Leasing a Jeep Gladiator

[Tortooga Custom Works]

Thats a statement I don't understand.


Both are forms of borrowing? I can understand financing, def of (my interpretation only)

"Borrowing money from some entity to finance a purchase with the end result of full ownership of an item".

But leasing is basically renting something long term.

After the term ends the renter or leasee no ownership or equity in that item.

And the item has to be returned in a pre stated condition or is subject to further charges.. like the guy who at 30 months has to park a vehicle that has 36 thousand miles on it, and walk for 6 months to not add any moremiles before the turn in. Yep I met a guy that did just that......

But hey I get involved everyday with leased aircraft so I do know what leasing is intimately....

Yes. Both are forms of borrowing.

You require possession of an item. You don't have the full purchase price of said item, so you can either:

a) Finance: Borrow the full purchase price from someone in order to use the item, and ultimately own that item after a specified period of time. It's important to note that the item does not actually belong to you. The someone who lent you the money owns it, until you finish paying them back. Not only have you borrowed money, but you've also borrowed the item for a period of time, until it is yours.

b) Lease: Borrow a portion of the purchase price as part of an agreement to just possess and use the item for a specified period of time. This is not an agreement for ownership, just use. Although you don't own the item, you still benefit from the ability to possess and use said item. So, similar to option (a), you have borrowed money because you have an arrangement to pay back money to someone, and you've also borrowed the item because it does not belong to you.

c) is worth mentioning. It is cash $$. You don't borrow at all and just give someone the value of the item in cash - you are now in possession of the item, you can use it, and you actually own it.

Purchasing aircraft works exactly the same way. The only additional stipulation on an aircraft is maintenance, which you can't really get out of because of regulatory concerns. You can either borrow the full purchase price and pay for the whole thing, lease by making an agreement for use over a certain period of time, or just buy the plane outright.

As for the overages on mileage in a lease... I've met folks like that too.
If you use a leased plane longer (time or miles) than you originally planned, will you not owe more money?
It's logical that an agreement like this, of use, rather than ownership, would have some kind of stipulation on how you use it.
This is why initial research and math is so important. How much do you drive? Can you plan for potential issues? For example, a few leases ago, my car, which I owned outright, was in the shop for 6 months getting a new motor, turbo, and all kinds of goodies - I didn't actually plan for it to take that long, so we went over on miles with my wife's lease. Did I care? Maybe a little, but I'd been tracking them in a spreadsheet from the beginning, so I was fully aware of how much I was going to have to spend. From almost a year prior to the end I was setting money aside for that overage.
It didn't really bother me to pay it - why? Because I used that vehicle more than I originally intended to, and in my case, it only cost me about $0.25/mile. Would I have been able to get a rental or other car for that? Nope. Not at all.
That works for us - but again, it might not work for you, or others.

The point, again, is, research, research, research, math, math, math. Other people's ideas, opinions and experiences, are not at all enough for someone else to make a decision for themselves. Without a good understanding of your income, spending habits, concerns, etc - I can't tell you that leasing, financing or purchasing with case is right/wrong for you. What I can say is, they are all perfectly good options depending on your individual circumstances. Each person needs to do their own research to decide which one is the best option for their circumstances.

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[Tortooga Custom Works]

Of course there's more than one leasing thread ... lol... but here's a good point - technically, there have been some good points in this thread too, they're just buried in pages lol

Yeah people who tell you that are ignorant about how it works. Leasing is not renting. You ARE making progress toward equity with each lease payment you make. You're basically paying for the portion of the vehicle you're expected to use during the term of the contract. It's like eating two bites of a burger and only having to pay for those two bites.

Most of the time you're buyout at the end will line up with the residual value on the contract. I wouldn't go into a lease expecting the bank to negotiate based upon actual value at the end. That's unlikely to happen unless it's in THEIR favor.

 

[trez63]

Thats a statement I don't understand.


Both are forms of borrowing? I can understand financing, def of (my interpretation only)

"Borrowing money from some entity to finance a purchase with the end result of full ownership of an item".

But leasing is basically renting something long term.

After the term ends the renter or leasee no ownership or equity in that item.

And the item has to be returned in a pre stated condition or is subject to further charges.. like the guy who at 30 months has to park a vehicle that has 36 thousand miles on it, and walk for 6 months to not add any moremiles before the turn in. Yep I met a guy that did just that......

But hey I get involved everyday with leased aircraft so I do know what leasing is intimately....

Check it. My NSX is a $200k car. I’m leasing it and writing off a big chunk, but even if I didn’t. It has depreciated about twice what the schedule is. If I had bought it, by the end of the 3rd year, I would have paid $17k in tax, and the car would be worth $90k.
On a lease, I pay $60k for the three years of ownership (tax included).

So in one case my total damage is $110k vs lease $60k. The math is pretty simple.

Also. If I crash it, god forbid, my gap insurance will take the car and we’ll be done. But if I had owned it, I’d end up having to deal with a crashes supercar. Fun. The tax is the bit that bothers me the most.

We’re also in a funny time right now automotively speaking. ICE vehicles are on their way out and depreciating faster than usual but the leases don’t yet reflect that. Cars are changing so fast with new hybrid drive tech. Selling a used car after 3 years will be painful especially if gas prices keep this trend.

But back to the point you’re stuck on.

“Financing” is a loan for the full value of the vehicle and full tax.
“Leasing” is a loan for just the depreciated value and the taxes in that portion only.

If you drive a lot of miles (I don’t) leasing won’t pencil out. But most manufacturers will forgive all your miles if you sign another lease with them. We’ve done it about a dozen times now.

In the end you gotta do what your comfortable with. But leases are not the horrible financial decision you have made it out to be.

 

[Dietruck]

Thats a statement I don't understand.


Both are forms of borrowing? I can understand financing, def of (my interpretation only)

"Borrowing money from some entity to finance a purchase with the end result of full ownership of an item".

But leasing is basically renting something long term.

After the term ends the renter or leasee no ownership or equity in that item.

And the item has to be returned in a pre stated condition or is subject to further charges.. like the guy who at 30 months has to park a vehicle that has 36 thousand miles on it, and walk for 6 months to not add any moremiles before the turn in. Yep I met a guy that did just that......

But hey I get involved everyday with leased aircraft so I do know what leasing is intimately....

I can clearly see you have no clue what your talking about. You just like to spread untrue statements based on what others have told you.

Leasing is not renting. You are paying for only the equity you are using. You still get equity out if the value is more than you paid in.

Leasing is just a loan with a balloon payment at the end. The mileage rules and other rules are not because you don't own the car. It is because there is a set value at the end of the term.

Again you have no idea what your talking about. Start supporting your comments with numbers and we can have a real conversation that is helpful.

 

[Dietruck]

Check it. My NSX is a $200k car. I’m leasing it and writing off a big chunk, but even if I didn’t. It has depreciated about twice what the schedule is. If I had bought it, by the end of the 3rd year, I would have paid $17k in tax, and the car would be worth $90k.
On a lease, I pay $60k for the three years of ownership (tax included).

So in one case my total damage is $110k vs lease $60k. The math is pretty simple.

Also. If I crash it, god forbid, my gap insurance will take the car and we’ll be done. But if I had owned it, I’d end up having to deal with a crashes supercar. Fun. The tax is the bit that bothers me the most.

We’re also in a funny time right now automotively speaking. ICE vehicles are on their way out and depreciating faster than usual but the leases don’t yet reflect that. Cars are changing so fast with new hybrid drive tech. Selling a used car after 3 years will be painful especially if gas prices keep this trend.

But back to the point you’re stuck on.

“Financing” is a loan for the full value of the vehicle and full tax.
“Leasing” is a loan for just the depreciated value and the taxes in that portion only.

If you drive a lot of miles (I don’t) leasing won’t pencil out. But most manufacturers will forgive all your miles if you sign another lease with them. We’ve done it about a dozen times now.

In the end you gotta do what your comfortable with. But leases are not the horrible financial decision you have made it out to be.

Love the added point about ICE. I believe the same thing. It is another reason why leasing makes more sense now then ever. I don't want to take the bath when ICE car values take a dive. The cliff is coming. ICE is on the way out and electrical is still too new. In 3 to 5 years the market will be completely different.

Even if you never want an electric car. The smart money is buying used or new ICE'S after the cliff.

 

[furrymurray]

Your never going to out think a successful investment banker....

And you know this how?

 

[trez63]

And you know this how?

LOL. That's what I'm saying.
And what makes him think the loan he's getting on his car isn't being designed by the same "successful investment banker"?

It's funny, people are okay with taking out a mortgage to buy a home which is perhaps the worst possible terms for a loan ever devised by man. The amortization schedule on a home loan is designed such that you never pay it back. The first 10 years are basically all interest and you're likely to either sell the home or refinance and reset the clock again. But people are just conditioned to think that's a good deal and leasing a car is a bad deal. It's a tragic misdirection those "successful investment bankers" pulled off.

 

[steffen707]

Contacted a local dealer, was told, "Generally on a vehicle like this the residual is going to be roughly the same across the board. (rubicon vs sport ) As a whole though, the residual are usually better on the higher trims because the market is less flooded with the higher trims then the lower ones."

He said the 2 yr residual was 74%, 3 year was 70% on an overland. Dang, all those articles about 90% residual on Sport surely got me excited, now as the bait and switch sets in, i'm using my MATH brain and having trouble figuring out what I need to do. a 16% reduction in residual in a matter of days makes me One Sad Panda.

BAH!

 

[Chance_P]

Right now, 36/15 residuals are... Overland/Rubi 68, sport s 79 and sport 73 and STD MF.

 

[steffen707]

Right now, 36/15 residuals are... Overland/Rubi 68, sport s 79 and sport 73 and STD MF.

What does 36/15 mean?

What does std MF mean?

I asked my local guy, he confirmed 79% residual in Wisconsin.

@Chance_P can you tell me if residuals change from region to region?

 

[Kdmerchant]

How do modifications (ie wheels, bumpers, lift kits) work with a leased vehicle, assuming nothing is done that would void the warranty? Do folks generally return it to stock if they do not keep it? Apologies if it's covered elsewhere.

 

[Chance_P]

What does 36/15 mean?

What does std MF mean?

I asked my local guy, he confirmed 79% residual in Wisconsin.

@Chance_P can you tell me if residuals change from region to region?

36month 15k miles a year. These are Chrysler Capital mumbers. I got them in a screen shot from a dealer.

I believe the standard practice is 2% RV change for 10/12/15k miles. I have never leased before, always brought my own financing, but I am exploring it with the Gladiator as I have never spent more than 25k on a vehicle.

 

[steffen707]

OHHH, yeah i'm looking at 24/10 or 36/10, i've also never leased, but may with this one.

36month 15k miles a year. These are Chrysler Capital mumbers. I got them in a screen shot from a dealer.

I believe the standard practice is 2% RV change for 10/12/15k miles. I have never leased before, always brought my own financing, but I am exploring it with the Gladiator as I have never spent more than 25k on a vehicle.

 

[Chance_P]

How do modifications (ie wheels, bumpers, lift kits) work with a leased vehicle, assuming nothing is done that would void the warranty? Do folks generally return it to stock if they do not keep it? Apologies if it's covered elsewhere.

Usually that is what people do, and then sell off the mods.

 

[Dietruck]

Right now, 36/15 residuals are... Overland/Rubi 68, sport s 79 and sport 73 and STD MF.

My rough math was pretty close. Now I need to wait for a ship date so the real numbers can be worked.

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