Lease/buy before the production stop?

[Billyt1963]

I wanted to get the opinion of the collected wisdom here on the subject.

i have a demo scheduled on Tuesday for an R1T. I have been watching them for a while, but several things held me back. I am now pretty serious about getting one, but I am not sure about timing.

My preference is to lease due to the volatility of EV development. I feel like in the next 3 years battery technology is going to take a leap and if purchased now, the value will take a significant hit. That said, I live in TN where leasing is not an option.

i also know they are coming up on a production halt to retool, change some things about the vehicle. I wonder how this will impact quality when they come back having new procedures on building the vehicles.

I feel like if I am going to get a Rivian, I need to purchase before the halt. I don’t want a crazy configuration, Performance DM with Standard + battery, 21 inch tires. Color more than likely just la Silver.

I would like to hear any pluses/minuses I may not be thinking of.

Billy

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[DuoRivians]

Lease, get the $7500 tax credit, and buy it if you like it. Otherwise return it. I don’t think there’s a point in waiting, especially if planning on leasing.

 

[Billyt1963]

The only reason I can’t lease is that it isn’t offered in my state. But sounds like you think buy if i can’t lease.

 

[KRG]

I had this same consideration, but ultimately found exactly what I wanted in the shop and decided to go for it.

 

[golden_frog]

Could always buy a used R1T

 

[Billyt1963]

Could always buy a used R1T

I have considered that, but have read a couple of stories about the pain of changing the ownership. That isn’t off the table though. Thanks for your thought.

 

[240vPlug]

Don't lease unless your 100% sure your gonna turn it in at the end. Better to buy if you plan to keep it.

For a 72mo finance at 6% with zero down you would only owe about 52% after three years. Unless of course you think it's going to lose more than 48% value in 3y 45k mi.

Not a financial expert of course.

 

[Dave Cundiff]

@Billyt1963: All vehicles, regardless of power source, lose value over time. Except for a few which become valued "antiques," vehicles are not investments.

The question is: Given the expected characteristics of the vehicle, and given the uniqueness of your situation and values, will owning a Rivian sooner rather than later be valuable to YOU?

For us, it was highly valuable -- even though we hesitated until the last minute. We are very pleased with what our R1S does for us! Your mileage may vary.

***

On decision-making, I remember Piet Hein's wise poem, "A Psychological Tip":

Whenever you're called on to make up your mind,
And you're hampered by not having any,
The way to solve the dilemma, you'll find,
Is simply by spinning a penny.

No -- not so that chance shall decide the affair
While you're passively standing there moping;
But the moment the penny is up in the air,
You suddenly know what you're hoping.

***

Good luck in making your decision!

 

[djsider2]

Don't lease unless your 100% sure your gonna turn it in at the end. Better to buy if you plan to keep it.

For a 72mo finance at 6% with zero down you would only owe about 52% after three years. Unless of course you think it's going to lose more than 48% value in 3y 45k mi.

Not a financial expert of course.

The lease money factor rates are lower than the finance rate. Your comparison only applies if both lease and loan paid the same amount over the first 3 years. That’s not true. Lease monthly’s are lower.

 

[Billyt1963]

Don't lease unless your 100% sure your gonna turn it in at the end. Better to buy if you plan to keep it.

For a 72mo finance at 6% with zero down you would only owe about 52% after three years. Unless of course you think it's going to lose more than 48% value in 3y 45k mi.

Not a financial expert of course.

If I do leases, it would be the first time ever to lease. I am really leaning toward buy now, just wondering if I should do it before the pause or after.

Billy

 

[Billyt1963]

Thanks to everyone for their input.

One question I asked, no one really touched on.

Does the pause negatively impact quality of materials and quality of the build of the vehicle?

Billy

 

[240vPlug]

The lease money factor rates are lower than the finance rate. Your comparison only applies if both lease and loan paid the same amount over the first 3 years. That’s not true. Lease monthly’s are lower.

The monthly are lower true but you have a lot less equity in the vehicle after 3 years. Again, that may not be an issue if you know you're not going to keep it. I'm just reminding everyone to do the math and look at your unique situation. This is one of those topics that there's no right or wrong answer that applies to everyone.

 

[240vPlug]

Thanks to everyone for their input.

One question I asked, no one really touched on.

Does the pause negatively impact quality of materials and quality of the build of the vehicle?

Billy

It's a good question. I don't think anyone really knows the answer for sure. We can guess that there will be cost cutting and I do hope that the quality of the vehicle does not change. One of the things I know they're doing is trying to reduce the amount of wiring and ECUs in the vehicle. I tend to be of the camp that it's better not to wait for the next best thing because like with Tesla. As soon as the next thing comes there will be something else on the horizon and you will always be waiting.

As far as doing the math, this is the calculator I like to use. It's pretty basic, but the amortization schedule is what I like to pay close attention to if you are financing.

https://www.calculator.net/auto-loan-calculator.html

Rivian's lease are very attractive.. but the other thing that bothers me with them is that they are not transferable. At least that's what folks who have signed up have said. And that's an issue because you have no options. If your situation changes you have to have that lease payment for the term or terminate it. Termination usually doesn't make sense because you lose a ton of money and you lose use of the vehicle both.

There are many situations to where lease can be beneficial. Like if you were a small business and can write off these payments, as an "actual expense" .

Do the math and talk to your accountant. Even with the one lease that we had the mileage wound up being more of a deduction than the actual expenses.

Again I'm not a financial pro... And there is no right or wrong answer for everyone. Leases will work well for many folks...others may benefit doing a buy instead.

It's similar to the whole cash versus finance arguement. Yes you pay to finance vehicle but if I can get a 8 to 12% return in the market it still makes sense to finance at 6% and then invest that cash for a net 2-6% return.

 

[pnwr1s]

I have considered that, but have read a couple of stories about the pain of changing the ownership. That isn’t off the table though. Thanks for your thought.

I bought my S used. Took one service ticket to switch ownership to my account.

 

[Shaqdeez]

Thanks to everyone for their input.

One question I asked, no one really touched on.

Does the pause negatively impact quality of materials and quality of the build of the vehicle?

Billy

Yeah I'm personally looking for an answer on this as well. I've heard in some threads/vids that the production halt may result in potential hardware upgrades in addition to part supply change introduction. In other communications I'm hearing it's exclusively to introduce potentially inferior parts/material to cut costs. So I'm really confused.

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