Lease vs Purchase

[RivAW]

Respectfully, that is narrow-minded as it doesn't consider the many reasons why someone would want the vehicle but not want to drive it for "hundreds of thousand of miles", keep it past the warranty period, lock themselves into today's technology which is rapidly evolving. Additionally, plenty of data also exists that EV's depreciate at a significantly higher rate than ICE vehicles which is problematic if you don't intend to keep the (EV) for a long period of time.

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[RivAW]

I had done years of research and knew I wanted the Rivian R1T. When the 2nd Gen came out, I placed the order and entered in with a lease; the expectation that I would buy out the vehicle when the lease came to term. Financially, I am retired and have investments and savings; figured I could bank the buyout on the lease and invest it for the three years on the note. Then about 4 months in (March of this year), the markets became wildly volatile, and I began to see my portfolio drop. I pushed the button and requested a payout on the lease and bought my R1T outright. I do not regret the effort.

Leasing got me into the vehicle for a much lower monthly payment than financing (even with a substantial down payment). The buyout actually came in less by several thousand dollars than what was stated in the lease agreement. My only hit came with the state Sales tax at the time of transferring the title and registration from JPMC to me, but again, I had that banked. It also got me a lower auto insurance premium.

In September, my husband just began a lease on a Tesla Model Y. It is his daily driver to get back and forth to work (about 70 miles a day, he has several years before he hits retirement). We have a reservation in on a Rivian R2S, and his idea is to run the MY to term of the lease then go into the Rivian; by then the architecture will be a little more "baked in"; perhaps into a gen refresh. And yes, we had looked hard into the R1S, but it is just WAY more vehicle than either of us would ever need.

There is something missing from your story. An early lease buyout is generally the sum of the remaining contracted payments, plus the defined residual value. It's pretty much set in black and white. If you saved "thousands" it was likely illusory because you wouldn't pay the part of the remaining payments attributable to taxes....which you end up paying when you transferred title and registration.

 

[Ilovejunebugs]

I'd like to at least have the option to lease, but alas no go here in the frozen tundra (Wisconsin)....

 

[DD4ST]

There is something missing from your story. An early lease buyout is generally the sum of the remaining contracted payments, plus the defined residual value. It's pretty much set in black and white. If you saved "thousands" it was likely illusory because you wouldn't pay the part of the remaining payments attributable to taxes....which you end up paying when you transferred title and registration.

I agree. The lease is pretty cut and dried. Now if Chase was cutting deals, that would be a story unto itself.

Also, I think using short-term market volatility as an excuse to buy out the lease was short-sighted.

 

[slillie]

Personally, leasing made no sense for me. I ran the numbers forwards and backwards. Besides, now that interest on new vehicles is tax deductible, leasing makes even less sense.

 

[DD4ST]

Personally, leasing made no sense for me. I ran the numbers forwards and backwards. Besides, now that interest on new vehicles is tax deductible, leasing makes even less sense.

Each case is different and lease terms aren’t always favorable. That is why I stressed one needs to do your homework. Curious, though. Is the interest tax deduction a state thing?

 

[RivAW]

Personally, leasing made no sense for me. I ran the numbers forwards and backwards. Besides, now that interest on new vehicles is tax deductible, leasing makes even less sense.

• Income Limits: The deduction begins to phase out for single filers with a Modified Adjusted Gross Income (MAGI) over $100,000 and for married couples filing jointly with a MAGI over $200,000.
• Deduction Limit: You can deduct a maximum of $10,000 in interest paid per year

 

[Electron-NY2CA]

New to the Rivian family. Leased a 2025 R1T last month. Enjoying the truck. Missed sitting up high. Traded in my 2021 Tesla Model S. Been reading some of the forums here before jumping ship into Rivian. Mainly customer service reports which were fairly positive and a big plus for me. Happy to be here.

 

[M3_R2]

Not that it applies to most here but leasing isn't an option in the configurator on Rivians in Canada.

If you are taking money out of high yield investments to buy one, leasing always makes more sense, at least on paper, till you want to make modifications or take off road, etc.

Leasing a luxury vehicle might be a smart lease path but on something you will use and abuse and want to make changes to, I'd be inclined to buy or if interest rates were favourable, finance.

I would have a hard time not being able to make changes to an R1T. Taking one for a test drive in the near future but just for fun. They aren't an option up here while tariffs are in effect.

 

[jakasspeech15]

Most of the best accessories for the R1T are bolt-on/bolt-off anyway (racks, tent, mats). You get the utility without the long-term commitment. Seems like the smart play for 2025.

 

[dduffey]

I'd like to at least have the option to lease, but alas no go here in the frozen tundra (Wisconsin)....

Same, in Texas you pay full sales price/FMV sales tax twice, once for the lease and again for the buyout. Of course dealers can sweeten the deal with offers to pay sales tax at lease or buyout, but that's no different than other discounts and offers for purchasing outright, in the end the tax is paid even if the buyer "doesn't feel it.

Also in Texas if I were to trade in, I get to reduce taxes on the new vehicle by the FMV of the trade-in, making leasing look extremely unattractive here.

In my case, approaching 4 years even with depreciation (and also not counting double taxation), I've clearly came out ahead looking at today's rates and FMV (but leasing was not an option in 2022 anyway).

 

[mudito]

I'm new to this thread...first post, but looking for some feedback. I've been test driving several EV SUVs to include the Lucid Gravity, Hummer EV, and of course a few different Rivians. I've narrowed my interest to the Rivian Quad and put a deposit on one being delivered in a few weeks.

As I finalize my financing decision, I need to decide between leasing vs purchasing. I know the pros/cons of each, but my question is really around the projected value of these vehicles in 3 years (if I were to leave the lease or buy the vehicle then) and 5 years (if I were to purchase the vehicle and then decide to trade in for something else). There's also the concerns around Rivian's valuation/longevity, whether or not parts will be available down the road if an accident warranted replacement parts, and so forth.

Any thoughts on leasing for 3 years and potentially buying an R1S at the end of the lease, walking away from the lease to get something else, or purchasing the vehicle from the start?

https://travisketchum.com/lease-vs-buy/
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