Lease Buyout

[Apatel323]

Has anyone leased a Rivian and bought the vehicle shortly after? Under a normal purchase, I wouldn't qualify for $7500 tax credit, so wanted to consider this option. Thank you.

Sponsored

 

[Aag12]

Has anyone leased a Rivian and bought the vehicle shortly after? Under a normal purchase, I wouldn't qualify for $7500 tax credit, so wanted to consider this option. Thank you.

Most people say it's Ill advised to buy it out right away. You don't save any interest doing it and give up your option to walk away after lease end and the built in gap insurance in case you total your car.

Just imagine if rivian values tank and your car is worth less than the buyout price... It's not totally out of the realm of possibilities of a massive price drop, value of used cars plummet, rivian start catching fire, etc.

 

[jjswan33]

Most people say it's Ill advised to buy it out right away. You don't save any interest doing it and give up your option to walk away after lease end and the built in gap insurance in case you total your car.

Just imagine if rivian values tank and your car is worth less than the buyout price... It's not totally out of the realm of possibilities of a massive price drop, value of used cars plummet, rivian start catching fire, etc.

It depends on what the actual terms of the lease buyout are, that is the important question I haven't seen definitively answered.

Some have claimed that you have to pay the entire 'rent charge' even if you buyout early, if true then what you say is correct. But... if it is like most other auto leases and you only pay the capitalized cost remaining + residual then you would save on 'rent charges' for all remaining payments.

 

[Aag12]

It depends on what the actual terms of the lease buyout are, that is the important question I haven't seen definitively answered.

Some have claimed that you have to pay the entire 'rent charge' even if you buyout early, if true then what you say is correct. But... if it is like most other auto leases and you only pay the capitalized cost remaining + residual then you would save on 'rent charges' for all remaining payments.

True. Pretty sure they don't have a 'one pay' option yet, but you're right that you need to see the docs to know for sure.

The leasing program is with chase and they offer 'one pay' option for some of the brands they do, but not all.

 

[shrink]

It depends on what the actual terms of the lease buyout are, that is the important question I haven't seen definitively answered.

Some have claimed that you have to pay the entire 'rent charge' even if you buyout early, if true then what you say is correct. But... if it is like most other auto leases and you only pay the capitalized cost remaining + residual then you would save on 'rent charges' for all remaining payments.

Someone on Reddit posted some terms of an R1T lease over 36 months and I think 12,000 miles? I don't remember specifically but interestingly the rent charge was about $7500, which if, course, equal to the $7500 tax credit cap cost reduction.

I'm not entirely convinced Rivian leases are a good option if someone plans to buy the vehicle. There are a lot of moving parts - money factor; residual; acquisition fee; disposition fee; etc. Granted I haven't examined lease terms so I really have no idea. I am definitely curious about lease buyout terms, though. If Rivian is requiring the entire terms (with interest) of the original lease term must be paid, best option seems to be a 24-month lease to minimize interest and compare how that compares to purchase without the tax credit. Again, with the various lease fees not sure how well this all works out.

 

[Electrified Outdoors]

Your not saving any money buying it out. Your paying the rent charge and if you turn around and buy it out you still have to pay that plus the lease plus the residual. If your financing your paying interest again on the depreciation.

Leases are usually not a good deal. They are attractive for two reasons:

1) self employed folks who take actual expense deductions and can write off the entire lease payment

2) folks who want a guaranteed walk away option at the end of the term without being upside down

In reality, after three years one usually isn't upside down unless they put little or nothing down on it.

If your going to lease I say ride out the lease and decide when it nears maturity. Also, put little or nothing down on a lease.... In the event of a total loss you will lose any cap cost reduction (down payment) since the lessor ... Not you... Will be made whole.

Very rarely you can make out if the market value is much lower then the residual... But the banks have actuaries who are darn good at protecting against losses.

 

[Golfer04]

It depends on what the actual terms of the lease buyout are, that is the important question I haven't seen definitively answered.

Some have claimed that you have to pay the entire 'rent charge' even if you buyout early, if true then what you say is correct. But... if it is like most other auto leases and you only pay the capitalized cost remaining + residual then you would save on 'rent charges' for all remaining payments.

I'm curious on this too. The lease details seem hard to find; especially where pre-paying and buying out are concerned.

 

[Apatel323]

Thank you for the responses. If I didn’t buy out the lease right away and paid the lease over 3 years and purchased it at the end, would my total cost be the same as buying it now or more or less? The $7500 credit on the lease makes it interesting.

 

[Eric9610]

Here is my 2 cents from leasing mine... Current MF to APR I have is 4.125% you won't get this low of a rate if you purchase the car I have a friend that just leased and his APR was closer to 3.5%. In total my residual is 65%. We will see where prices are at the end of my term could be a good deal to buy otherwise I will walk. The lease for me was better than purchase since I don't qualify for the FTC.

 

[DuoRivians]

Thank you for the responses. If I didn’t buy out the lease right away and paid the lease over 3 years and purchased it at the end, would my total cost be the same as buying it now or more or less? The $7500 credit on the lease makes it interesting.

Assuming you would have financed a purchase, the APR % you pay on a lease is comparable to what you’d pay in interest for financing a purchase. So, you’re still better off by $7500 by leasing.

 

[shrink]

So, you’re still better off by $7500 by leasing

Not quite.

Looks like the following fees are associated with a lease only but not a purchase:

Acquisition fee: $895
Disposition fee: $495

Total: $1390

So I think the number people should really consider is $6110, which is still a significant amount no doubt.

Another thing to consider is mileage. If I'm paying for 10,000 miles annually on a lease I'd personally want to use every single one of those miles. It's like trying to return a pre-paid car rental tank of gas on fumes. I personally only put about 5000 miles per year on my cars thanks to lots of travel and a short commute. Others might struggle with potentially exceeding their allotted mileage and I have no idea what the extra mileage fee is on a lease.

Many moving parts overall and what's best is going to vary from person-to-person.

 

[DuoRivians]

Not quite.

Looks like the following fees are associated with a lease only but not a purchase:

Acquisition fee: $895
Disposition fee: $495

Total: $1390

So I think the number people should really consider is $6110, which is still a significant amount no doubt.

Another thing to consider is mileage. If I'm paying for 10,000 miles annually on a lease I'd personally want to use every single one of those miles. It's like trying to return a pre-paid car rental tank of gas on fumes. I personally only put about 5000 miles per year on my cars thanks to lots of travel and a short commute. Others might struggle with potentially exceeding their allotted mileage and I have no idea what the extra mileage fee is on a lease.

Many moving parts overall and what's best is going to vary from person-to-person.

Per the post’s title, the comparison I thought is between:

- Purchase v
- Lease and then exercise purchase option

If you exercise purchase option, there is no disposition fee, and miles don’t matter, since it’s your car ultimately anyway.

 

[yetti96]

Per the post’s title, the comparison I thought is between:

- Purchase v
- Lease and then exercise purchase option

If you exercise purchase option, there is no disposition fee, and miles don’t matter, since it’s your car ultimately anyway.

Yeah, I see the disposition fee as the "walk away fee". I liked the MF/interest rate as compared to buying and if the value tanks I can just walk away at the end. Mileage is my biggest issue, I just want to go drive the thing.

 

[Galve2000]

so when u lease the USD 7,500 is added back to the amount of the residual?

 

[fdon1]

I'm currently in the process of confirming my vehicle for the lease that I would otherwise not qualify for the ev rebate. Once I can talk to some at finance I will share the details here as well

Sponsored