R1T Leasing Coming Later This Year

[DuoRivians]

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[YosemiteSam]

I have never ‘owned’ a leased vehicle, so I don’t understand how leasing works including the pros & cons.

Can you guys please explain why I should consider leasing vs buying my future R1T?

Thanks much!

 

[Riviot]

I got an email nudging me to get an R1S from the shop, had links to finance FAQs. I found this... Is it new?

 

[BrentInCO]

I got an email nudging me to get an R1S from the shop, had links to finance FAQs. I found this... Is it new?

It was announced on their last quarterly earnings call, but no more details than in what you’ve posted

 

[Riviot]

It was announced on their last quarterly earnings call, but no more details than in what you’ve posted

Did they say This year? I thought it was next year. Looks like they're pulling all the levers to get folks into R1Ts.

 

[DuoRivians]

Did they say This year? I thought it was next year. Looks like they're pulling all the levers to get folks into R1Ts.

Not sure on timing. It was also mentioned in their latest newsletter:

https://stories.rivian.com/letsgonewsletternov2023

 

[Prime]

I have never ‘owned’ a leased vehicle, so I don’t understand how leasing works including the pros & cons.

Can you guys please explain why I should consider leasing vs buying my future R1T?

Thanks much!

Leasing will allow future owners to make use of the tax credit regardless of income eligibility or price of the vehicle. Lease loophole allows for direct reduction in msrp of vehicle and after that if desired you can choose to buy out the lease and make use of the federal deduction.

 

[godfodder0901]

Did they say This year? I thought it was next year. Looks like they're pulling all the levers to get folks into R1Ts.

They absolutely said by the end of this year.

 

[Riviot]

They absolutely said by the end of this year.

I absolutely misread it

 

[Kuro-Rivian]

At this stage, residuals on a R1T 3 years out have to me a wild guess at best. It'll be interesting to see where they'll be set. I'd bet they'll be so low that it makes leasing unattractive.

 

[DuoRivians]

At this stage, residuals on a R1T 3 years out have to me a wild guess at best. It'll be interesting to see where they'll be set. I'd bet they'll be so low that it makes leasing a not so attractive option.

Leasing will be a very popular option, imo, especially with the $7500 effective cash back

 

[Kuro-Rivian]

Leasing will be a very popular option, imo, especially with the $7500 effective cash back

Leasing is just a math exercise pure and simple. So it's gonna depend on the math.

 

[DuoRivians]

Leasing is just a math exercise pure and simple. So it's gonna depend on the math.

Of course math is involved, but the consumer gets $7500 discount if they lease that they otherwise wouldn’t by purchasing.

And if there’s a purchase option at the end of the lease, if the buyer is planning to buy anyway, the lease route will almost always be better (unless the money factor is awful)

 

[240vPlug]

Weather a lease is better financially depends on many factors.

As most of you probably already know the cost of the lease is the difference between sales price and residual at the end of the lease plus money factor.

We already know what the sales price is with Rivian so we have to see what is the residual and money factor.

The other part is whether or not you plan to buy the truck or turn it in. For some folks who own small businesses it might also have some tax benefits as lease payments can be used as a deduction if your using actual expense method instead of mileage deduction (talk to your accountant on that).

I expect Rivian to retain a decent amount of value over a 2 or three years lease term. So make sure you look at at the amortization table for financing so see if leasing/financing will cost less over three years (of course resale isn't guaranteed).

 

[Kuro-Rivian]

Of course math is involved, but the consumer gets $7500 discount if they lease that they otherwise wouldn’t by purchasing.

And if there’s a purchase option at the end of the lease, if the buyer is planning to buy anyway, the lease route will almost always be better (unless the money factor is awful)

So what. Rivian isn't gonna have some way off market money factor. So we basically know everything about how a R1T lease might look EXCEPT the the residual. Rivian is gonna set that and god knows how they will figure that out. If the residual is set near market value....that's $7500 straight into the leasee's pocket they may or may not have gotten. If it's below market value...bonus...leasee get $7500 plus a bump from purchase resale as a trade for a higher lease payment, above market value by $7500 lower monthly but negates the $7500, yadda yadda yadda and so on and so forth.

So back to my ORIGINAL point. I would bet $'s to donuts the residual value is set to where a buy vs lease situation make the lease unattractive. We shall see.

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