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  #1  
Old 12-02-2015, 01:56 PM
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Wahoo! Back in a Grand Cherokee!

I've been lurking back on JG for a while, but have not had a Jeep since Chrysler bought back my 2014 Overland after numerous issues. With the wife's lease on her Elantra coming up, and with 3 siberian huskies, we needed to get a bigger car. Finally convinced her to try the JGC again and we are stoked.

This past Saturday we leased a 2015 Altitude III. I'm quickly learning it doesn't have a few things that the Overland did, but at this point I couldn't justify the price hike.

In case anyone is looking for leasing numbers, we negotiated down to a little over $500 below invoice (was expecting $1000 below, but apparently there was a "miscommunication") along with 2 years of free maintenance at any Chrysler dealership. This was coupled along with the $2500 in lease cash and $1000 in conquest. The MF and Residual were 0.00002 and 49%.

If I did my math correct, this car is cheaper by about $1500 to lease for 3 years first, and then finance for 3 years than it is to finance for 6 up front.

Total payment came out to $460 plus tax. With zero out of pocket, sign and drive.

Hopefully I'll be back here contributing more now!

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  #2  
Old 12-04-2015, 11:02 AM
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Re: Wahoo! Back in a Grand Cherokee!

Quote:
Originally Posted by adthebadstud View Post
If I did my math correct, this car is cheaper by about $1500 to lease for 3 years first, and then finance for 3 years than it is to finance for 6 up front.
It depends on a couple factors:

1) What is the interest rate difference between 3 years and 6? With my credit union, it's a full 2 percent.

2) What sort of end of lease balloon payment are you looking at to buy it out instead of trading in on another one? If you have to lay out $2500 an additional $2500 just to be allowed to buy it out, you end up worse off.

In my case, my options for finance rates were as follows:

1-3 years: 1.99%
4-5 years: 3.49%
6-7 years: 3.99%

At the time, they were also have a loan sale that knock a quarter percent off the 4-5 and 6-7 year terms. I ended up with 3.49% for 6 years with no PMI due to the amount I put down.

The result was, I was able to bring my payment down quite a bit going 6 years instead of 4 or 5 despite the extra half percent. The difference in the percentages wasn't enough make going 5 years a real value. I can still pay extra and pay it off sooner, but I'm not forced to make that higher payment.

The interest rate I was quoted at the dealer to go through Mopar was over 4%.

Now, with what I was willing to put down on a lease verses a purchase, my payment wasn't really that much low enough to make a lease viable for me. My thought originally was to lease to be sure I would like the Jeep, then buy it out at the end if I did.

The math just didn't add up, for me, though.
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  #3  
Old 12-04-2015, 11:49 AM
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Re: Wahoo! Back in a Grand Cherokee!

Well, at my credit union (assuming the rates don't drastically change in the next 3 years) a "new car loan" is considered any loan on a vehicle less than 3 years old. The current rates are 1.79% all the way to 72 months. So if I would have financed up front, my payment would have been approximately $606.21 per month with zero down. This is with a negotiated sale price of $500 below invoice, plus incentives ($2000). And assuming roughly 10% for drive off (taxes, initial registration, etc.). MSRP $41,625. Negotiated sale of $39,194.

Total out of pocket payment for the car in that scenario is $606.21 x 72 = $43,647.12

With the route that I took, same negotiated sale price. Same MSRP. The interest on the lease was essentially 0% at a MF of 0.00002. The residual is 49%, so a little more than half of the sticker price will be paid for through the lease.

Negotiated sale price less incentives ($3500 for the lease), plus fees (first month, sales tax, doc fee, registration, etc.) comes out to an adjusted cap cost of $36,922.46 with zero out of pocket. Monthly payment is $460.21 plus tax of 8.225% in Fresno CA, so $498.06 total payment including tax. I will have to make 35 monthly payments because the first was taken care of with the rebates. 35 x 498.06 = $17,432.10

Residual is $20,396.25. Assuming the rates don't change, and the same 10% for taxes and fees on that loan with zero down, plus the $350 purchase option fee, the new 3 year loan in 2018 will be for $22,785.88. That's a monthly payment of $650.53. For a total cost of 650.53 x 36 = $23,419.08

$17,432.10 + $23,419.08 = $40,851.18 for the Lease for 3, finance for 3.


$43,647.12 - $40,851.18 = $2,795.94 better. So, unless there's something that I did WAYYYY wrong, I think this was the better move. Sorry for the long explanation but hopefully it helps others. And if I'm wrong about something, let me know so I can edit the numbers on here
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  #4  
Old 12-04-2015, 02:30 PM
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Re: Wahoo! Back in a Grand Cherokee!

Credit unions are the best for rates...PenFed is typically 1.49 for both new and used vehicles. For Black Friday, they had a .99% rate for new.
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