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  #1  
Old 02-03-2015, 01:07 PM
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Leasing option

Just sharing as it's been a while since I've leased a vehicle. Last week I almost "bought" the 2015 Grand Cherokee Overland w/tech package. During financing, I made a snap decision to lease instead knowing full well I was not going to keep it. Especially, since the next gen 2017's will be arriving showrooms.

I leased it for 24 months/12,000 miles and my residual value is 66% (which seems high) and my money factor is .0940, which equates to an APR of 2.25 I believe?

I also just found out that instead of turning in the vehicle I could trade it in instead! Did you guys know about this?

I knew that I could either buy it at lease end or turn it in but this trade in thing is a new one for me! Market depending, if I negotiate right this option could be a real winner I think....I am certainly no leasing expert but considering all the problems one could potentially have with a Jeep I'd rather try it rather than buy it. I also like the fact that my credit report only reflects my total lease amount (which reduces my debit to income ratios BTW) rather than purchase price. Thoughts are welcome.

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  #2  
Old 02-03-2015, 04:41 PM
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Quote:
Originally Posted by Sleestak View Post
Just sharing as it's been a while since I've leased a vehicle. Last week I almost "bought" the 2015 Grand Cherokee Overland w/tech package. During financing, I made a snap decision to lease instead knowing full well I was not going to keep it. Especially, since the next gen 2017's will be arriving showrooms.

I leased it for 24 months/12,000 miles and my residual value is 66% (which is high so that's great) and my money factor is .0940, which equates to an APR of 2.25 I believe?

I also just found out that instead of turning in the vehicle I could trade it in instead! Did you guys know about this? Because my residual is so high it appears I could make money by trading it if I decide to buy or lease another Jeep product.

I knew that I could either buy it at lease end or turn it in but this trade in thing is a new one for me! Market depending, if I negotiate right this option could be a real winner I think....I am certainly no leasing expert but considering all the problems one could potentially have with a Jeep I'd rather try it rather than buy it. Thoughts are welcome.
Sorry but a high residual virtually guarantees you shouldn't trade it in or buy it out, financially speaking. A pumped up resid lowers your lease payment (you are leasing a smaller % of value) but transfers that savings to a higher back-end buyout cost which would make a trade scenario more difficult than a lower residual. You get it good one way, not both.
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Old 02-03-2015, 04:47 PM
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Re: Leasing option

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Originally Posted by 14SummitHemi View Post
Sorry but a high residual virtually guarantees you shouldn't trade it in or buy it out, financially speaking. A pumped up resid lowers your lease payment (you are leasing a smaller % of value) but transfers that savings to a higher back-end buyout cost which would make a trade scenario more difficult than a lower residual. You get it good one way, not both.
So in this case it makes sense to just turn it in, right?
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Old 02-03-2015, 04:53 PM
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Quote:
Originally Posted by Sleestak View Post

So in this case it makes sense to just turn it in, right?
Most likely, yes espec with the revised MY16 (1st hit on used values) and then the all new JGC (2nd big hit on old gen used values).
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Old 02-03-2015, 04:58 PM
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Re: Leasing option

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Originally Posted by Sleestak View Post
So in this case it makes sense to just turn it in, right?
Exactly.

Of course, you ALWAYS have the option to have your dealer check your numbers/options at any time and depending on the circumstances, an early trade might still be on the table. After all, there are several different scenarios - i.e. HOW early you want to trade.

I'm coming from the other end on my lease: My monthly payment is much higher than what you can get today on the same vehicle due to a very low residual that was used on my deal.

But since that gives me me the opportunity to trade in significantly earlier without any negative equity (probably after 2/3 of my lease-term), I can live with that.

Basically, I signed a 39-months lease with the option to trade after 26.
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Old 02-03-2015, 05:09 PM
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I prefer the low residual. I'll probably trade mine this fall for the 2016. This will be 24 months on my 36mo lease. My full term residual is 26k on a 2014 overland with he HEMI and adv tech. I'm sure there will be an adjustment on my residual.
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Old 02-03-2015, 05:18 PM
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Re: Leasing option

So are you saying one can trade in early or turn in early? Is there a difference in penalty or is it waived since you're leasing/buying another Jeep? Sorry, I'm just not up on the early lease turn in/trade in scenario.
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Old 02-03-2015, 05:19 PM
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Re: Leasing option

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Originally Posted by Paradiso View Post
I prefer the low residual.
Same here!

I just checked my lease-agreement and on my 2015 Summit with an MSRP of $54,030, they used a residual after 39 months and 12K miles/year of only $26,474.

I'm pretty sure there will be equity at some point within this lease...
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Old 02-03-2015, 05:21 PM
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Re: Leasing option

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Originally Posted by 14SummitHemi View Post
Most likely, yes espec with the revised MY16 (1st hit on used values) and then the all new JGC (2nd big hit on old gen used values).
When you put it that way, even more a reason I'm glad I leased!!
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Old 02-03-2015, 05:25 PM
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You have equity. I roll it into the next lease. As far as any penalty I've not heard if any. My local jeep dealer let's me turn in the lease a year earlier for a new JGC. At this point I usually can get the best equity for my current JGC.
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Old 02-03-2015, 05:27 PM
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Re: Leasing option

So how do I know when it's a good time to explore turning in or trading in?
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Old 02-03-2015, 05:29 PM
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Re: Leasing option

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Originally Posted by Paradiso View Post
You have equity. I roll it into the next lease. As far as any penalty I've not heard if any. My local jeep dealer let's me turn in the lease a year earlier for a new JGC. At this point I usually can get the best equity for my current JGC.
Holy Crap!!! You can turn in your lease a year early and not get penalized if you buy/lease another Jeep?? I've never even heard of such a thing!!!
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