67% residual for 36 month / 15,000 mile R1S Quad Motor Lease. Final numbers included in thread.

[MidnightRivian]

67% residual for 36 month / 15,000 mile R1S Lease.

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[jambaman84]

I'm not familiar with leasing.. so does this mean at the end of the lease, you can purchase your vehicle for 65k?

 

[ksurfier]

Here’s what those numbers work out to, roughly speaking g:

Monthly Depreciation	$652.88​
Monthly Interest	$539.77​
Monthly Tax	$104.36​
Money Factor Equivalent APR	8.40%​
Upfront Payment/Rebate	$8,500.00​
Total 36 Lease Payments	$46,692.00​
Total Cost	$126,268.83-7,500 = $118,768 ​

without lease, total cost would be ~$106k cash, or almost $130k for 72 months at 6.25%…lease is better than financing, also can walk away at end of 3 years…

 

[Eric9610]

This was the exact same conclusion I came to when I leased my R1T. The rate on mine is 4%. Lease the. Buy at end depending on market and issues/ get hit. It does not make sense to finance or buy before the end of term.

 

[Electrified Outdoors]

Its very important to do the math on leases. They give you flexibility and predictability but usually at a higher cost to own over the term. Here is one example, this doesn't take into account a lower rate and longer term for a traditional finance. Numbers aren't to the penny but you get the idea. I came up with an equivalent money factory of 8.376%.

On 72mo finance at 6% you would be paying $12,275.16 more over the 36mo term but your balance at the end of year 3 would be much lower! Loan balance would only be about $50,500 vs the residual of $65,300 (A difference of $14,800). Note that you would only get $3,750 for the tax credit so the loan amount would be higher at $92,800.01 and the monthly pay would be about $300 more per month.

36 Loan payments would be 55,366.56 vs $43,091.40 in lease payments.

So buying is a little more costly but better financially at the end of the term. At the end of the lease you have nothing to show for the monies paid in and if you want to keep the truck you have to come up with the residual.

NOTE: This does not take sales tax into account. I am not a financial advisor of course.

 

[lefkonj]

I would have leased my R1S if it was available based on the numbers I am seeing. Especially because I like to get a new car every 3-5 years.

 

[ksurfier]

Also, a 3 year old R1S with 45k miles will not be worth $70k including taxes, try $50k at mst…. Lease is the clear winner.

 

[Golfer04]

Also, a 3 year old R1S with 45k miles will not be worth $70k including taxes, try $50k at mst…. Lease is the clear winner.

If it isn't worth $65,000 at lease termination the lease terms will change quickly. Chase (Rivian likely has some sort of residual exposure too) isn't going to eat your $15,000 loss. It is interesting they essentially charge 50 cents a mile depreciation and only 30 cents/mile for going over the mileage limit. Pays to get the lowest annual mileage lease and pay the excess charge.

 

[ksurfier]

If it isn't worth $65,000 at lease termination the lease terms will change quickly. Chase (Rivian likely has some sort of residual exposure too) isn't going to eat your $15,000 loss. It is interesting they essentially charge 50 cents a mile depreciation and only 30 cents/mile for going over the mileage limit. Pays to get the lowest annual mileage lease and pay the excess charge.

dunno…I got a delta of $0.12 per mile going from 12k to 15k, so not sure about that…residual is a guessing game. A 2021 Model S Plaid was $130k, now you can get one used from Tesla for $75k….Used car prices took massive hit from 2 years ago…

bottom line is the lease from Rivian seems like a really good deal, if you had the cash sitting around, would be better to lease and get 5% in investment account, no obligation to pay the $65k at end of lease and save $5k taxes depending which state you are in…

 

[DarthBrader]

Here’s what those numbers work out to, roughly speaking g:

Monthly Depreciation	$652.88​
Monthly Interest	$539.77​
Monthly Tax	$104.36​
Money Factor Equivalent APR	8.40%​
Upfront Payment/Rebate	$8,500.00​
Total 36 Lease Payments	$46,692.00​
Total Cost	$126,268.83-7,500 = $118,768​

without lease, total cost would be ~$106k cash, or almost $130k for 72 months at 6.25%…lease is better than financing, also can walk away at end of 3 years…

How did you calculate the interest rate? These lease numbers seem to come from a Reddit post where the OP reported a money factor of 0.00274. That would be a 6.58% rate as I understand it.

 

[Golfer04]

dunno…I got a delta of $0.12 per mile going from 12k to 15k, so not sure about that…residual is a guessing game. A 2021 Model S Plaid was $130k, now you can get one used from Tesla for $75k….Used car prices took massive hit from 2 years ago…

bottom line is the lease from Rivian seems like a really good deal, if you had the cash sitting around, would be better to lease and get 5% in investment account, no obligation to pay the $65k at end of lease and save $5k taxes depending which state you are in…

I was talking about going over the 45,000 mile limit on a three lease. I agree used car values have taken a big hit and Rivian/Chase is not using the correct residual, but every use case is different. At work we currently have over 3,000 pickup trucks leased out (we are finance company). IMO, the only reason leasing works is because we have a purchase advantage (via contract we can get the trucks 20-25 percent below sticker). Total vehicle cost is $1/mile under that lease. Depends what the vehicle is really worth at the end. I drive 36,000 miles a year so isn't good for me. Not including rebates and including sales tax I paid $78,500 for my T. 59,000 miles on it in 20 months and trade in offers are essentially $50,000. So round numbers 30 cents/mile in vehicle cost. I don't borrow money on my vehicles.

Everyone has a different use so there is no one right answer for everyone.

 

[HokieBird7980]

Are they allowing leases on pre price increase reservations?

 

[ksurfier]

Nope, as far as I know…
Lease is an incentive
Pre-price is also an incentive
You may only pick one…

 

[ksurfier]

How did you calculate the interest rate? These lease numbers seem to come from a Reddit post where the OP reported a money factor of 0.00274. That would be a 6.58% rate as I understand it.

Backed into them based on the values shown, the R1T may have a lower rate, don’t believe the R1S has the same rate…

 

[DarthBrader]

Backed into them based on the values shown, the R1T may have a lower rate, don’t believe the R1S has the same rate…

I think they're the exact same numbers for the exact same vehicle--I think OP here got these figures from that same Reddit post. And the Reddit poster said that Rivian told him a lower money factor than what you're calculating. I'm not suggesting your calculation is wrong, just trying to understand the discrepancy. For example, is Rivian / Chase adding something to the rent charge beyond what the MF would indicate? Or are they somehow calculating the MF differently to make it seem better than it is? If so, that calls into question the MF numbers that Rivian is sharing with people and that we're seeing reported on the forums.

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