Lease Buyout Process?

[feifan]

Has anyone already gone through with buying out their lease? I'm planning to do so ASAP (so I can get my insurance coverage in my name); I'm curious what the process is.

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[Ngkgb]

Most companies provide you with a payoff quote. You pretty much just mail them a check for that amount. It’ll prob take a few billing cycles for this to be an option.

 

[Aag12]

Why would you buy it out now? I don't think you get any discount. Only potential benefit I see is a lower insurance rate and requirements.

The tradeoff is you can't trade it in if you choose to at lease end. Just think if you get into a major accident, cars not totaled, and you're underwater in terms of value. Another scenario is market on rivian crash.

 

[feifan]

I'm planning on keeping this car for a long time, so I know I won't want to trade it in at lease-end. Currently as a lease, I have 0 equity in the car, whereas even in the major-accident scenario, I'd have some equity in the car, so at the very least I'm not worse off vs keeping it as a lease (or in other words, it would have to lose a lot of value that's not covered by insurance for it to be worth it for me to end this lease and get a new one, given all the fees and taxes involved with registering a new car).

On the plus side, it's easier for me to deal with the DMV (I move somewhat often, and updating addresses with the DMV on leased cars is a major pain) + I can add insurance coverage for aftermarket gear I'm planning to get (currently, I believe, any extra coverage I add on my insurance would just result in a bigger insurance payout to the leasing company, not to me, if the car is totaled).

 

[Electrified Outdoors]

Lease buyout... Though I haven't seen Rivian's lease agreement is usually pretty simple. You typically pay the balance of the lease plus the residual at the end of the lease. I would contact them and ask for a buyout and see what they say.

Leasing is really only beneficial financially if you can deduct the lease payment from your taxes (usually business owners or self employed folks). Leasing usually always winds up costing slightly more over the 2-3 year term than financing it.

As you point out there are a lot of limitations but some folks like knowing that they can turn it in after the term and don't have to pay the rest or keep the car.

I have leased and I never put money down on the lease (except for taxes and DMV fees). Reason being is that you wouldn't get that back in the event of a total loss.

If you do buy it out please let us know how the process goes. Curious how Rivian handles it.

 

[feifan]

Yep, I'm planning to contact them! I just like to be prepared/know what to expect.
For leasing in general, the specific benefit here is getting the $7500 EV credit as a capital cost reduction through the lease; I wouldn't qualify for that credit otherwise. I won't get the full savings (because some of it will be eaten by lease fees), but I still come out ahead with the lease.

 

[Riviot]

Yep, I'm planning to contact them! I just like to be prepared/know what to expect.
For leasing in general, the specific benefit here is getting the $7500 EV credit as a capital cost reduction through the lease; I wouldn't qualify for that credit otherwise. I won't get the full savings (because some of it will be eaten by lease fees), but I still come out ahead with the lease.

Math

 

[buffaloNYR1T]

Just a heads up- under my lease account in the Chase app I can already see the “request a lease buyout quote” button- pretty sure that’s where you’ll go to do the buyout, if you haven’t looked at the chase app yet.

My lease only started 2 weeks ago so actually pretty impressed how quick they got that all up and running, but I was already a Chase customer prior to the lease.

 

[Eric9610]

The benefit of leasing is you get the tax credit up front. Most people don't qualify for the credit due to income cap. I posted in another thread the buyout is not just the remaining amount on the car. It states clearly in the terms you sign: early buyout = all remaining payments + residual stated in contract + tax.

So Chase is making sure they get the interest also. This is different from other brands as usually the buyout is on the remaining cost on the car plus tax. Also the rates I have seen on the lease are really good considering todays market. 3.5-4.1% APR.

 

[feifan]

@buffaloNYR1T you're saying you'll see your Rivian lease account alongside your other Chase accounts (credit cards, checking accounts, etc)? That's good to know.

@Eric9610 from my lease contract, section 32: "To purchase the Vehicle, you must pay the sum of (a) … the Adjusted Lease Balance plus the purchase option fee, plus (b) [fees & taxes], plus (c) [past-due payments]". Adjusted Lease Balance "equals the Adjusted Capitalized Cost minus the sum of all accrued monthly Depreciation", but it doesn't mention rent charge, so I'm taking that to mean that the buyout amount would be the Adjusted Capitalized Cost (11c) minus the Depreciation I've already paid for, i.e. I wouldn't also have to pay the entire remaining Rent Charge.

If I do have to pay off the entire Rent Charge with an early buyout, then yeah it wouldn't be worth it.

 

[Eric9610]

@buffaloNYR1T you're saying you'll see your Rivian lease account alongside your other Chase accounts (credit cards, checking accounts, etc)? That's good to know.

@Eric9610 from my lease contract, section 32: "To purchase the Vehicle, you must pay the sum of (a) … the Adjusted Lease Balance plus the purchase option fee, plus (b) [fees & taxes], plus (c) [past-due payments]". Adjusted Lease Balance "equals the Adjusted Capitalized Cost minus the sum of all accrued monthly Depreciation", but it doesn't mention rent charge, so I'm taking that to mean that the buyout amount would be the Adjusted Capitalized Cost (11c) minus the Depreciation I've already paid for, i.e. I wouldn't also have to pay the entire remaining Rent Charge.

If I do have to pay off the entire Rent Charge with an early buyout, then yeah it wouldn't be worth it.

yes, it shows up immediately once the contract is executed in your chase login account if you already have accounts with chase.

 

[mmcool]

I want to take benefit of 7.5k for lease. If I pay upfront down-payment and keep installments low for lease like 125 or so. If I buy out in a month, would I save more vs just buying upfront without 7.5k benefit?

 

[feifan]

I want to take benefit of 7.5k for lease. If I pay upfront down-payment and keep installments low for lease like 125 or so. If I buy out in a month, would I save more vs just buying upfront without 7.5k benefit?

Probably … based on the numbers in my contract, any down payment of about $18k or more (YMMV) will result in a rent charge of less than $7500 minus lease origination fee. But if your car is totaled while it’s still being leased, you won’t get your down payment back, so that’s the risk you’re taking.

 

[mmcool]

Probably … based on the numbers in my contract, any down payment of about $18k or more (YMMV) will result in a rent charge of less than $7500 minus lease origination fee. But if your car is totaled while it’s still being leased, you won’t get your down payment back, so that’s the risk you’re taking.

Thanks. Can I pay off in a day or two and that way chances of totalling are less. Would it be atleast 5k saving?

 

[feifan]

Can I pay off in a day or two and that way chances of totalling are less

I've heard from Chase that you have to wait 90 days from the day you take delivery before you can buy out the lease, but I haven't personally tried to buy it out yet.

Would it be atleast 5k saving

It'll depend on your exact numbers. Last I've seen, residuals for 3-year leases were around 59–61%; 2-year leases were in the mid-upper 60s%. Interest rate on leases were around 3.9%. (All numbers for R1T; R1S might be a bit different, but you can find examples if you search this forum).

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