Yep it absolutely is absurd. But that's what you get when you're borrowing an average of ~$90k for 3 years at 7.8% interest. Remember that if you pay cash instead of lease, then you gave Rivian ~$100k that you could have had invested in bank account of stock/funds instead.
@Jivian - you can see in this example, the "rent" (f) is $20K for a $25K in depreciation (e). Bank is definitely not charging rent only on the depreciation amount at the APR equivalent...So, perhaps I used the wrong term, MSRP, but what I really meant is the Gross Capitalized Cost.
Why are residuals always whole or half percentages?
In California, you typically pay a use tax instead of sales tax when you lease. So, you avoid paying the sales tax on the entire vehicle, which lowers the lease payment and has some time value to the money. If you leased the vehicle for the entire term and turn it in, you will have never paid sales tax on the entire value of the vehicle, just the lease payment (which includes interest!).
My principle is inline with yours. Why chuckle at people who pay cash because they can do it? Let me ask them if they chuckle at people who's buying bonds. Different strokes for different folks.
First of all, hold it right there. A car IS NOT an asset. A car IS NOT an investment. a car is AN EXPENSE. Just making sure you are aware of that.
Exactly. Depreciation may be on the minds of those who think they might have no choice but to sell it down the road for whatever reason. Or perhaps can no longer afford the note. Or trade it in. As I mentioned, I could not care less about the resale value of my EVs if I tried. The thrill, the joy of driving them never gets old. That is the only APPRECIATING asset in my view, what matters to me the most. Dollar value thereof, ho-hum.
Wrong...just, wrong. The is basic accounting assets vs. expenses. You buy a vehicle, it has value, that value depreciates over time, but it has value until it depreciates to nothing. If you feel like learning something take a look at Hertz financial statements - vehicles are assets.
Again, just wrong. The whole point of the OPs thread is to attempt to quantify a time-value-money equation to a car by looking at alternative scenarios for the capital. You can't really do that due to the depreciation, but, the question of what is the best way to maximize your money is a good one. I'm not sure why you're so eager to reject basic finance.
Look - you're in some sort of political, personal "how I live my life" mumbo jumbo here. You do you, you do what you think is best for you. I have no qualms at all about you living your life, and I'm not trying to tell you what to do. I know nothing about you or your life.
Exactly. Living my life exactly where I wanted to be in my book. No debt of any kind, cc, auto, mortgage, nothing. Never subservient to any entity, bank or otherwise. I alone tell myself what to do. Know enough finance to successfully have arrived to where I am at. That is the utmost greatest place to be in. Complete finsncial freedom; can get what I want when I want it by paying cash, no permission or approval from anybody else. Would not have it any other way, and it is such a beautiful place. One has to get there to undetstand it and appreciate it.
I'm a long time cash buyer, but the $7500 savings on a lease is making me think otherwise.
