Rivian Lease Option a win!

[Rade]

Just a note to folks on the fence about the Rivian lease option. We had learned of the leasing program through various YouTube channels. After speaking with a Rivian advisor and test driving an R1T, we went that route to obtain a customized R1T that we are slated to take delivery of at the end of November and we're pleased with the process and outcome.

On the Sales site, when you select a pre-configured vehicle, the carat at the bottom will open up and let you calculate your expected standard payment would be and what a monthly lease payment would be. The leasing option provided me with an opportunity to use the equity my current vehicle to see how that would offset the overall lease; it SUBSTANTIALLY lowered my monthly payments.

We went the custom build route, and other than the grand total on reserving our build, no other calculations were provided. I went to Edmunds.com. They have a lease calculator there, and I plugged in all the details I had. Edmunds gave me an acceptable monthly figure (which was sigh of relief to me). When our R1T entered production, I was asked to begin the finance processes. I applied for the lease; Rivian uses JPMC as a leasing company. What they came back for the final, monthly payment beat the Edmunds calculations by $25 a month! We also had our lease approval within a few hours.

I am glad we explored that option. It was quite painless and got us into a vehicle that would otherwise have been priced well out of our current finances.

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[Donald Stanfield]

I'm glad you got a good deal. I plan on leasing myself, as I learned about tax advantages in my state and the $7,500 capital cost reduction due to the lease loophole in the tax credit. I thought that you aren't supposed to put in extra money towards a lease. Maybe someone else here can clarify that for me.

 

[Rade]

I'm glad you got a good deal. I plan on leasing myself, as I learned about tax advantages in my state and the $7,500 capital cost reduction due to the lease loophole in the tax credit. I thought that you aren't supposed to put in extra money towards a lease. Maybe someone else here can clarify that for me.

There is a financial cap on how much cash you are permitted to bring to the table for a lease. I recall that was something along the lines of $20k or a quarter of the value of the vehicle. I had initially spoken with a Rivian CSR when I was sounding out the various options and suggest that I could sell my current vehicle and use pot of cash plus additional money, and I was advised there was that cap. Yes, others here might be able to offer more insight.

Rivian offered me a very fair trade for my 2019 Nissan Frontier; slightly better than Kelly Blue Book; considerably better than Carvana or Carmax.

So, trade + cash, and I offset the lease north of $22k.

I know a lot of folks who are lease-adverse (I was one of them), but the reality is - every car I have ever bought had car payments for x-number of years before I would align the finances to buy the vehicle outright. We generally try and hold onto our vehicles for a while. the 2015 Rogue (with 150k miles on it), my Frontier. With the 36-month lease, I can see those finances accumulating 3 years from now to enable me to buy the R1T outright when the lease is nearing termination. The lease offers a lower interest rate and a smaller payment until such a time comes around.

We also... observe. I have yet to watch a YouTube video or read a blog that was absolutely adverse to Rivian. Sure, there are one or two, but on the whole, not bad reviews! For the time being, the company is solid and is making good, quality vehicles with very comprehensive warranties. I can see the long haul for me with the R1T.

 

[TwelveVoltMan]

One point about putting money down on a lease: if you drive the vehicle off the lot, get into a wreck, and the vehicle is totaled, you’re out the money that you prepaid on the lease.

I understand that cash flow and monthly payments can be as important as the overall cost of the vehicle. Consider putting no money down, placing the money you would have used as a down payment into an interest bearing account, and supplementing your monthly payments with it.

 

[ThirteenElectrics]

Leasing is great downside protection. Imagine you bought the car, then in two years everyone moves to the Scout and it becomes the new hotness. You may lose thousands of dollars on resale. You can, of course, drive the car into the ground if you wish, but I prefer to have the warranty coverage, and I also move into new cars fairly regularly to take advantage of new safety features (like LIDAR, which is coming to Volvos and Polestars) and extended range for long trips.

 

[Hereforthesnacks]

One point about putting money down on a lease: if you drive the vehicle off the lot, get into a wreck, and the vehicle is totaled, you’re out the money that you prepaid on the lease.

I understand that cash flow and monthly payments can be as important as the overall cost of the vehicle. Consider putting no money down, placing the money you would have used as a down payment into an interest bearing account, and supplementing your monthly payments with it.

Yeah, I wouldn’t put that much down on a lease.

Plus, it’s near impossible to really know if you have a good lease without all the details from money down, to miles, to money factor, to residual. It’s really easy to make it look like a great deal. Not saying you are getting a worse deal than you think, but we have no way to tell.

 

[Schroederhc]

One of the best things about a lease is you can walk or buy at the end.

 

[Rivdog]

One point about putting money down on a lease: if you drive the vehicle off the lot, get into a wreck, and the vehicle is totaled, you’re out the money that you prepaid on the lease.

I understand that cash flow and monthly payments can be as important as the overall cost of the vehicle. Consider putting no money down, placing the money you would have used as a down payment into an interest bearing account, and supplementing your monthly payments with it.

This is the way.

 

[Donald Stanfield]

I will be leasing for the first time and I’m using my ‘22 R1T that’s paid off as a trade in. I’m of the understanding that I can use the trade as the required down payment and they will cut me a check for the rest of the trade in value correct?

 

[CompilerBreak]

The lease 'deal' comes down to length of the lease, the rent charge/money factor, and residual value. (you should probably share those values so future folks can compare) Paying more toward the lease upfront doesn't necessarily net you better overall terms. However, between the tax credit and recent offers the lease has been a much better deal than financing, but that isn't always the case.

 

[hammick]

You would think Rivian would make it a lot easier to figure out their lease figures, especially since the deposit is non-refundable. If we get an R1S I would want to lease for the tax credit then immediately buy out the lease if it saves a few thousand vs making lease payments. Or keep the cash invested or with CIT Bank at the current 4.7% until rates drop to the point where it makes more sense to pay it off.

If the tax credit goes away and/or elon gets emboldened that he can back out of his supercharger expansion obligations under NEVI I don't see a Rivian in our future sadly.

 

[Spaceball1]

Your arithmetic is off. It’s not 2021 anymore when EVs held their value. Many early adopters of Rivians bought because…that was the only choice. They didn’t launch leasing until later on (mid-2023 I think?). And then when they hiked pricing (March 2022) those with pre-price hike locked in, and binding agreements for fed tax credits, the numbers made sense to buy.

I bought mine used in Feb 2023 for at the time a decent deal and cancelled my post-hike order because I wasn’t confident the binding agreement stuff would work out with the IRS. I’m now upside down on it about $15k (I do have some decent miles). Pretty sure I’m locked into this truck for more than a few more years, so no trading up to a Gen 2 or maybe Gen 3 even.

Regardless, if you’re looking to keep a car long-term, say 6 years or more, buying may make more sense. Otherwise leasing is a safer bet (and much lower monthly payments). You’re more protected for the current rapidly declining resale values of EVs, especially a high priced luxury EV.

 

[Donald Stanfield]

Depending on your state leasing can be way cheaper. In my state of TN leasing assesses your taxes based on your payment not the purchase price of the truck. That plus the 7k dollar tax credit I wouldn’t otherwise qualify for makes it almost 20k cheaper for me to lease than to buy.

Not only that but you’re protected from depreciation and major technological advances. EVs are a new tech and suppose solid state batteries or some other transformative tech comes out in the next 3 years during the course of your lease. That will tank the values of your vehicles.

You have the option of buying out the lease immediately if you so choose which still gives you that 7k you wouldn’t otherwise get. Maybe if Rivian was offering 0% financing it would make sense to buy but they aren’t.

 

[Electrified Outdoors]

Leasing is a very attractive option for sure especially if you’re concerned about depreciation.

Do the figures on their lease calculator include state sales tax? I have a fairly basic calculator I use that works well. The site I use also has a finance calculator that also shows the amortization table. This is very helpful when trying to compare the cost to own vs lease over the same period. Only problem is nobody knows what kind of depreciation we will see three years from now.

I would most likely lease when the time comes also.

one note about leasing. Typically when a car maker deals a lot of leasing it can cause depreciation issues down the line. That’s because most of those will wind up on used market after the 2-3 year lease term. Rivian not producing a ton of vehicles right now though so the effect may not be significant.

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