Lease vs buy R1T

[abct]

I've selected my R1T from inentory and I'm deciding between lease or purchase. I've leased last 5 vehicles and was excited to switch to finally owning due to constant hidden fees, worrying about wear and tear and going over on mileage. I'm only considering leasing now to try to benefit from $7500 EV incentive that only applies to leasing (my income disqualifies me from $3500 credit for purchase).
-was also planning to purchase because I will likely go over 15,000 miles per year, (up to 25,000 miles per year) unless my job changes (40% chance)
-MSRP is $91,000 for my R1T
-I had put aside the $90kl for this purchase over the last 2 years, so I have the capacity to pay in full without financing (though I am not flush with cash and I've never before purchased a car because I never had $50-$80k available at one time for a purchase)
-I was considering leasing for 3 years, then buying out at end of lease term to take advantage of the $7500 credit
-when I plung in #s for 36 payments + downpayment, and add the anticipated residual value at the end of 3 years of $53,572 (given to me by my guide), I seem to be paying the same total amount. I'm assuming the interest payments during the lease are offsetting the $7500 credit
-total amount paid of 36 months does not move substantialiy if I pay 5k downpayment vs 25k downpaymenbt.
-I live in CT and they don't lease in CT, but they tell me I am able to lease through Florida or Mass if I can give them a volid address in those states, even if I don't live there and even if it doesn't match the address on my valid CT license.
-I am just not seeing the benefit of leasing, or am I missing something?
-I'm not a numbers/finance guy, so please keep it simple in responses

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[jemkewl]

Didn't see opportunity cost factored in...
If lease to buy is same outlay as buying upfront, but you can keep 60k+ cash with leasing... Put that 60k+ in 5.5% 13 week tbills and keep rolling over during the lease duration, what's the math then?

 

[runwithscissors]

I wish I leased mine but the program wasn't available last year. The lease is a much less risky way to get into a Rivian especially a Quad with a high residual. I personally wouldn't pay cash for it if I were you knowing it's a large chunk of what you saved. In 3 years the battery/tech will be so much better than what we have today.

 

[sphereobject]

Didn't see opportunity cost factored in...
If lease to buy is same outlay as buying upfront, but you can keep 60k+ cash with leasing... Put that 60k+ in 5.5% 13 week tbills and keep rolling over during the lease duration, what's the math then?

Not financial advice, but instead of t-bills consider BOXX, which gives you long term capital gain treatment to 3 month t-bill exposure via ETF.

 

[jemkewl]

Not financial advice, but instead of t-bills consider BOXX, which gives you long term capital gain treatment to 3 month t-bill exposure via ETF.

Not financial advice either - etf VS tbills tax obligations should be considered.

 

[sphereobject]

Not financial advice either - etf VS tbills tax obligations should be considered.

Not financial advice - yes, if you live in anti-freedom state with life sucking income tax.

 

[jjswan33]

Regarding leasing then buying outright. The main question I still want the answer to is what the fine print on the lease contract says about buying out the lease early (not what some random guide or CS agent told someone). If you can pay off after a few months and forego the remaining rent payment then that is probably cheaper, long term.

Assuming your config isn't a QM? That's the other wild card as most folks leasing QM are seeing rent payments that are basically 0, in that case leasing is likely cheaper in all cases.

 

[jemkewl]

Regarding leasing then buying outright. The main question I still want the answer to is what the fine print on the lease contract says about buying out the lease early (not what some random guide or CS agent told someone). If you can pay off after a few months and forego the remaining rent payment then that is probably cheaper, long term.

Assuming your config isn't a QM? That's the other wild card as most folks leasing QM are seeing rent payments that are basically 0, in that case leasing is likely cheaper in all cases.

Thought someone shared the agreement here - if I remember correctly, the buyout terms were not favorable in that prepaying did not forgo the obligations of the full cost of the original term

 

[jjswan33]

Thought someone shared the agreement here - if I remember correctly, the buyout terms were not favorable in that prepaying did not forgo the obligations of the full cost of the original term

https://www.rivianforums.com/forum/threads/lease-buyout-process.22794/

From what someone posted here it's exactly what I would expect. You just have to wait 3 months, I think the transaction is no longer considered a lease if you buy it within the 3 months.

If true that means you pay 3 lease payments then pay off the remaining capitalized cost (residual + remaining depreciation). So worst case scenario you probably pay $1000 in interest and the acquisition fee. If all true that means leasing then early payoff would be ~$5k cheaper then purchasing directly.

 

[Electrified Outdoors]

I've selected my R1T from inentory and I'm deciding between lease or purchase. I've leased last 5 vehicles and was excited to switch to finally owning due to constant hidden fees, worrying about wear and tear and going over on mileage. I'm only considering leasing now to try to benefit from $7500 EV incentive that only applies to leasing (my income disqualifies me from $3500 credit for purchase).
-was also planning to purchase because I will likely go over 15,000 miles per year, (up to 25,000 miles per year) unless my job changes (40% chance)
-MSRP is $91,000 for my R1T
-I had put aside the $90kl for this purchase over the last 2 years, so I have the capacity to pay in full without financing (though I am not flush with cash and I've never before purchased a car because I never had $50-$80k available at one time for a purchase)
-I was considering leasing for 3 years, then buying out at end of lease term to take advantage of the $7500 credit
-when I plung in #s for 36 payments + downpayment, and add the anticipated residual value at the end of 3 years of $53,572 (given to me by my guide), I seem to be paying the same total amount. I'm assuming the interest payments during the lease are offsetting the $7500 credit
-total amount paid of 36 months does not move substantialiy if I pay 5k downpayment vs 25k downpaymenbt.
-I live in CT and they don't lease in CT, but they tell me I am able to lease through Florida or Mass if I can give them a volid address in those states, even if I don't live there and even if it doesn't match the address on my valid CT license.
-I am just not seeing the benefit of leasing, or am I missing something?
-I'm not a numbers/finance guy, so please keep it simple in responses

Going over mileage not too huge of an issue as you can just buy out the lease at the end. You will however be locking yourself into that option by going over the mileage by that much. The over mileage fee is $0.30 per mile so if you put on 25k per year on a 15k lease on a 3 yr term that $9,000 in excess mileage fees.

With that said you could always buy out and sell it as long as the value is near the residual.

New car warrant will be gone though is you go over 50-60k miles.

It's a tough decision. I would do the math both ways but if you out on 75k in 3 yrs your likely to be well below the residual.

Going over by that much usually rules out leasing unless your good with paying the extra mileage fees. 30,000 miles over comes to about $250 a month...you could put it in a savings account each month and then just turn it in too.

 

[TheWoo]

I decided to lease mainly for one reason: I can just give it back in three years. If I love it and the value is there, I can buy it out, but if used values have fallen even further and tech has advanced significantly and I'm ready for what's next, I have the option of just giving it back.

That was worth it to me, especially with early products in a rapidly changing technology. Protect against the downside, with options to buy for little additional cost if there's upside...

 

[waveroamer]

Curious on people's input too as I'm in similar situation to you - also looking at a 90ishk R1T and choosing between leasing or buying out right (also saved a chunk of cash). Having leased last 3 vehicles, I'm also fairly familiar with the leasing process. I was originally going lease and purchase in 3 months to take advantage of the $7500 discount but as delivery dates get closer, I'm beginning to lean towards simply buying it outright as the financial terms are pretty close at the end and there's an element of finality in purchasing it outright.

Though the flexibility of returning the truck at the end of lease is tempting (given the rapid changes in EV tech as many people pointed out), I'm fairly committed to keeping the truck for 8-10 yrs, thereby negating the flexibility of lease to buy and also not worry about any mileage limitations.

For your situation given the high mileage use, it's probably awash from financial standpoint either way you go. I'd probably just purchase if you've allocated funds for it already.

 

[Tarponman85]

Lease.
I owned one, sold it a couple months ago and just leased one.
I wouldn’t want to own one with the way values or stock is going.

 

[Jeep Addict]

Lease.

Cash is king, leasing gives you a lower cash cost to have full enjoyment of the R1 in comparison to purchase. You also have the bulk of the cash to invest, even conservatively, returning +5% APY.

Then there's the inevitable march of progress, in 24 or 36 months the landscape of EV's will be much different than it is today. You may have additional choices and some of those may be technologically and economically more attractive than a 2 or 3 year old R1.

Leasing is a low risk choice.

 

[abct]

Turns out I can't lease, They don't offer leasing in CT. Although I could lease through FL, my insurance would be separate from my current group policy and would cost way more, offsetting all of the $7500 tax rebate. I will purchase. Thanks for input

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