Lease with immediate buyout?

[RivAW]

Since there is a lot of false information in this thread, will provide real numbers for a R1S purchased in March 2024 that was bought out in July 2024 with the $7500 EV credit applied. Will simplify using only real money from my bank account and subtract out any fees that exists no matter what (registration, etc.)

MSRP / Purchase Price: $109,950
Cash at delivery: $18,354 (includes the following fees and taxes). Subtracting all except the acquisition fee because the rest of the taxes and fees would be paid on a purchase. This will make it apples to apples comparison) = $15357

4 months of lease payments: $3844 ($961 x 4)
Cash to buy out lease: $85,652

Total apples to apples cost vs. buying: $104,853 on a purchase price of $109,950.

Total savings from leasing to buy out vs. buying outright: $5097

(Note that the total of 36 months of payments + and buy out at the end of the lease is $114,387 so no rent charge is paid on the early buy out). Note that the earnings on the $85,652 in a high yield savings account is about equal to the savings here so not a huge advantage to early buy out but there definitely IS a huge advantage to leasing to take advantage of the $7,500 credit.

Well, an advantage. Whether a “huge advantage” is relative to your view of $5k for the extra “trouble”…..but thanks for positing with the real numbers and analysis….this is good info

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[Pacernow]

Interesting video on getting out of a Rivian lease.

 

[slpymnky]

I leased an R1S quad motor in February and am casually looking at trading it in for something else. I can't make sense of the fact that (1) the residual is $66K and (2) the buyout from Chase is $76K while I still have ~$28K in payments over 2+ years to make. I wonder if Chase is anticipating the value to be much less than the $66k in 2 years and so they're willing to take a loss up front? Does that $76K include any sales tax?

The trade-in quotes I'm getting aren't great but I assume trying to sell a leased car to a private party would be a pain unless I bought it out first. I also wonder if I should buy it out anyways - basically I just need to bank the car is worth more than $48K at the end of my lease which I guess isn't guaranteed.

 

[gluz]

Not sure how Rivian contract is written out but we just did this with MB GLC 350e. Have title in hand after one month payment and saved around 6000

 

[R1SFamilyGuy]

Total apples to apples cost vs. buying: $104,853 on a purchase price of $109,950.

Total savings from leasing to buy out vs. buying outright: $5097

Note that the earnings on the $85,652 in a high yield savings account is about equal to the savings here so not a huge advantage to early buy out but there definitely IS a huge advantage to leasing to take advantage of the $7,500 credit.

did you buy out with cash or got a separate low apr loan for that?
I wonder if the loan option might benefit in terms of ownership sooner plus slight benefit of paying out over longer term

 

[michiganpinball]

Received my leased 2025 R1T September 28, 2024. Paid the lease off last week. The lease was through Chase Financial Services, who manages the Rivian leases. Logged onto to Chase and requested the buy out amount. This was the depreciation portion of the remaining payments of my 2 year lease + the residual value (which is determined at lease signing) + sales tax (Michigan). I sent them a cashiers check and 3 days later it was done.

I considered waiting until the end of the lease but I calculated the interest rate and it was 9.9% which was unacceptable to me.

 

[hammick]

We took delivery of our R1S Tri on 1-29-25 and I called Chase today to get our lease payoff which is good through 2-27. We saved exactly $5,748.78 by leasing vs purchasing (might be a little more if Chase sends a few $$$ back if we pay it off a couple weeks before 2-27). Despite the assurances I received from our Advisor at the Normal Plant (that Chase doesn't charge future rent charges on an early buyout) and the handful on here and reddit that have done this it was still a little nerve racking. A few things to note about our experience.

- the Chase lease document is confusing at most and ambiguous at best. Nowhere in the lease agreement does it spell out exactly how your early buyout will be calculated.

- our lease was in the State of Montana. Not sure if chase would handle an early buyout differently in any other states.

- Both my wife and I have over 800 credit scores yet our money factor converted to interest rate was 9.216% (Rivian leases are terribly expensive)

- our lease residual was $78,190

- don't forget to calculate in the $1,800 destination fee when doing your math. Nowhere in our Rivian account is this figure mentioned.

- we put $0 down which made our due at signing $2,994.01. Montana doesn't have sales tax on vehicle purchases or leases so keep that in mind if your due at signing is more. Absolutely no reason to put any money down if you plan to buy it out immediately. If you put money down and total it before the buyout be prepared for a nightmare.

- The total MSRP of our Tri (storm blue and 22" dark sport wheels) was $111,700

- The 6k Rivian incentive is listed in the selling price of the vehicle but the $7,500 tax credit is applied to the lease figures.

- Our total to buyout the lease before 2-27-25 is $96,957.21

- I called 844-868-2143 and spoke with a Chase representative to get the buyout. I didn't even know our account number at this point. If you want to make sure you get it paid off before you owe an additional lease payment I strongly suggest you start calling Chase about six days after your delivery.

-If we had to do it again we wouldn't change anything. Well worth saving over $5,700 vs purchasing and sticking it to the OD and muskrat before they kill the credit.

 

[CorneliousJD]

Received my leased 2025 R1T September 28, 2024. Paid the lease off last week. The lease was through Chase Financial Services, who manages the Rivian leases. Logged onto to Chase and requested the buy out amount. This was the depreciation portion of the remaining payments of my 2 year lease + the residual value (which is determined at lease signing) + sales tax (Michigan). I sent them a cashiers check and 3 days later it was done.

I considered waiting until the end of the lease but I calculated the interest rate and it was 9.9% which was unacceptable to me.

I'm looking to do a lease and immediate buyout in Michigan - did you have any issues with this process? What was your total approximate savings by doing this?

One thing I'm having a bit of trouble confirming is that there isn't a way I'd be DOUBLE taxed by doing lease then buyout - some states do this and I'm not familiar enough with MIchigan's lease tax laws to know for sure.

 

[cevans]

I'm looking to do a lease and immediate buyout in Michigan - did you have any issues with this process? What was your total approximate savings by doing this?

One thing I'm having a bit of trouble confirming is that there isn't a way I'd be DOUBLE taxed by doing lease then buyout - some states do this and I'm not familiar enough with MIchigan's lease tax laws to know for sure.

You are taxed with every lease payment and taxes are on the payments only not the vehicle price. When you do the buyout you'll be taxed on the buyout number, which will be less the lease payments.

 

[CorneliousJD]

You are taxed with every lease payment and taxes are on the payments only not the vehicle price. When you do the buyout you'll be taxed on the buyout number, which will be less the lease payments.

This is the most advantageous situation to be in for lease w/ immediate buyout then correct?
Do the lease w/ $0 down and 10k miles/year for lowest lease payment, then after 1 month do the buyout?

Thanks for taking the time to reply, as my guide is trying to dissuade me from going this route for some reason?

 

[jfoonly]

This is the most advantageous situation to be in for lease w/ immediate buyout then correct?

IMHO yes, it worked for me.

Do the lease w/ $0 down and 10k miles/year for lowest lease payment, then after 1 month do the buyout?

Yes, but s00ner. You can buyout as soon as you're in the chase computers, before the second month payment is due. Start online but then also call and be persistent, they're in no rush. It might take a couple weeks, it was difficult to get full details (even worse than getting the contract before delivery).

Thanks for taking the time to reply, as my guide is trying to dissuade me from going this route for some reason?

Chase makes more money the more rent charge you pay, they probably wouldn't appreciate rivian actively discouraging that.

 

[Rade]

We are three months into our lease and I am glad we did it. If we would have financed it from the onset, the payments would have been more than double for 5-6 years, and that would be with the equity trade. I am retired, so the lower 3-year lease payment for the 2025 R1T fits the budget just fine. On taking the lease, they gave me the buyout when the lease terminates, and I have that pool of money in savings until the time comes.

 

[CorneliousJD]

Sorry for more questions here - they're trying to expedite our delivery date (woo!)

I know if we do 10k miles per year that keeps our first payment/rent charge as low as possible.
Does it matter if we choose 24 vs 36 month lease?
24 month has higher first payment vs 36 month lease, but not sure which one nets the bigger benefit w/ the immediate buyout option?

 

[jfoonly]

Does it matter if we choose 24 vs 36 month lease?
24 month has higher first payment vs 36 month lease, but not sure which one nets the bigger benefit w/ the immediate buyout option?

Whichever is lower first month. Doesn't change the total of remaining cap cost and residual (adjusted lease balance) [edit:] and that cap cost in the payment (both totals the same).

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