payments made over that time period it far exceeds what you would have paid to buy it in the first place.

Secondly, if you plan on modifying your new Jeep, be very careful because in the lease agreement there is usually language to the effect that you need to get the owners permission (the owner being FCA since a lease is really a long term rental agreement).

Now to answer your question. If you know for sure you are going to buy it out at the end, do the math. Figure out how much the total investment would be for the lower and higher mileage options as the down payment may be different for each also. Ultimately it is your choice entirely, but I get the feeling that when people ask these questions on forums like this it is because they are either looking to validate their train of thought or are unsure of what they want to do.

Just my thoughts on it, like em, hate em, or ignore em. Not judging or talking down to anyone that wants to go that route, just me feelings on the matter.


Sent from my iPad using Tapatalk
 

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One thing missing from your friend's lease deal is her down payment. What did she put down??

If you decided to lease vs. buy, that is your decision. Sounds like you have figured out what you want to do. Your question was about annual mileage allowance, and you identified lower monthly payments vs higher residual value for a lower mileage lease.

Pick the payment you want and hold on.
 

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This isn't a Jeep question it's a financial question. Bust out excel, calculate it out, use reasonable investment returns and also account for inflation then you'll have the answer.
 

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If you are indeed intending to lease with an intent to buy: While the payment is lower initially during a lease cycle, the overall finance charges are often double to triple of that compared to a regular 60-72 month loan. You'll end up paying an extra couple years just to pay the offset increase in financing.

If your residual value at the end of your lease is $27000 as the example you mentioned above, then refinancing the Jeep at the end of a 4 year lease with decent credit at say 3-4% interest will result in a payment of $485-$500 for another 60 months/5 years.

$392 x 42 months = $18816

$27000 x 60 months at 3.5% interest = $491 payment

$491 x 60 = $29460

$29460 + $18818 = $48276 amount paid for Jeep + whatever the initial down payment was which is usually several thousand more.
Let's say your friend put down a $2000 down payment, that's $50276 total payment.

vs. a traditional loan of $40,000 x 72 months at 2.5% = $599 mo. = $43,117 total purchase price with NO down payment.

That's a difference of $7159 in finance charges in those two examples.

Much better off buying imho.
 

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I've looked and thought of it the other way.

lease with the intent to sell at the end of the lease. (buy it back and then sell it etc)
 

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And no need to say "DON'T LEASE, BAD IDEA".
Leasing a wrangler is a great idea! :D

Seriously though, what is the point of your thread?

That we comment on your friend's lease numbers?

Can't really give you an opinion until you show us YOUR numbers....
 

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I leased with the intent to buy at the end and I'm still happy with my decision. I've always owned a truck, and this gave me a way to see if I really like driving a jeep or just the idea of it. Is it the most financially smart decision? obviously from the arguments above, no, but I was ok with that walking in. A little over a year in and I've realized I'm not using the jeep for what I thought I would, and probably should've just kept my truck. Will that change before the lease is up? Only time will tell.
 

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The OP has already decided what he's going to do. This thread is about nothing more than trying to quantify a bad decision. Lease mileage isn't going to matter in the end since that's a pay me now or pay me later ordeal. He states he doesn't mind never ending payments and that is a good thing because he's in for a long life of them with his present thinking.

BTW unless he's planning on investing the saved back money in cocaine or some such he's not going to come out ahead there either.
 

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In principle, leasing a vehicle makes a lot of sense for some drivers (low miles/yr, meticulous care, a vehicle with steep depreciation, and a good money factor).

I considered leasing our JK but it failed two of these criteria -- depreciation is really good on a JK, and the FCA money factor I was quoted (last October) was essentially a ~7.5% APR, and that's with 800+ FICO scores. We ended up buying, with a 1.99% APR that our sales manager lined up for us.
 
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