Worth Upgrading to Gen 2?

[DayTripping]

Maybe - depends on how far they actually are able to push this hardware on the autonomy platform and what you personally value about the vehicle. The launch of hands-free assisted driving is what has pushed me over the edge. It shows me they are going to back up that platform with deliberate and continual improvements which Gen 1 just can't receive due to hardware limitations. (supposedly eyes free driving by 2026, expansion of the network to more highways, etc.)

It's a $27,000 MSRP increase for me to upgrade to Gen 2, but I've also only lost ~4,800 in depreciation (over 20 months) comparing the net cost of the vehicle after tax credits to the value Rivian is offering plus the $3,000 incentive. The technology improvements beginning to become real combined with the real value provided by the pricing in the Dune Edition (allows me to get into a Tri-motor for the same price as a similarly equipped Dual Max spec'ed as I'd like it to make the upgrade worth it. But I can't get past the loss of power and performance from my Gen 1 QM, to justify moving into a dual max).

There's also real changes in the Dune edition that I value - specifically the easier to clean floor surface as the owner of 2 dogs. I also really like the limited edition 2 tone material, and of course the other changes are great as well - but not driving my decision by any means.

So all of this, combined with the additional lease incentive, a $3,500 CO tax credit, and the Speaker of the House recently confirming that the EV credit's days are numbered if he gets his way, has pushed me over the hump to upgrade. Probably 2 weeks out from delivery still - but I'm just as excited as the first time I took delivery!

I'm willing to take the risk that Rivian is going to delight me with some pretty spectacular updates over the next 3 years (as it has over the past 20 months). It's worth the penalty to me to move over to the lease. I'll decide at year 2 based on vehicle history, mileage (I have a 15,000 mi per yr lease, which should be good for me - I pretty much just do road trips but drive very little working from home), and the market at that time. I think it's a crap shoot whether the value will end up higher or lower than residual (especially with the tariff uncertainty), but at year 2 I should have a better idea - that's the benefit of the lease.

It also helps that since I also have $25k of equity in the car - the switch over to a lease should reduce my payments by $300 per months. Verdict is still out on what the lease terms come back as though... They've agreed to allow me to get a refund of my deposit if it comes in over $100 more per month than they quoted, although realistically I'll move forward with any material reduction in my monthly payments.

So you have a G1 quad. What G2 are you looking at, the Dune? So what is the actual cost delta before taxes and fees? Not factoring in any trade equity?

When I was looking at this originally before buying my used G1 quad, it was going to be about 45k more for a 2025 Trimax R1T. That was with the Ascend interior so more expensive than a dune. Then add in the additional sales tax and other fees, and I was pushing an additional $50k more than a barely used quad. Not to mention, I liked the normal Adventure interior better and didn't need cloth back seats.

Then they came out with the Dune. Which was actually more in line with what I wanted, a better price point, but about 3 months too late. I needed to buy something for tax purposes to get the write off last year.

So curious what sort of delta there is now.

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[waitingonanr1s]

So you have a G1 quad. What G2 are you looking at, the Dune? So what is the actual cost delta before taxes and fees? Not factoring in any trade equity?

When I was looking at this originally before buying my used G1 quad, it was going to be about 45k more for a 2025 Trimax R1T. That was with the Ascend interior so more expensive than a dune. Then add in the additional sales tax and other fees, and I was pushing an additional $50k more than a barely used quad. Not to mention, I liked the normal Adventure interior better and didn't need cloth back seats.

Then they came out with the Dune. Which was actually more in line with what I wanted, a better price point, but about 3 months too late. I needed to buy something for tax purposes to get the write off last year.

So curious what sort of delta there is now.

MSRP of my Gen 1 QM configuration was $78,800, MSRP of the Dune is $105,900 - so the step up is $27,100. Trade-In Value they offered was $65,600 with 32,000 mi - so step up of 40,000 from that figure - so basically what you looked at, but a little cheaper because it's a Dune. But that's not how I look at it having bought it new and that's not really an apples to apples comparison, but I see how it makes sense entering the Rivian ecosystem, trying to decide used or new. There's not one single thing wrong with mine. If I pass, realistically I'll probably hold on to it at least until it's paid off in 3 years.

That's then tempered by $11,000 in tax credits (7,500 federal as a reduction lease cap cost, 3,500 CO when I file my 25 tax return), $3,000 for the electric trade-in Rivian incentive, free $800 wall charger they threw in because I mentioned I don't like the tire noise on the Pirelli's, and $1,000 in shop credit from self referring.

That makes the effective MSRP step up $11,300. Then my $25,000 in trade in equity means my payment should come down from 1,200 to 900 per month, and I'll lose a few, but offset by sales tax so I guess a wash (about 40 payments remaining on my loan). And basically that equity originated from the $28,800 trade in value Rivian originally gave me on my 2016 4runner with 80,000 miles I traded towards my Gen 1 QM in 2023. So I'm happy to basically keep using almost all that equity towards yet another new vehicle.

Are there wiser financial decisions, sure. But I have loved road tripping with my dogs in the R1S. I have a reservation for an R2, but I just don't think I want to downsize. This is just a good opportunity for me to take a slight upgrade with a product I already know I love. It's worth it to me and I'm stoked.

 

[DayTripping]

Thanks, I see where you are coming from. Basically, I assume your trade equity will be going toward your cap cost reduction.

As for the R2, I don't think I'd downsize to it but likely will convert my Slate reservation into an order when available.

Enjoy your new truck!

 

[waitingonanr1s]

Thanks, I see where you are coming from. Basically, I assume your trade equity will be going toward your cap cost reduction.

As for the R2, I don't think I'd downsize to it but likely will convert my Slate reservation into an order when available.

Enjoy your new truck!

Exactly - that's one area that gets more risky with leasing. If the vehicle gets totaled early in the lease then I'm likely going to be out a good chunk of cash. I see it as a trade off for less risk on the excess depreciation side. It's just interesting to work through as a lessor for the first time. But if the 7,500 tax credit goes away, the math becomes much more difficult to justify (for my case at least). And personally, I think it will be gone by the end of the year. But that's just a hunch.

 

[DayTripping]

That would be my fear, is with all the bought down payment due to the cap cost reduction, what happens if your vehicle gets stolen, destroyed, etc. What happens if you were to lemon law it? Would Rivian make you whole?

If you have a business, I think the clean vehicle tax credit is still available. I was considering that when I bought my G1. Even with that, the numbers still dramatically favored buying a used one vs the tax credit on purchasing or leasing a new one. If they had something like the Dune at the time, I might have been more tempted to make the leap to the G2 trucks.

Having been burned, not as bad as some, on my Tesla Plaid, I am still very leery of dropping 6 figures on an EV. If I were to lease, I'd put the minimum down I could. I can make more money in my investment accounts than the benefit I'd get from prepaying the rent on the vehicle or lowering my payments if I bought.

With the 7500 tax credit, added into a lease, it does make it a lot more attractive to people who can take advantage of it. Then, an early buyout makes a lot of sense if you want to keep the car.

I am normally purchase for the long haul and own for normally 7+ years. On a G2 truck, I definitely think leasing makes a lot more sense since they didn't do that much to improve it from the G1 and if there is a G3, it will likely be differentiated a lot more (at least I hope) from the G2 and G1 trucks.

 

[waitingonanr1s]

Lemon law works the same for a lease - they can either replace the vehicle or unwind the transaction, refunding you for what you paid as I understand.

If it's totaled or stolen then the ACV goes to Chase. If it's higher than the remaining lease value then the overage goes to Chase. That's the other side of the coin. You trade depreciation risk protection for additional catastrophic risk basically. I'd definitely be asking for some concessions from the at fault party, Chase and Rivian in the case of a loss due to no fault of my own. But completely understand there are no guarantees - you're going to have to fight for anything you get.

But on the other hand, if you have a crash and it's anything short of totaled (more likely) - then guess who gets to worry about diminished value - not you. That's Chase's problem in that case, because you likely wouldn't want to buy it out for the pre-set residual if you crashed it.

The residual value is set at the beginning of the lease - it doesn't change. So if the bottom drops out on the value in the years well below residual - you return it and say thank you very much for the nice vehicle. Rinse and repeat, or go buy one - do whatever. If it's the opposite it's a no brainer to buy it out. Basically you have options - especially if you like to upgrade a lot, which I'm finding I like to do.

Without the 7,500 credit I would have never looked at leasing, but it effectively greases the wheels and makes things interesting, since Uncle Sam provides some stimulation to the transaction. It really wasn't the intention of the law when passed - but the business deduction you mention is why it works. They claim the credit and choose to pass it on to you to make the lease deal.

It's a risk for sure, but one that diminishes as the lease amortizes - Chase will only allow trade in value reduction up to 40%. If I had more equity they have just in the past few days started buying back those vehicles for the trade in price - forwarding the max cap cost reduction to Chase and cashing you out for the difference (this is not my situation though).

 

[mpshizzle]

My .02 - the gen 2 is a really, really good vehicle. A few things are a step backwards from gen 1 but overall it's just a better vehicle.

HOWEVER - that doesn't mean the gen 1 ISN'T an excellent vehicle. Because it is. Rivian didn't release gen 2 hoping it would entice current gen 1 owners. It's meant to attract NEW buyers. The bonus benefits are to increase profitability and pave the way for R2.

For most gen 1 owners it just doesn't make sense - and it was never meant to.

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