Lease Buyout Process?

[fdon1]

Really curious how this works as I am ready to pull the trigger and pick up an R1S ASAP. I want to take advantage of the tax credit but I don't understand how leases work as I have never done so and there seem to be some new terms here.

It almost sounds like it may come out only a couple grand ahead going through the tax credit route rather than paying it off day 1.

Any additional help would be nice. Thanks

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[mmcool]

If you find more, pls do share with me as well

 

[Apatel323]

It’s a great idea to lease it for the 7500 credit and buy it out within a few months.

 

[srjinatl]

It’s a great idea to lease it for the 7500 credit and buy it out within a few months.

Yes - exactly what I am planning on doing - supposed to take delivery on R1S this week with a lease. Would normally have just done purchase with a loan on balance - but figured may as well take the discount from within the lease and then do it - even with the difference in refi vs new purchase interest rates I should still come out ahead.

 

[Apatel323]

Yes - exactly what I am planning on doing - supposed to take delivery on R1S this week with a lease. Would normally have just done purchase with a loan on balance - but figured may as well take the discount from within the lease and then do it - even with the difference in refi vs new purchase interest rates I should still come out ahead.

Congratulations! Please keep us posted on how the process works out to lease and buy out shortly after.

 

[MidnightRivian]

67% residual for 3 year lease with 15,000 miles.

 

[Golfer04]

67% residual for 3 year lease with 15,000 miles.

Br careful getting a lease just to pay it off quickly. You will pay sales tax (if your state has it) twice if you buy the lease out. When you take the lease out it is included and then when buy out residual it is paid again. You eat up $7500 savings fast paying the fee and sales tax a second time. Plus the interest equivalent portion of the lease payments you make. Leases only really make sense if you get a purchase price advantage to do it or are using it as a business expense.

 

[MidnightRivian]

Br careful getting a lease just to pay it off quickly. You will pay sales tax (if your state has it) twice if you buy the lease out. When you take the lease out it is included and then when buy out residual it is paid again. You eat up $7500 savings fast paying the fee and sales tax a second time. Plus the interest equivalent portion of the lease payments you make. Leases only really make sense if you get a purchase price advantage to do it or are using it as a business expense.

100% true. Everyone needs to do their research based on their state.

https://www.caranddriver.com/auto-loans/a44002991/lease-buyout-taxes/

 

[fdon1]

Alright, back with some details, and it seems like due to the rent charges it may be a bit cheaper to buy it outright. I just took the base monthly payments plus the residual value, which is roughly 2k above line a

any other ideas here?

 

[srjinatl]

100% true. Everyone needs to do their research based on their state.

https://www.caranddriver.com/auto-loans/a44002991/lease-buyout-taxes/

From what I saw on my lease in state of GA - the sales tax charged is prorata based on the depreciated amount over the lease term. It is not the full amount based on the net sales price of the vehicle. So does not appear that you pay sales tax twice - at least in terms of the full amount twice - yes you will pay sales tax on the residual value of the vehicle - just as if you bought a vehicle for that price. That is of course specific to GA - your state certainly may vary.

 

[kanl]

so when you say it may be cheaper to buy outright you mean you pay $106,300 outright vs if you kept 36 months and bought at residual for total of $8,501 + $1,915 * 36 + $65,906 = $117,426 is that right math? (though the lease has a $7,500 credit built in which I assume is included in the $8500 down/cap cost reduction?)

 

[fdon1]

I just picked mine up today so once I get the access to the payment portal for chase I will come back and update. I was told and was able to confirm with sales that the lease does not have an early payoff fee. So maybe it is only worth the lease if you have the capital to pay all upfront

 

[mmcool]

I just picked mine up today so once I get the access to the payment portal for chase I will come back and update. I was told and was able to confirm with sales that the lease does not have an early payoff fee. So maybe it is only worth the lease if you have the capital to pay all upfront

Looking forward for details

 

[kanl]

I just picked mine up today so once I get the access to the payment portal for chase I will come back and update. I was told and was able to confirm with sales that the lease does not have an early payoff fee. So maybe it is only worth the lease if you have the capital to pay all upfront

is the idea that if you pay off early you won't have to pay the full interest and rent charges? and plus one, would love to see how much it ends up being if you did buy out early and how that compares with if you bought it outright with cash from the beginning.

 

[Apatel323]

I just picked mine up today so once I get the access to the payment portal for chase I will come back and update. I was told and was able to confirm with sales that the lease does not have an early payoff fee. So maybe it is only worth the lease if you have the capital to pay all upfront

I am interested in doing the same thing . Please update us once you have payoff access.

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