Lease with immediate buyout?

[DuoRivians]

A lease is not a loan. OP or anyone actually in a lease can and should request their payoff terms. There is no obligation to actually payoff, but you have to have an active lease to get the numbers. For me and others, there were no early termination fees and no payments of uncollected rent charges. YKWHMV

This is correct

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[voxel]

Complete nonsense you are describing a ballon payment loan buyout. OP DO NOT BELIEVE THIS.

No bank is going to lease you a vehicle (they purchase) and have you buy it from them for their costs. That's not how banks make money on leases. Either you give them the lease terms money over time or all at once. The amount of money owed doesn't change with the exception of any fees incured for your choice.

Sorry but you are completely and utterly wrong and I rarely write that.

Lease buyouts do not force you to pay all of the unearned rent charges (depreciation and interest). The buyout is often the adjusted cap cost minus the rent charges paid.

 

[DD4ST]

If you have the cash AND good lease terms, you might want to lease. I’ve got a MF close to 0% (equivalent) on my 23 R1T. Could have bought outright but wanted the tax credit. Developed a spreadsheet to compare numbers as this was my first lease, and included earnings I would get on my own money still invested. Over three years of lease I get almost $10K of extra earnings that I would have given up if I paid cash. This is on top of losing the $7500 tax credit. The only downside is you are limited how much you can customize your vehicle. But also I am protected in case resale values tank.

 

[millersntx]

We've put $500 down on a G2 R1S Dual Large, with pick up in Portland in about three weeks. We could purchase outright, but a friend recommended that we lease to get the $7,500 incentive, then buy it off right away. We would need to pay the $895 acquisition fee and $495 disposition fee, but that still puts us $6,100 ahead (assuming we would not otherwise qualify for a tax rebate). I've been told that others have done this, but when we got a call back from a Rivian Guide (or someone) today, he said that you could not buy out your lease immediately. I did not find a way to talk to anyone at Chase, without already having an account with them. Have others done this successfully? Anything I'm missing? How can we confirm?

I've had my lease just under a month and I can already see a purchase quote in the Chase App.

 

[Riviot]

Complete nonsense you are describing a ballon payment loan buyout. OP DO NOT BELIEVE THIS.

No bank is going to lease you a vehicle (they purchase) and have you buy it from them for their costs. That's not how banks make money on leases. Either you give them the lease terms money over time or all at once. The amount of money owed doesn't change with the exception of any fees incured for your choice.

Have you tried or completed a lease buyout with Rivian or any other auto company recently, or ever? Multiple people here have done so and are explaining the process, which all concur with my experience buying out a lease earlier this year.

 

[dcmackintosh]

If you have the cash AND good lease terms, you might want to lease. I’ve got a MF close to 0% (equivalent) on my 23 R1T. Could have bought outright but wanted the tax credit. Developed a spreadsheet to compare numbers as this was my first lease, and included earnings I would get on my own money still invested. Over three years of lease I get almost $10K of extra earnings that I would have given up if I paid cash. This is on top of losing the $7500 tax credit. The only downside is you are limited how much you can customize your vehicle. But also I am protected in case resale values tank.

One reason completing a lease and turning it in probably wouldn't work for us is that I drive a lot, probably 25k miles per year. I could calculate that in as well, I think they charge $0.30/mile. There's also likely to be significant cosmetic wear or minor damage due to our heavy winter use here, so they'd also penalize us for that.

 

[MasterofWilford]

You clearly have no idea what you are talking about or didn't understand what I said.

Leases are very simple. You have a rent charge that is equally divided by every payment (your paying interest every month). You don't have to pay interest any longer than you have an outstanding balance. There is no nonsense there at all.

I literally just did this like I said. FACTS. I paid 3 months worth of rent charges and not a penny more and I owned the car got the title in the mail a month later.

So MSRP was around $60k then 7500 tax credit allowance then TTL of about $1k, $3k down payment. My payoff (residual plus cap costs) was ~$51k after 3 months worth of payments. So total I paid $51k + 2100 (3 monthly payments) + $3k down or ~$56k of which around $1200 was from 3 months worth of rent payments.

Edit: And to your point I think the bank did fine. several months worth of rent charges plus the acquisition fee they charge amounted to ~$2k.

Hi Joshua,

I just ordered from the shop (my custom build was taking too long).

I have a few questions about the $7,500 lease credit at Rivian. Does that lower the sticker price or is that applied elsewhere? For example, if my R1S is priced at 90,000, the $7,500 lease credit will be applied to the capital cost and the adjusted cap cost should be 90k-7.5k = 82.5k? It should be 82.5K but I have no idea how Rivian is finagling their numbers and fear they may play tricks.

If you buy outright a 90K R1S and decide to finance with zero down, you're borrowing 90K subject to interest (let's ignore taxes for now). But if you lease it, how is it applied and how does it benefit folks who plan to buy in three months time? Is it no more than 82.5K after three months of time? I assume a certain percentage of the each monthly payment will go towards bringing down the buy-out value?

 

[MasterofWilford]

Hi Joshua,

I just ordered from the shop (my custom build was taking too long).

I have a few questions about the $7,500 lease credit at Rivian. Does that lower the sticker price or is that applied elsewhere? For example, if my R1S is priced at 90,000, the $7,500 lease credit will be applied to the capital cost and the adjusted cap cost should be 90k-7.5k = 82.5k? It should be 82.5K but I have no idea how Rivian is finagling their numbers and fear they may play tricks.

If you buy outright a 90K R1S and decide to finance with zero down, you're borrowing 90K subject to interest (let's ignore taxes for now). But if you lease it, how is it applied and how does it benefit folks who plan to buy in three months time? Is it no more than 82.5K after three months of time? I assume a certain percentage of the each monthly payment will go towards bringing down the buy-out value?

To make matters more complicated, NJ is ending their exempt sales tax incentive on EVs starting October 1, 2024. It's ridiculous since they haven't met their initial targets of 300K+ registered EVs in NJ.

From October 1, 2024 to July x, 2025, EVs will be subject to 3.3x% or half of the current sales tax rate that other ICE vehicles are subject to. After July x, 2025, EVs will be taxed no differently than their ICE counterparts (sad!). If I use the lease credit and decide to buy it out before July x, 2025, the buy-out portion will be subject to 3.3x%. I suppose that's not too bad but I know my Large Pack lease will be atrocious (MF or rent charge will likely be equivalent to 7-10% interest).

I am thinking of just financing a R1S Max at 3.49%, 72 months, benefit from the zero sales tax and competitive in-house interest rate, but I'm not quite sold on Rivian's long term viability as a company and the future value of Rivian R1S vehicles. I don't want to be stuck with a financed EV in an environment where EVs trend down (think of Trump, lower gas and the present negative sentiment on EVs and positive sentiment on and shift to hybrids).

 

[DuoRivian]

Not a fan of people trying to circumvent the IRA by leasing rather than purchasing. It is a loophole that should never have existed.

 

[MasterofWilford]

Not a fan of people trying to circumvent the IRA by leasing rather than purchasing. It is a loophole that should never have existed.

Who introduced and ultimately signed off on that loophole?

 

[Hereforthesnacks]

Who introduced and ultimately signed off on that loophole?

Congress? Lol

 

[Hereforthesnacks]

Not a fan of people trying to circumvent the IRA by leasing rather than purchasing. It is a loophole that should never have existed.

If it’s on the books, I don’t have a problem with people being savvy. But as others have posted, it’s not a huge windfall, though there can be a benefit.

 

[DuoRivian]

Who introduced and ultimately signed off on that loophole?

Not the senator that proposed the limits on income and manufacturing source. Instead an administration happy to spend limitless money (the projections are now $800 billion vs the originally $300 billion in part due to the uncapped nature of the EV credit with this loophole).

 

[DuoRivian]

Congress? Lol

President! Lol

 

[Hereforthesnacks]

President! Lol

Huh? The President does not introduce legislation.

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