Lease versus Finance

[Andy]

I've finally gotten fed up with the boring reliability of my Tacoma and put in an order for a Jeep Wrangler. Even worse, I opted to try out that new-fangled battery powered technology. That's right, I will soon (ok, 12-18 weeks from now) have a Rubicon 4XE PHEV. Once I get it I will post up my experiences (good and bad) in a new build thread in the Jeep section but before then I need to decide on a lease (36 month) or financing it. This will be my 4th Jeep vehicle going back to my college days so I am familiar with most of the quirks on the platform. I had a rental JL last year for 3 weeks in 29 Palms and was impressed by how it was much more refined than my last Jeep, a 2006 Unlimited, but still retained the characteristics that made it a Jeep. The electric only range on this vehicle will get me to work and back every day and electric rates here make operating costs about half of what gas would cost normally or about 500 times less now...

PRO for leasing
-This is new technology and could turn into a headache long term if FIAT, FCA, Stelantis or whatever they call themselves this week fumbles it.
-PHEV's are going to advance rapidly in the coming years, its smart to just lease for a short time and then move into a more advanced version
-I won't be locked into this vehicle platform long term so if I don't like the PHEV or find that the 4 door wrangler platform isn't suitable to me I can get out of the deal
-Relatively cheap to lease when the tax credit goes to the down payment and current interest rates even for a 15K mile per year lease
-I'm not going to do any major mods to the vehicle

PRO for financing
-Ok, that last one above is a damned lie and I know it. I'm going to mod the vehicle so a lease would mean I need to make everything removable or turn it in with $$ attached to it.
-A lease is really just a long term rental car unless I decide to buy it out at the end of the lease which is throwing away funds
-The tax rebate goes to the bank instead of me, and I don't get much if any tax breaks
-Interest rates are stupid low right now but are climbing fast, financing now will be much cheaper than later
-I plan to retire in the next few years and can have the vehicle paid off before I move to a fixed income
-Trade in values are currently extremely high, people who bought a vehicle 2 years ago are trading in for more than they paid. This is not sustainable but could persist for another few years if low used car supply continues.
-Pride in ownership instead of knowing its just a rental

If I wasn't getting the PHEV I wouldn't even be considering a lease. What are some other considerations for leasing vs purchasing?

 

[Doug]

Something happened to me too and I recently bought a Jeep but I went the other direction, as 2005 LJR that's already modded out. It's already got a RE 4.5" lift, with associated suspension work. It's got nearly $10,000 worth of GenRight armor, including a full roll cage. I got a decent deal on it and take dim down a few thousand dollars due to some things that needed fixed.

I was also looking into the 4Xe potentially if I went new. Something about the ability to use the hybrid to get to a trail and then go full electric for a time sounded like a lot of fun. IMO, the mods you will do make financing the better option. You won't get everything out of them if you sell it all together down the road but at least you'd have the option. I think the lease would weigh on you as you considered each and every mod, and would impact your decisions negatively.

 

[Andy]

I’m leaning towards buying but the cheapness of the lease is so tempting….

My LJ Rubicon was great on the trail but sucked for anything else. And it liked sucking down fuel too, yet made terrible power. 06 was the final year of the 4.0 and they had choked it so much to meet emissions it was awful to drive.

 

[kmacafee]

AS a retired financial planner, buying is always the way to go, especially if you will keep the vehicle more than 2 years. But, if you don't mod it and are getting it as a short term experiment, leasing does make some sense.

 

[Dave]

But, if you don't mod it...

Looks like Andy will be buying it then

 

[4x4x4doors]

With used prices going ridiculously higher, those folks that leased in the recent past have paid the leasing company for years AND gotten no benefit of the inflated prices.

 

[Andy]

True. At this point I’m probably leaning towards purchase now that rates are climbing. And because I know I will be modding the vehicle a bunch. Jeep’s are the worst for that, just too many things available

 

[Code Red]

Depends on the lease terms.

My mother leased a Land Rover, and the lease included a fixed purchase value if she wanted to keep it. When the lease ran out last year, her guaranteed price was about $10k below blue book. She bought the car, and then sold it back to the dealer for more than she paid for it. She could have gotten even more if she had been willing to put up with the hassle of a private sale.

 

[Dave]

Depends on the lease terms.

My mother leased a Land Rover, and the lease included a fixed purchase value if she wanted to keep it. When the lease ran out last year, her guaranteed price was about $10k below blue book. She bought the car, and then sold it back to the dealer for more than she paid for it. She could have gotten even more if she had been willing to put up with the hassle of a private sale.

That's definitely worth considering!