steffen707
Well-Known Member
- Joined
- Jan 28, 2018
- Threads
- 204
- Messages
- 8,620
- Reaction score
- 8,916
- Location
- Middle Wisconsin
- Vehicle(s)
- 2001 Jetta TDI RIP, 89' Civic SI, 2019 Pacifica Hybrid, 2020 GLADIATOR SPORT S "GLADYS"
- Thread starter
- #1
Background:
It all started when I was conceived in the back of a plywood truck,
wait that’s like too much background.
Recent Background:
I ultimately want a Gator Rubicon, but because I recently bought a new minivan for the wife with all the bells and whistles last Fall, it’s not financially responsible to commit to an additional payment like that within the next 2 years. My income fluctuates too much. So actually buying cash, or conventional financing ANY JT right now is NOT an option for me. (so please don't suggest, just a waste of time)
I've started considering getting a lease for 2-3 years so I can test the waters and decide if this Jeep life is for this guy. At first I thought of just getting a sport or sport S because it would cost less, but then my wife said, "Lease a Rubicon so you know if the Rubicon is the truck you want to buy in 2-3 years when the lease is up". Afterall, i've never done overlanding, rock crawling, mudding (with my own vehicle).
So i dunno, maybe this city boy just needs a Sport S or Overland...... or maybe I’ll love the rugged outdoor life ( I am an Eagle Scout afterall and spent many days/nights in nature)
So I started looking at leases and what I think I discovered is this.
My understanding of how a lease works:
You can still negotiate the Cost of the vehicle you’re buying, so tread lightly and 5-7% off invoice can still apply. What FCA does is assign a “residual” value to the vehicle you want to buy at time of lease. (MORE ON THIS LATER) This is a % less than 100%. Think of it as the value left in the vehicle when your payments are over. So your payments are based on the“depreciation” of said vehicle. (100%-Residual%) I was recently quoted about 79% residual for a sport S. @Dietruck explained the % off is
There is also some kind of interest type thing/financing fee that’s rolled into the lease (IS THIS TRUE?) and each payment includes state and local tax, you don't pay for all of the sales tax up front like when you buy with conventional loan. You only pay sales tax on the portion you consume.
One dealer said their dealer fee is rolled into the lease payments, and the destination fee is rolled into the purchase price $1495 MSRP I believe. One dealer told me there was a $650 “acquisition fee” that the leasing company tacks onto the amount financed through the lease. Another dealer said their acquisition fee this month for them is ZERO, but that could change tomorrow.
Calculations 1: I did it this way first, then @Dietruck explained my calculations were off.
So, I would basically be paying 21% (100%-79% residual) of the negotiated sales price (invoice of vehicle and add-ons plus destination * 95% (with 5% below invoice with tread lightly dealer) plus dealer fee and acquisition fee / 24 payments).
So if invoice plus destination is $43,932 * 95% * 21% = $8,764 + dealer fee $75 + $0 Acquisition cost = $8,839.
This is for a 24 month and 10,000 mile per year lease. So $8653 / 24 = $368 *1.055 (sales tax) = $388…………but I was quoted like $425.
So I’m not sure where the other $36 per month came from, I’m guessing that’s the cost of the lease, like interest on a loan. (IF YOU KNOW PLEASE INFORM ME WHY MY MATHS ARE OFF)
Calculations 2: I feel like my calculations are still off.
So, I would basically be paying 21% of MSRP (100%-79% residual) less the 5% off Invoice with tread lightly dealer) plus dealer fee and acquisition fee / 24 payments).
So if MSRP plus destination is $45,660 * 21% = $9,588 + dealer fee $75 + $0 Acquisition cost = $9,663.
5% of invoice on this spec sheet was about 8.6% of MSRP is $3,926.
This is for a 24 month and 10,000 mile per year lease. So $9,588 - $3,926 / 24 = $235 *1.055 (sales tax) = $248…………but I was quoted like $425
So I’m not sure where the other $177 per month came from, I’m guessing that’s the cost of the lease, like interest on a loan. (IF YOU KNOW PLEASE INFORM ME WHY MY MATHS ARE OFF)
Calculations Conclusions:
This stuff gets so confusing, especially if you don't have a real example to work off of. I apologize if my math is way off for anybody trying to follow my footsteps. Probably easiest to do this, BUY FROM A DEALER THAT WILL GIVE YOU THE MOST OFF INVOICE AND LOWEST DOC FEE, THEN CALL IT A DAY. lol
The Residual Problem:
The problem is that if you order a JT today and negotiate a sweet 5-7% below invoice with all of the mods you’ve been dreaming of, and its delivered to the dealer 60 days later……… only the purchase price is guaranteed. The residual and interest rate can change, thus changing your lease payments.
Distance to dealer:
The local dealers don’t give great discounts around me. I found one about 90 miles away (we'll see) but probably can get better if I go to Iowa, North Carolina or Texas. If I fly there and drive home, I’ve got flight, fuel, plus that mileage counts towards the lease. The mileage isn’t a big deal to me, I’ll probably only put 6,000 per year on it. Well that’s a normal year, but if I go to EJS next year, EEEEK!
So lets say $400 flight one way plus 500 miles at 20mpg (easy figures, need 25 gallons at $4 per gallon. $500 travel cost. I think actual costs to Iowa would be like $350.
I’m getting a quote for the dealer to drive the car to me, and also for a transport truck to drop it off. I’ll probably just fly and drive home if its Iowa, not sure about NC or Texas. So 3 options here
The Gator Problem:
Some guy rained on my parade yesterday and said that often jeep only has new colors for a few years. If I’m stuck in a lease and Gator goes away, I might not be able to buy a new one after lease is up. Or I’ll have 2 Gladiators at the same time, or I’ll have to buy a used Gator. 3 more options
NOT MY OPTIONS PROBLEM:
Since the price can change without my control, I can’t lease/order my dream build. It also means I can’t order a bone stock sport or sport s. They’ll probably all have some factory options so I’m at the mercy of randomness and need to be ready at the drop of a hat to buy a vehicle off a lot with whatever options it has.
Total payments of leases:
Travel cost + Sport S with decent options $445 / month 24 months = $10,680 (assuming this doesn’t change because vehicle hasn't arrived yet)
Overland with decent options from local dealer $790 / month 24 months = $18,960 (not sure if this includes ALL fees) HOLY COW, too much money when i multiply it out!
My options as I see them:
1. Drive my rusty 235,000 mile Grand Caravan until I’m ready financially to buy a Rubicon Gator
2. Do a 2-3 year lease on a Sport S with decent options~ $445 per month and hope I can get a Gator after.
Fake options:
1. Win the lottery
2. Spend my roth IRA at age 36
3. Buy a Rubicon Gator in 5 months and if I don’t have enough money, just make the payment from my HELOC
4. Lease a Rubicon and if I don’t have enough money, make the payment from my HELOC
5. Meet one of the MANY BILLIONAIRES that other guys around here know and get a fat paying job and then just pay cash with my signing bonus.
6. Buy a YUGO
7. Build a plywood replica of a Gladiator and then pretend I’m at EJS when you guys are, and then go crazy like Ray Finkle.
If you made it this far, you rock!
It all started when I was conceived in the back of a plywood truck,
wait that’s like too much background.
Recent Background:
I ultimately want a Gator Rubicon, but because I recently bought a new minivan for the wife with all the bells and whistles last Fall, it’s not financially responsible to commit to an additional payment like that within the next 2 years. My income fluctuates too much. So actually buying cash, or conventional financing ANY JT right now is NOT an option for me. (so please don't suggest, just a waste of time)
I've started considering getting a lease for 2-3 years so I can test the waters and decide if this Jeep life is for this guy. At first I thought of just getting a sport or sport S because it would cost less, but then my wife said, "Lease a Rubicon so you know if the Rubicon is the truck you want to buy in 2-3 years when the lease is up". Afterall, i've never done overlanding, rock crawling, mudding (with my own vehicle).
So i dunno, maybe this city boy just needs a Sport S or Overland...... or maybe I’ll love the rugged outdoor life ( I am an Eagle Scout afterall and spent many days/nights in nature)
So I started looking at leases and what I think I discovered is this.
My understanding of how a lease works:
You can still negotiate the Cost of the vehicle you’re buying, so tread lightly and 5-7% off invoice can still apply. What FCA does is assign a “residual” value to the vehicle you want to buy at time of lease. (MORE ON THIS LATER) This is a % less than 100%. Think of it as the value left in the vehicle when your payments are over. So your payments are based on the“depreciation” of said vehicle. (100%-Residual%) I was recently quoted about 79% residual for a sport S. @Dietruck explained the % off is
There is also some kind of interest type thing/financing fee that’s rolled into the lease (IS THIS TRUE?) and each payment includes state and local tax, you don't pay for all of the sales tax up front like when you buy with conventional loan. You only pay sales tax on the portion you consume.
One dealer said their dealer fee is rolled into the lease payments, and the destination fee is rolled into the purchase price $1495 MSRP I believe. One dealer told me there was a $650 “acquisition fee” that the leasing company tacks onto the amount financed through the lease. Another dealer said their acquisition fee this month for them is ZERO, but that could change tomorrow.
Calculations 1: I did it this way first, then @Dietruck explained my calculations were off.
So, I would basically be paying 21% (100%-79% residual) of the negotiated sales price (invoice of vehicle and add-ons plus destination * 95% (with 5% below invoice with tread lightly dealer) plus dealer fee and acquisition fee / 24 payments).
So if invoice plus destination is $43,932 * 95% * 21% = $8,764 + dealer fee $75 + $0 Acquisition cost = $8,839.
This is for a 24 month and 10,000 mile per year lease. So $8653 / 24 = $368 *1.055 (sales tax) = $388…………but I was quoted like $425.
So I’m not sure where the other $36 per month came from, I’m guessing that’s the cost of the lease, like interest on a loan. (IF YOU KNOW PLEASE INFORM ME WHY MY MATHS ARE OFF)
Calculations 2: I feel like my calculations are still off.
So, I would basically be paying 21% of MSRP (100%-79% residual) less the 5% off Invoice with tread lightly dealer) plus dealer fee and acquisition fee / 24 payments).
So if MSRP plus destination is $45,660 * 21% = $9,588 + dealer fee $75 + $0 Acquisition cost = $9,663.
5% of invoice on this spec sheet was about 8.6% of MSRP is $3,926.
This is for a 24 month and 10,000 mile per year lease. So $9,588 - $3,926 / 24 = $235 *1.055 (sales tax) = $248…………but I was quoted like $425
So I’m not sure where the other $177 per month came from, I’m guessing that’s the cost of the lease, like interest on a loan. (IF YOU KNOW PLEASE INFORM ME WHY MY MATHS ARE OFF)
Calculations Conclusions:
This stuff gets so confusing, especially if you don't have a real example to work off of. I apologize if my math is way off for anybody trying to follow my footsteps. Probably easiest to do this, BUY FROM A DEALER THAT WILL GIVE YOU THE MOST OFF INVOICE AND LOWEST DOC FEE, THEN CALL IT A DAY. lol
The Residual Problem:
The problem is that if you order a JT today and negotiate a sweet 5-7% below invoice with all of the mods you’ve been dreaming of, and its delivered to the dealer 60 days later……… only the purchase price is guaranteed. The residual and interest rate can change, thus changing your lease payments.
Distance to dealer:
The local dealers don’t give great discounts around me. I found one about 90 miles away (we'll see) but probably can get better if I go to Iowa, North Carolina or Texas. If I fly there and drive home, I’ve got flight, fuel, plus that mileage counts towards the lease. The mileage isn’t a big deal to me, I’ll probably only put 6,000 per year on it. Well that’s a normal year, but if I go to EJS next year, EEEEK!
So lets say $400 flight one way plus 500 miles at 20mpg (easy figures, need 25 gallons at $4 per gallon. $500 travel cost. I think actual costs to Iowa would be like $350.
I’m getting a quote for the dealer to drive the car to me, and also for a transport truck to drop it off. I’ll probably just fly and drive home if its Iowa, not sure about NC or Texas. So 3 options here
The Gator Problem:
Some guy rained on my parade yesterday and said that often jeep only has new colors for a few years. If I’m stuck in a lease and Gator goes away, I might not be able to buy a new one after lease is up. Or I’ll have 2 Gladiators at the same time, or I’ll have to buy a used Gator. 3 more options
NOT MY OPTIONS PROBLEM:
Since the price can change without my control, I can’t lease/order my dream build. It also means I can’t order a bone stock sport or sport s. They’ll probably all have some factory options so I’m at the mercy of randomness and need to be ready at the drop of a hat to buy a vehicle off a lot with whatever options it has.
Total payments of leases:
Travel cost + Sport S with decent options $445 / month 24 months = $10,680 (assuming this doesn’t change because vehicle hasn't arrived yet)
Overland with decent options from local dealer $790 / month 24 months = $18,960 (not sure if this includes ALL fees) HOLY COW, too much money when i multiply it out!
My options as I see them:
1. Drive my rusty 235,000 mile Grand Caravan until I’m ready financially to buy a Rubicon Gator
2. Do a 2-3 year lease on a Sport S with decent options~ $445 per month and hope I can get a Gator after.
Fake options:
1. Win the lottery
2. Spend my roth IRA at age 36
3. Buy a Rubicon Gator in 5 months and if I don’t have enough money, just make the payment from my HELOC
4. Lease a Rubicon and if I don’t have enough money, make the payment from my HELOC
5. Meet one of the MANY BILLIONAIRES that other guys around here know and get a fat paying job and then just pay cash with my signing bonus.
6. Buy a YUGO
7. Build a plywood replica of a Gladiator and then pretend I’m at EJS when you guys are, and then go crazy like Ray Finkle.
If you made it this far, you rock!
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