Leasing a Jeep Gladiator

[spenchey]

Taking these same numbers, what if I decide I want to keep the gladiator? What would it cost me? How do I get the numbers to work in my favor vs financing to begin with?

Would depend on residual % at the time of delivery. I'm not sure what you are really asking on that second question there. I think leasing is great idea no matter what you plan to do at the end of the lease, alot of flexibility keep it, keep it and sell it, keep it and trade it, lots of options with a lease regardless of what you plan to do with it when you're done with the lease contract.

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[Onebigyoshi]

Would depend on residual % at the time of delivery. I'm not sure what you are really asking on that second question there. I think leasing is great idea no matter what you plan to do at the end of the lease, alot of flexibility keep it, keep it and sell it, keep it and trade it, lots of options with a lease regardless of what you plan to do with it when you're done with the lease contract.

OK, I'm not sure if you can answer this but if you can it would greatly help my decision to lease or finance. Which is the CHEAPER option. 1) leasing a jeep on YOUR terms, I buy it at the end of the term, and keep it, Or 2) 100% finance the jeep for 6 years using Chrysler bank interest rate and keep it. In both scenarios, I may eventually sell it after owning it for 5 or 6 years.

 

[spenchey]

OK, I'm not sure if you can answer this but if you can it would greatly help my decision to lease or finance. Which is the CHEAPER option. 1) leasing a jeep on YOUR terms, I buy it at the end of the term, and keep it, Or 2) 100% finance the jeep for 6 years using Chrysler bank interest rate and keep it. In both scenarios, I may eventually sell it after owning it for 5 or 6 years.

Thats sorta like asking me if I have a crystal ball and can tell you the future.

If gas goes to $4/gal a Gladiator is going to be worth alot less than if gas goes to sub-$2/gal. Or if our economy slows down, etc etc etc its bascially endless, see my point?

This is why I have my family always lease everything first. Say gas goes to $6/gal that gladiator will be super cheap on the used market. Lease it, if gas goes to $6/gal, walk away from your lease at the end and if you don't care about the gas mileage and still love the gladiator you can go to the used market and likely find one with less miles and more equipment that is cheaper than your buy out.

Say gas goes to $2/gal and the gladiator is the most popular vehicle on the face of the planet, AKA these things are worth their weight in gold. Then buy your lease out and keep driving it or sell it put some money back in your pocket.


I'm hoping you see my point as to why I always lease, its not payment its position you are in at the end of lease

 

[Dietruck]

OK, I'm not sure if you can answer this but if you can it would greatly help my decision to lease or finance. Which is the CHEAPER option. 1) leasing a jeep on YOUR terms, I buy it at the end of the term, and keep it, Or 2) 100% finance the jeep for 6 years using Chrysler bank interest rate and keep it. In both scenarios, I may eventually sell it after owning it for 5 or 6 years.

I posted this before on this thread. It might help you.

"
Dietruck said: ↑
It me put it another way. If you did a 3 year lease and took the payment savings and put in the bank instead.

If you decide at year 3 you wanted to keep it you take that bank money as a down on a new loan. You extra cost will be in the hundreds. It could be only a couple hundred or less once you account for the interest you could get.

If you decide you want out. You can turn the car in and use the money in the bank as a down for what you want. Due to not paying sale tax on the whole car. Your savings is in the thousands. (I am in PA with 6% sales tax)

So you need to balance the likely hood of keeping it and spending a few extra hundred. Vs. getting something else and saving a few thousand.

Do the numbers. Be realistic. It will surprise you."

 

[Onebigyoshi]

Thats sorta like asking me if I have a crystal ball and can tell you the future.

If gas goes to $4/gal a Gladiator is going to be worth alot less than if gas goes to sub-$2/gal. Or if our economy slows down, etc etc etc its bascially endless, see my point?

This is why I have my family always lease everything first. Say gas goes to $6/gal that gladiator will be super cheap on the used market. Lease it, if gas goes to $6/gal, walk away from your lease at the end and if you don't care about the gas mileage and still love the gladiator you can go to the used market and likely find one with less miles and more equipment that is cheaper than your buy out.

Say gas goes to $2/gal and the gladiator is the most popular vehicle on the face of the planet, AKA these things are worth their weight in gold. Then buy your lease out and keep driving it or sell it put some money back in your pocket.


I'm hoping you see my point as to why I always lease, its not payment its position you are in at the end of lease

I should have been more clear. I didn't mean to include gas and other variables that's impossible to predict accurately but I do get your point.. You have way more options to play with at the end of lease term vs if you finance. I believe I misread your first reply when you said residual % is calculated at delivery. So this residual % is calculated at the end of the lease, and not when I drive off the lot? Sorry there's so many variables to consider when leasing and I know someone personally that got screwed with their lease deal because that person didn't do their homework before going in to the dealer. Of course I'm sure the experience will be different if I was working someone like you

 

[spenchey]

I should have been more clear. I didn't mean to include gas and other variables that's impossible to predict accurately but I do get your point.. You have way more options to play with at the end of lease term vs if you finance. I believe I misread your first reply when you said residual % is calculated at delivery. So this residual % is calculated at the end of the lease, and not when I drive off the lot? Sorry there's so many variables to consider when leasing and I know someone personally that got screwed with their lease deal because that person didn't do their homework before going in to the dealer. Of course I'm sure the experience will be different if I was working someone like you

The residual percentage is known at the time of delivery but since the percentage can change between now and when you take delivery your dollar amount for your buyout is unknown until the time of delivery. When you sign your paper work you'll know the dollar amount buyout

It has more to do than just gas prices that was just my over simplified example of the millions of things that may reflect the value of gladiators at the end of the lease. Final value could be influenced by consumer taste (maybe people start liking cars alot more than they do now, maybe the ford bronco becomes a real threat to new gladiator buyers) maybe jeep comes out with an amazing new option that make the used gladiators alot less valuable than a new one, maybe an unknown competitor comes out with something alot cheaper or alot better. The list here is end less, which is my point. You can run the numbers all day long to determine which is cheaper by your known inputs, but one qualitative (or hard to model quantitative) factor changes it could mess up all your known quantitative inputs.

As a dealer do I care which way you go? No, it doesn't make a single difference to me.

As an individual with money to spend on a vehicle, this is my personal opinion and reasoning on why my money goes to a lease

 

[Chance_P]

I did the math on my build. Basically 47k purchase price. If I do a 3 year lease and then a 3 year loan, vs a 6 year loan, assuming all variables stay constant between now and 3 yrs from now, it will cost me an (estimated) extra 5k. My payments will be about $200 less during my 3 years of lease vs the 6 year loan payment. The 3 yrs of loan payments on the lease then loan option will be $225 more than my 6 year loan payments.

5k over 6 years is about $70 a month.

There are a lot of advantages to leasing then purchasing, it's up to you to decide if those advantages are worth the extra $70 a month. (At least in my scenario)

 

[Onebigyoshi]

The residual percentage is known at the time of delivery but since the percentage can change between now and when you take delivery your dollar amount for your buyout is unknown until the time of delivery. When you sign your paper work you'll know the dollar amount buyout

It has more to do than just gas prices that was just my over simplified example of the millions of things that may reflect the value of gladiators at the end of the lease. Final value could be influenced by consumer taste (maybe people start liking cars alot more than they do now, maybe the ford bronco becomes a real threat to new gladiator buyers) maybe jeep comes out with an amazing new option that make the used gladiators alot less valuable than a new one, maybe an unknown competitor comes out with something alot cheaper or alot better. The list here is end less, which is my point. You can run the numbers all day long to determine which is cheaper by your known inputs, but one qualitative (or hard to model quantitative) factor changes it could mess up all your known quantitative inputs.

As a dealer do I care which way you go? No, it doesn't make a single difference to me.

As an individual with money to spend on a vehicle, this is my personal opinion and reasoning on why my money goes to a lease

Thank you, that was very helpful. I can't believe I'm saying this but I'm starting to lean towards to leasing as well. I told my brother a few weeks ago that I would never lease lol

 

[Onebigyoshi]

I did the math on my build. Basically 47k purchase price. If I do a 3 year lease and then a 3 year loan, vs a 6 year loan, assuming all variables stay constant between now and 3 yrs from now, it will cost me an (estimated) extra 5k. My payments will be about $200 less during my 3 years of lease vs the 6 year loan payment. The 3 yrs of loan payments on the lease then loan option will be $125 more than my 6 year loan payments.

5k over 6 years is about $70 a month.

There are a lot of advantages to leasing then purchasing, it's up to you to decide if those advantages are worth the extra $70 a month. (At least in my scenario)

Yes! Thank you this was exactly something I was trying to figure out. How much more will the lease cost me over financing if everything else was constant. One thing I found out from @Dietruck is sales tax is excluded in lease deal. Did you include or exclude sales tax in your lease calculation?

 

[spenchey]

Thank you, that was very helpful. I can't believe I'm saying this but I'm starting to lean towards to leasing as well. I told my brother a few weeks ago that I would never lease lol

I see alot of customers scared of it because most dealers can not explain it in a way that makes sense to 99% of customers

 

[Chance_P]

Yes! Thank you this was exactly something I was trying to figure out. How much more will the lease cost me over financing if everything else was constant. One thing I found out from @Dietruck is sales tax is excluded in lease deal. Did you include or exclude sales tax in your lease calculation?

LOTS of variables. But I did my calculations based on my state (IA) sales tax. 5% of purchase price for financing and with lease it's 5% of the depreciation over the lease split up in monthly payments. I then calculated 5% of my residual and added it to my 3 years of lease plus the cost to finance the residual

 

[Onebigyoshi]

I see alot of customers scared of it because most dealers can not explain it in a way that makes sense to 99% of customers

You're absolutely right. And some dealers won't take their time to try helping customers understand. Thank you for contributing to this forum. When I'm looking for a lease deal or have any other questions, I will definitely contact you

 

[Onebigyoshi]

LOTS of variables. But I did my calculations based on my state (IA) sales tax. 5% of purchase price for financing and with lease it's 5% of the depreciation over the lease split up in monthly payments. I then calculated 5% of my residual and added it to my 3 years of lease plus the cost to finance the residual

My brain is firing on all cylinders today, I actually understood what you did in your calculation. Thanks!

 

[Dietruck]

Yes! Thank you this was exactly something I was trying to figure out. How much more will the lease cost me over financing if everything else was constant. One thing I found out from @Dietruck is sales tax is excluded in lease deal. Did you include or exclude sales tax in your lease calculation?

The sale tax is a big savings. You still pay some but it is done per a payment instead of the whole car. I posted an example math on this thread if you want to see it.

 

[steffen707]

Yes! Thank you this was exactly something I was trying to figure out. How much more will the lease cost me over financing if everything else was constant. One thing I found out from @Dietruck is sales tax is excluded in lease deal. Did you include or exclude sales tax in your lease calculation?

When you lease, you only pay sales tax on the amount of the depreciation on the vehicle. Like 20-34% typically and you pay a little bit each month. When you buy and do a traditional 60-72 month loan, you pay sales tax on the whole amount up front.

Maybe I'm wrong, but sales tax on cars is bullshit. You buy a car for 40k, pay 5% tax on it, then sell it private party for 30k, the used buyer is supposed to then pay tax on the 30k, they sell it for 10k, new buyer pays tax on that whole amount.

So a car worth 40k,generates 80k of sales tax base....... Makes no sense to me.

Now I've never sold a vehicle worth more than $10,000, but is there something like a 1031 exchange if you sell and buy a car within a certain time frame?

Last question, when you trade in a vehicle, doesn't the sales price of the new vehicle you buy get reduced by the trade in value? Thus reducing your sales tax on the new purchase?

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