Lease for $1,228/mo? No, try $1,711/mo: negative equity issue?

[NineElectrics]

Rivian advertises a low price for R1S leases on a $98K car, but the only cars available in the shop that are and upgrade from my current Launch Edition are significantly more than that. The one I picked out is $105K. That's $7K more expensive, so one would expect the lease terms to be at least $200 more a month. But no, it's actually $451 more a month.

So, $1,228 a month advertised vs $1,680 reality. Ouch.

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[NineElectrics]

The actual lease offer turned out to be even higher, at $1,711/mo. $6,000 down, $11K due at signing (sans any trade-in credit, of which there will be none). 10,000 miles a year.

 

[RandomMcRandomFace]

Wait are you saying you expect Rivian’s teaser rates to be for a car that is an actual upgrade over your current car? Please explain this post.

 

[DuoRivian]

Also Rivian’s “base” model you mention has upgraded paint, interior and wheels included so it is possible to get $6k cheaper.

 

[NineElectrics]

Wait are you saying you expect Rivian’s teaser rates to be for a car that is an actual upgrade over your current car? Please explain this post.

No, but the car picked is not much more expensive than the teaser car, and the actual rate is out of proportion to that difference.

The actual lease offer has an effective interest rate of 15%, assuming a residual of 62%. To be fair, it's not clear if they're adding tax (but they shouldn't be in my state).

 

[NineElectrics]

Note, Rivian charges you a $1,000 non-refundable deposit to be able to see this number, so... you're welcome.

 

[DarthBrader]

The actual lease offer has an effective interest rate of 15%, assuming a residual of 62%. To be fair, it's not clear if they're adding tax (but they shouldn't be in my state).

Is 62% the residual stated in the lease offer? And an interest rate of 15% would be a money factor of 0.00625? That would be pretty horrific.

I’m sure many would be happy to hear confirmation of the actual numbers. We haven’t seen many data points for the R1S leases, and they seem strangely and inexplicably higher than for the T.

 

[NineElectrics]

I think I might have figured out what's going on.

This isn't spelled out clearly at all (in fact, it's kind of hidden), but when you have negative equity in your trade, Rivian seems to roll that negative equity into your lease payment (and charge you interest on it) rather than requiring you to pay the difference at close. I assumed they (or the bank) would ask for a separate check for the trade.

This is confusing because Rivian will still collect a separate, "normal" lease down payment from your prior to close; it just doesn't include the negative equity. You can increase this payment yourself to offset the negative equity rollup, if you know what's going on, but they don't tell you how this works until after you decide on the amount you're putting down. Maybe this is obvious to everyone but me, but I've never had negative equity in a trade before.

 

[NineElectrics]

Is 62% the residual stated in the lease offer? And an interest rate of 15% would be a money factor of 0.00625? That would be pretty horrific.

So far, none of the paperwork actually discloses the money factor or residual. Maybe I'll get that information at delivery time.

I now believe this rate includes negative equity in my trade, but this was kind of hidden by Rivian's lease process (see above).

 

[DarthBrader]

So far, none of the paperwork actually discloses the money factor or residual. Maybe I'll get that information at delivery time.

Interesting. Maybe that’s why there’s so little info out there. Their finance people may be able to tell you, though I’ve seen reports they’re pretty swamped.

 

[240vPlug]

Yeah, negative equity will definitely run it up. It's all bundled into one transaction so unless you put additional money down it will be rolled into the lease payments. Hiding negative equity into lease payments is a common thing from what I hear. I'm guessing because the buyer can pay off their negative equity in 24 or 36 months versus putting it into a finance at a longer term.

Why trade in your launch edition?

 

[jakz]

I hate that they don't provide any of the financial details until you're basically stuck

It's been hard to get real datapoints on leases

 

[jjswan33]

I’m sure their lease offer doesn’t include tax, title and license etc either. So if you have a high tax rate in your state that could be contributing to the offset.

 

[NineElectrics]

Why trade in your launch edition?

It doesn’t get enough range in winter. It probably does for most, but not for me. With winter tires and a cargo carrier, I can only go about 90 miles into the mountains and still have enough juice to get back. That’s not adventurous enough.

 

[mannybalboa]

I think I might have figured out what's going on.

This isn't spelled out clearly at all (in fact, it's kind of hidden), but when you have negative equity in your trade, Rivian seems to roll that negative equity into your lease payment (and charge you interest on it) rather than requiring you to pay the difference at close. I assumed they (or the bank) would ask for a separate check for the trade.

This is confusing because Rivian will still collect a separate, "normal" lease down payment from your prior to close; it just doesn't include the negative equity. You can increase this payment yourself to offset the negative equity rollup, if you know what's going on, but they don't tell you how this works until after you decide on the amount you're putting down. Maybe this is obvious to everyone but me, but I've never had negative equity in a trade before.

I am in same boat. Have you figured out about the sales tax exemption with your trade in?

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