Finance vs. Lease the R2 -- the math

[ribuck97]

Yeah, they’re definitely incentivizing buying over leasing at this point. Demand is high, which is great for the company. I’m going to wait until next Spring when the majority of trims are released and some of the bugs have been worked out. Leasing a Standard or even a Premium model should be much more reasonable ($500-$600 a month?)

Keep in mind, all I'm doing is GUESSING at the monthly and calculating the APR. If Rivian uses the Performance APR, the monthlies will be much higher.

People need to understand that a portion of the high lease APR is, in my opinion, due to the "free" launch package value of $3700

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[Rizzian]

@ribuck97 , there's no such thing as a free launch

 

[Gen(R3)Xer]

Keep in mind, all I'm doing is GUESSING at the monthly and calculating the APR. If Rivian uses the Performance APR, the monthlies will be much higher.

People need to understand that a portion of the high lease APR is, in my opinion, due to the "free" launch package value of $3700

I figured it was just a guess, but thanks for the effort. Buying might actually be better after the RAP1 + LiDar upgrades roll out. Depends on a lot of factors that could change within a year. I’d love to see the competition heat up in this space and some great deals come out of it.

That Launch Package is beefy.

 

[emroch]

If I am reading this right, in Texas you will pay sales tax on the full value of the car - up front - if you lease. Then if you buy it at the end of the lease, you will pay sales tax yet again on whatever the residual amount is. Double tax for a least a portion of the cost. Texas auto sales tax is 6.25%.

This is correct. Leasing with the intent to buy out is tough in Texas because of this tax situation. You'd need a good incentive that covers the double taxed portion and then some for it to be better than financing.

 

[RivAW]

Financing vs. Lease math - by @travisketchum

If you're weighing lease vs finance for the R2, the numbers tell you everything you need to know.

Financing can save you $8,836 over a 36 month term.

Until you get to the end of 36 mos and shop trade in offers the “estimated equity” on the finance side is just made up (barely better than a guess), which heavily tilts the “analysis” one way.

 

[Kidentist]

JESUS !!! my current lease is $238..........why would I ever pay more. NEVER. Once it's over time to move on, it's been fun though.

 

[RivAW]

R1 is a bad example to use IMO. The higher the cost of the car the more there is to depreciate. $100k cars have a lot of room to go down in value. An R2 is only $50-$60k...can only drop so much.

Also with EV depreciation historical trends you must take out COVID pricing in the 2022-2023 time frame to get realistic future depreciation. The media loves writing articles about how badly EV's depreciate but ignored the crazy market factors at that time that applied to all cars really. People were paying $70k+ for new Model Y's at that time. RAV4's at the Toyota dealership near me were going for $50k! A foreseeable massive drop in value once the COVID spike ended.

Depreciation is typically a percentage rather than a specific dollar figure. R1s having more room to drop in value seems like a silly argument

 

[Jeremy3292]

Depreciation is typically a percentage rather than a specific dollar figure. R1s having more room to drop in value seems like a silly argument

I’ll let you do the math: what’s 50% of $100k vs 50% of $50k? Math is hard, but seems to me one of those is a “much larger drop” in value.

 

[Zathras]

Has anyone noticed the price of used R1s and R1t have gone through the roof? No doubt thanks to gas prices. I wonder how that might change the calculations?

 

[Jeremy3292]

Has anyone noticed the price of used R1s and R1t have gone through the roof? No doubt thanks to gas prices. I wonder how that might change the calculations?

Gas prices are tanking and will continue to tank though over the next few months.

 

[Zathras]

Gas prices are tanking and will continue to tank though over the next few months.

I don't think it's going to go down fast for a while, because reserves are pretty much depleted, and Gas CEOs were saying last week it could hit $7 a gallon if the war didn't end soon.

 

[Jeremy3292]

I don't think it's going to go down fast for a while, because reserves are pretty much depleted, and Gas CEOs were saying last week it could hit $7 a gallon if the war didn't end soon.

www.oilprice.com

Brent and WTI have retreated heavily over the last few weeks from their highs of $110ish down to $80ish today. Pre-war they were in the $65ish range and that was when gas was cheap.

They hit $110 in 2022 also, and then were in the $80s and $90s in 2023 and 2024. Only started getting into the $70s and $60s last year. So $80 a barrel is pretty "normal"

 

[daeHelkcunK]

Yes, I agree. The lease payment seems quite high for a $60K vehicle. My assumption is that they're intentionally structuring the lease program to encourage more customers to purchase or finance instead. Doing so would reduce the number of lease returns and help avoid building up a large inventory of used R2s being sold at significantly lower prices, which could ultimately impact new vehicle sales.

For comparison, I currently lease a Genesis GV70 Prestige EV, which had an MSRP of around $75,000, and my payment is $650 per month.

What concerns me now is the growing list of add-ons. I configured my vehicle with the Coastal White interior, which is already a $1,000 option. Now we're hearing about ceramic window and sunroof tinting, which could add another $1,500. Both of these options will increase the lease payment even further.

I live in Florida, so high-quality heat-rejection tint is practically a necessity. My biggest issue is that these additional costs weren't communicated earlier in the process. I think Rivian should have been more transparent from the beginning so customers could make more informed decisions about pricing and affordability.

I'm in Naples and haven't tinted my glass. My cars are white. I find that the only time my R1 really heated up was at high noon. I clipped in a sunroof liner ($50). I really wish sunroof delete was an option. I would actually pay more not to have one.

 

[R2D2TOO]

Gas prices are tanking and will continue to tank though over the next few months.

Are they?

Still pretty high.
Global reserves have been largely depleted.
There is a huge gap in the market from the closing of Hormuz.
I hope you are right because it causes everything to be higher priced.
But I have my doubts. This will take many months to rebalance, even assuming Iran is over.
I have my doubtd about that too.

 

[fratpack]

I don't know why they advertise that rate if they have no intention of giving better. I reached out a while ago to see what my best rate would be and they also gave me that number. I was wondering at the time how perfect do you need to be to get the advertised rate. Good to know the rate doesn't actually exist.

Anyone know if this is the case with NavyFed and USAA?

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