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Discussion Starter · #1 ·
So I as at the dealer on Saturday armed with all the TruCar numbers and multiple quotes from dealers across the state on similarly specced 2016 Jeep Renegades...I was educated and prepared to buy.

But then I was talked into a lease. Which I knew nothing about and was completely unprepared to negotiate. That said the GM and Sales guy were really "nice" and I began to let me guard down. When I voiced my concerns about leasing and how complicated and confusing it was to me. They assured me that things were much more transparent these days and pretty straight forward.

So, I bit.... Thought I was getting a good deal, because I negotiated the removal of the $2000 down payment. The lease looked to be about $100 dollars less a month than buying the car outright. And given some of the possible reliability issues, I thought the idea of giving being able to return the car after 36 months seemed like a nice bit of reassurance if I had trouble.

Then I got home and discovered stories of people getting 2016 Loaded Audi's for $350 a month. I am paying $450 for a little Renegade. They switched me from 36 to 39 months without telling me. And I am having a hard time even deciphering the numbers on the doc. (I've attached the docs.) Is this the terrible deal I think it is? I know the residual value is a big deal when determining a lease payment, but I still feel like $450 is ridiculous - now that I am better educated on leases and what others have paid. What are my options? Have I signed my life away?

Thanks for any insight or advice.

Best,
Tom

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You should be able to get out of any contract within 3 days of signature date. There maybe something like a 50.00 per day fee but you should be able to back out. If you don’t feel good about it go back in, the sooner the better.
 

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I've only leased once ---- didn't like it. When you buy, you don't have to worry about mileage and can do what you want with the vehicle. Then again, I tend to hold on to my vehicles. That said, I know a number of people who lease and love it.

I have a loaded '16 on a 60 mo loan and pay $420 a month. I put $5000 down so that helped. A lease would have been at least $100 less as I recall.

I see you went for 12k miles per year. That would have killed me as I have had my Trailhawk for 3 months and already have 6000+ miles on it. I'm a little surprised that I've put so many miles on it but I enjoy driving it so much I guess I look for excuses to take it out :)
 

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Comparing to a more expensive car, and then trying to figure out why you paid more is a real head scratcher. I went thru that. You have to remember that the bank determines a large part of what the lease should be based on different incentives the mfg'er is giving, and how well a car is selling, factor in its value after the lease.

I'll just say my 2015 Limited stickered for $29,900, and I leased just before Christmas 2015. There were a few rebates applied, plus my wife's FCA discount, and $2000 down, and 39 month lease. I'm at $289/month.
 

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Leases are confusing. You can't go by what others are paying because their situation is different. You are leasing a $33,000 vehicle that you got $2,000 off msrp it looks like. Then in total you are paying close to $20,000 to have the vehicle for 39 months. Broken down a little, you are paying $13,000 for the value of the vehicle for those 39 months, $3100 rent fee for renting the vehicle. If you purchased it outright you wouldn't have to pay to rent it. It looks like you didn't pay a down payment, so there's the minus $2000 from MSRP, I think? There are other taxes and fees, such as $32 monthly sales tax/use tax, which is another fee purchasers don't pay.
I don't think you got ripped by the dealer or anything. You are just paying the normal fees associated with a lease. If you financed a purchase you would have to pay finance charges. You on the other hand are renting and so you are paying a rent fee, plus a few other taxes and fees. You can walk away after 39 months by paying a $400 fee, or decide to keep the vehicle and pay the the residual value of $17,000...which comes to $37000 or so total if you decided to buy later on. Everyone's situation is different but it seems the best thing to do, if you can, is purchase and keep a vehicle as long as possible.
 

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Looks like your payments will be $17,500 or so...then you got $2000 off but then didn't get the full $2000 off, but only $1850 off because you had to pay a tax on the $2000 reduction....weird huh? Then add some more fees and taxes and it all adds to close to $20,000.
 

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If you've changed your mind, examine the contract to see if there is any grace period written anywhere, otherwise I guess you are at their mercy. I have no experience with this, but maybe if you tell them you'll still purchase from them, they'll allow you to go in another direction.
 

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Discussion Starter · #10 ·
Dropped off the car!

So I just dropped the car back off at the dealer! I met with the GM and explained my story. That I came in, to BUY a car and had done my research etc and knew what I wanted to pay. But was talked into a lease and was not comfortable with the deal I got. She (GM) was very understanding and patient. She walked me through the numbers again and I do, now understand, why one can lease a fully loaded Audi for $350, but I still hope there is some room to negotiate this number down. I will ask for a deal from another dealer tomorrow and see how close they can get. I got some clarity around the "Rent Charge" which is actually .00172 or .042 She said that was the best the Credit Unions could give. (I have a credit rating of 779). So yeah, I left the car at the dealer and they are letting me "think it over" (pretty cool) I will need to call her tomorrow and let her know what I plan to do. (they will take the car back) That said I love the Renegade I just want the best deal I can get.

Again, any further advice on next moves would be greatly appreciated!

Cheers,
Tom
 

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Discussion Starter · #12 ·
Leases are confusing. You can't go by what others are paying because their situation is different. You are leasing a $33,000 vehicle that you got $2,000 off msrp it looks like. Then in total you are paying close to $20,000 to have the vehicle for 39 months. Broken down a little, you are paying $13,000 for the value of the vehicle for those 39 months, $3100 rent fee for renting the vehicle. If you purchased it outright you wouldn't have to pay to rent it. It looks like you didn't pay a down payment, so there's the minus $2000 from MSRP, I think? There are other taxes and fees, such as $32 monthly sales tax/use tax, which is another fee purchasers don't pay.
I don't think you got ripped by the dealer or anything. You are just paying the normal fees associated with a lease. If you financed a purchase you would have to pay finance charges. You on the other hand are renting and so you are paying a rent fee, plus a few other taxes and fees. You can walk away after 39 months by paying a $400 fee, or decide to keep the vehicle and pay the the residual value of $17,000...which comes to $37000 or so total if you decided to buy later on. Everyone's situation is different but it seems the best thing to do, if you can, is purchase and keep a vehicle as long as possible.
I do think the lease option is a good idea given the reliability issues and the fact that I want to tow a 1200lbs trailer and am not sure how the Rene will handle those loads (up colorado mt passes) If I burn out the transmission at least I can return it!
 

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$37000 total....but you got a rebate of $2000 so a little over $35000 out of pocket if you kept it.
Yeah...everyone's situations different. Some people want a new vehicle every few years. It seems to me you probably get better deals with leases on vehicles that hold value well.
 

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Not sure you can walk away from a lease if your transmission breaks down, unless the lease includes
a maintenance agreement. However, any factory warranty remaining should still apply.

Clifton
 

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I like leasing because I like to get a new vehicle every few years. I usually get the minimum miles (10,000 yr) because I usually end up trading the vehicle in anyway a year or so before the end of the lease. I usually average about $2000 cash I have to come up with to pay off the difference in what I am offered as trade in and what is due. On the other hand, I try to go with 0 down. I only pay state sales tax on the months I use the vehicle and I don't have to pay the $350-400 end of lease disposition fee. I would really want to do a lease on a Renegade due to unknown resale value and questionable reliability.
 

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Another way to look at this is that you are doing a loan with a balloon payment due at the end but you have the option to just turn the vehicle in. Figure you are saving about $100/mo for 39 months=$3900 If you financed for 60 months you would have 21 months left at $555/mo=$11655+3900 (monthly $100 savings)=$15555 vs. $17000 residual on vehicle if you lease. Depending on where you live, you would probably save the difference in sales tax that you did not have to pay (should you just turn the vehicle in at lease end). So it is a wash financially. But you have a choice when you lease.
 

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Dealerships giving you a "monthly price" and not a purchase price is pure BS and a sales tactic. And those advertised low monthly rates to buy or lease, well, read the small print- often things like $3,500 due at signing.
And in the US in March, Chrysler was offering 0% financing on the Renegade, so there would not be a better option that that!
 

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Well, my best reading of it is that the MSRP on the vehicle was $33k and change with destination fee in there. They basically knocked $1k off the price, and you got $2k of promotional cash with the usual tax penalties associated with it. Your buy out at the end will be the adjusted capitalized cost minus payments plus $325. So ($30,243 - $16,251.30)+$325 = $14,316.7 If you want to own the car at the end, you will be paying $30,568 for the vehicle, leaving taxes out of it. In theory the sales tax should be a push as you pay for the portion you use, and then later for the portion you buy out. (looks like 7.8%) With tax, you'd be paying, total, something like $32,961.56 assuing you paid cash for the buyout.

Now assuming that the gross capitalized cost is what they would negotiate to in a purchase, that $325 would be their doc fee, and you would pony up a $14,316.7 down payment the equivalent of the cash buyout assumed above, You'd be paying $470.49 per month, and a total cost oc $32,665.22.

Those are with leaving taxes out of it.

Realistically, you want to buy it out at the end. Since you put nothing down, I'll assume you do the same again, and take out a 36 month used car loan to buy it out. 398*449.44 = 17528.16 Buy out is $14,316.7 add 7.8% tax and it is $15433.40 Financed at zero percent down, you pay another $16,034.52 toatalling 6 years of loans, and $33562 in payments.

For comparing to loans, use a total price of $34,951 for the loan amount, and take any down payment off that. Then plug it into a loan calculator. Using my bank right now with your credit rating approximated, and their current rates, With 20% of the car price down (rounding to $6420), and a 5 year loan, you'd be looking at a payment of $499.46, and a total cost of $36,147.96 For a 6 year loan, you would be looking at $420.22. 6 year and zero down, you'd be looking at $526.36 per month and $37,896.45 total.

I don't know if they are currently dealing on prices more than when I bought, but the price of vehicle sounds about right for where you can get to on price without too much hassle, maybe off a couple hundred bucks. The renegade simply isn't subsidized like other vehicles, so the leases aren't made up promotional magic, they are leases. This is a bit better than you'd probably get with a third party lease, and if you insist on zero down and 6 years of paying it off to own it, you won't beat their lease. So it seems to me they are being pretty straight up with you, and the dealer likely made about $1200 on the deal between the price they gave vs. invoice, and dealer holdback.

I hate lease shopping for this reason, the math is PITA to compare stuff, and if the sales people are not going to let you sit there and do it without hassling you, it is pretty much impossible to comparison shop vs. other financing methods. If you aren't good at reading forms and contract lingo, you will have a hard time even determining if the negotiated vehicle price and buyout are reasonable.
 
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