If leasing is not available, would you cancel your Gravity order?

If leasing is not available, would you cancel your Gravity order?

  • Yes

    Votes: 32 65.3%
  • No

    Votes: 17 34.7%

  • Total voters
    49
How would interest costs be saved paying upfront on a lease? Isn't that interest already factored into the lease at signing?
For example, you could lease a vehicle and then buy it out early. In that case, you’d be responsible for the residual and all the monthly payments, but only the interest for the time you had the lease. It very much depends on the lease language.

Some of us (at least @SaratogaLefty and myself) did this with Hyundai/Genesis; I leased the Ioniq 5, so that I could get the $7500 credit, and then paid off the lease in a few days, incurring only the most minimal of interest charges. Saved me a ton of money over buying it outright, since the $7500 credit only applies to leases.

I do not know if Lucid’s lease paperwork allows this.
 
I would think the chunk of money would lower the interest paid, but depending on how much you're talking, that money could go toward the residual if you want to buyout without needing to finance.

Large down payment lowers monthly lease costs. Interest still there, but less?
It's 2 different things. A large down payment just reduces the monthly but that monthly will have interest baked into it over the term. Yes, the amount your financing on the lease will be less meaning less interest but it's still there. An upfront payment for the entire lease would eliminate the interest that was baked into the monthly. As @borski says, it really depends on the language Lucid or BoA has in its leasing agreement.

In the example below $106,678.63 (over 39 months) vs $104,871.39 (Pay upfront)

1741726185159.webp


1741726219770.webp
 
For example, you could lease a vehicle and then buy it out early. In that case, you’d be responsible for the residual and all the monthly payments, but only the interest for the time you had the lease. It very much depends on the lease language.

Some of us (at least @SaratogaLefty and myself) did this with Hyundai/Genesis; I leased the Ioniq 5, so that I could get the $7500 credit, and then paid off the lease in a few days, incurring only the most minimal of interest charges. Saved me a ton of money over buying it outright, since the $7500 credit only applies to leases.

I do not know if Lucid’s lease paperwork allows this.
Kinda like with a house?
Pay off early or even extra payments to reduce interest incurred?

Only benefit is the reduced price from the $7500 credit?
Otherwise just pay cash?
 
It's 2 different things. A large down payment just reduces the monthly but that monthly will have interest baked into it over the term. Yes, the amount your financing on the lease will be less meaning less interest but it's still there. An upfront payment for the entire lease would eliminate the interest that was baked into the monthly. As @borski says, it really depends on the language Lucid or BoA has in its leasing agreement.

In the example below $106,678.63 (over 39 months) vs $104,871.39 (Pay upfront)

View attachment 27163

View attachment 27164
Makes sense.

I mentioned this in response to @borski about making extra payments, in addtion to the monthlys.
I did that when financing a house purchase.
Do car leasors allow the same with cars?
 
For example, you could lease a vehicle and then buy it out early. In that case, you’d be responsible for the residual and all the monthly payments, but only the interest for the time you had the lease. It very much depends on the lease language.

Some of us (at least @SaratogaLefty and myself) did this with Hyundai/Genesis; I leased the Ioniq 5, so that I could get the $7500 credit, and then paid off the lease in a few days, incurring only the most minimal of interest charges. Saved me a ton of money over buying it outright, since the $7500 credit only applies to leases.

I do not know if Lucid’s lease paperwork allows this.
Smart! This is the appealing thing about the leasing at the moment. I’ll gladly take $7,500 in my pocket but I hope that Lucid gets these cars out before the credit disappears.
 
For example, you could lease a vehicle and then buy it out early. In that case, you’d be responsible for the residual and all the monthly payments, but only the interest for the time you had the lease. It very much depends on the lease language.

Some of us (at least @SaratogaLefty and myself) did this with Hyundai/Genesis; I leased the Ioniq 5, so that I could get the $7500 credit, and then paid off the lease in a few days, incurring only the most minimal of interest charges. Saved me a ton of money over buying it outright, since the $7500 credit only applies to leases.

I do not know if Lucid’s lease paperwork allows this.
So how did you know the balance to pay?
The leasing company shows the running lease balance in your account?

Capitalized cost minus funds paid upfront at start of lease minus residual value = early payoff amount
 
For example, you could lease a vehicle and then buy it out early. In that case, you’d be responsible for the residual and all the monthly payments, but only the interest for the time you had the lease. It very much depends on the lease language.

Some of us (at least @SaratogaLefty and myself) did this with Hyundai/Genesis; I leased the Ioniq 5, so that I could get the $7500 credit, and then paid off the lease in a few days, incurring only the most minimal of interest charges. Saved me a ton of money over buying it outright, since the $7500 credit only applies to leases.

I do not know if Lucid’s lease paperwork allows this.
This is what I was thinking. Get the $7500 credit and not pay any lease interest. It depends on how bad the money factor ends up being - I have no idea how Lucid may incentivize the leases (I'm guessing they won't start with a super-low rate) so if they're charging "market" interest rates then the interest expense could be relatively significant. Or I can also put down a large down payment and minimize the financed principle that way.

It is a good catch that if I total the vehicle during the lease, I may end up with a problem.

In addition to the tax credit, which is significant, I like the option to bail after the lease ends. If the car ends up being plagued with early-off-the-assy-line bugs, I can walk away at the end of the lease and get into another one without having to try to sell a depreciated car that I know has issues. Or if something happens with Lucid in the meantime.... or just maybe I can negotiate a better deal at the end of the lease and beat some of the depreciation. Example: say the residual is, I dunno, 60%? but the market is at 40%, maybe I can tease a happy medium that allows us both to have a win. I'll likely pay a higher interest rate on a used car loan than I would have on a new car loan, but I'll only be paying that higher rate on a smaller leftover amount, plus I'll have saved $7500 at least on the total cost. Or I could just pay cash at that point.

Still, to answer the overall question of the thread - I won't cancel if leasing is not available. I still want the car - but it will be nice to save some bucks and have a bailout option through a lease, if I can.
 
It is a good catch that if I total the vehicle during the lease, I may end up with a problem.
I read on this forum (see comments #5 and #6 here) and confirmed with my SA that Lucid provides GAP protection during the lease period.
So, if car is totalled during lease period, Lucid would accept payment from your insurance company.
 
Kinda like with a house?
Pay off early or even extra payments to reduce interest incurred?

Only benefit is the reduced price from the $7500 credit?
Otherwise just pay cash?
Yes; my plan was to buy it, because the lease rate sucked. If I could have gotten it at $7500 off without leasing it, I'd have done that. But this was the only way to get the $7500 and only took a bit of extra paperwork and a few days. I confirmed it multiple times with the dealer and with Hyundai beforehand.

I don't know about overpaying to reduce interest incurred; you'd have to look into that.
 
So how did you know the balance to pay?
The leasing company shows the running lease balance in your account?

Capitalized cost minus funds paid upfront at start of lease minus residual value = early payoff amount
You simply request a payoff letter from the lessor, and they give you the full amount which would cover the cap cost, minus funds paid, plus interest for the number of days you've had the lease. Because I had to snail mail a check, I added on like 5-7 days of interest to the payoff, because the few bucks if I overpaid would eventually get refunded to me and that was much easier than later realizing I still owed them money and still had an active lease.

Hyundai's finance site had a button to click for the payoff amount. Super simple.

This is what I was thinking. Get the $7500 credit and not pay any lease interest. It depends on how bad the money factor ends up being - I have no idea how Lucid may incentivize the leases (I'm guessing they won't start with a super-low rate) so if they're charging "market" interest rates then the interest expense could be relatively significant. Or I can also put down a large down payment and minimize the financed principle that way.
it just depends on if Lucid's lease paperwork allows this. I have absolutely no idea if it does.

It is a good catch that if I total the vehicle during the lease, I may end up with a problem.
Lucid's lease agreement includes language for GAP coverage, evidently. Of course, read your eventual paperwork to ensure.
 
It's 2 different things. A large down payment just reduces the monthly but that monthly will have interest baked into it over the term. Yes, the amount your financing on the lease will be less meaning less interest but it's still there. An upfront payment for the entire lease would eliminate the interest that was baked into the monthly. As @borski says, it really depends on the language Lucid or BoA has in its leasing agreement.

In the example below $106,678.63 (over 39 months) vs $104,871.39 (Pay upfront)

View attachment 27163

View attachment 27164
Based on that depreciation I should be able to get an IQ in 4 years for like 40k…that’s like a bad lease or buying deal…
 
I won't cancel my order if there is no leasing option. I keep my cars/trucks until they no longer run (my 2011 Cadillac CTS-V is a prime example). I want there to be a time when I have NO payments. I'm willing to take the (better than average) chance that Lucid will be here for the long term. All the comments here make me think that I don't take care of my money or consider options as well as I should!
 
All the comments here make me think that I don't take care of my money or consider options as well as I should!
Some people love to pay cash for everything and others don't same as why some people will always lease and others frown upon it. No decision is bad it's just ultimately how you manage your finances. For me, when you're talking a $100K+ car, that's a lot of cash to pay on a very aggressive depreciating asset vs putting that cash into stock etc and make money off it (hopefully). so financing or leasing is particular has always been favorable to me. Do what's best for you, not what others are telling you do. :)
 
  • Like
Reactions: DBV
OK.

I suppose Lucid has been discounting heavily with the Air lease deals I see posts about.

Leases allow companies to minimize car depreciation, correct?
Instead of cars sitting unsold and depreciating, leases are offered if sales are slow or slower than planned.
So lease revenue offsets depreciation losses?

The hope is once the leases end, the remaining depreciation loss is offset either by a new lease or a sale of the previously leased car, correct?
The trick is how much to charge in finance fees during the lease period and what residual value to recieve if lease is not renewed, correct?

I had been planning to make a sizeable down payment to minimize monthly payments and finance charges.
However, as I've seen the 60% residual values on '23 Airs (two years old), I considerd the possibility that a three year old Gravity might have a 50-55% residual value.
So, the down payment planned at the beginning of a purchase could instead by used at the end of a three year lease while also gaining the traditional benefits (mainly uncertainty of company continued existence) of a lease. Even though three years isn't much protection against a company's future changing.
Consider that the Air's depreciation will not be an apples to apples comparison to the Gravity or further EV market. There are 2 things likely to not repeat that are part of that depreciation
:EV tax credits; even embedded in the lease loophole this takes 7500 off the hood immediately.
:Early Airs were subject to a MASSIVE MSRP price cut by the OEM which I don't see repeating out of the pandemic.
 
I won't cancel my order if there is no leasing option. I keep my cars/trucks until they no longer run (my 2011 Cadillac CTS-V is a prime example). I want there to be a time when I have NO payments. I'm willing to take the (better than average) chance that Lucid will be here for the long term. All the comments here make me think that I don't take care of my money or consider options as well as I should!
I'm kinda like you.
I keep cars a long time as well.
I'll most likely buy if leasing isn't available.
The only thing that would change that is if a car as good as Gravity is available and the financials are good or better than with Lucid.

I've never leased before because I've never seen a leasing scenario that was better than buying considering my long term ownership stance. I've also never planned well in advance for a car purchase like I've been doing since 2023. Deciding on an ev and having the time to research and plan is contrary to my past purchasing.

The $7.5k tax credit is a big factor. And yet, even w/o it I'll probably still buy. I'm in a position to pay for car depreciation during a lease (dependent on the money factor) and then buyout the lease (depending on the residual value) in cash. Based on my calculations, with the help of the tax credit, I will save around $10k overall.

I hate car payments. No shade on those who perpetually lease for a new car more frequently. Just not my style. With a 36 month lease I will shorten my normal 60 month financing and related payments by 24 months and come out ahead financially. All this depends on what Lucid announces as lease/buy options with Gravity.

Do what works for you.
It's your money.
 
Consider that the Air's depreciation will not be an apples to apples comparison to the Gravity or further EV market. There are 2 things likely to not repeat that are part of that depreciation
:EV tax credits; even embedded in the lease loophole this takes 7500 off the hood immediately.
:Early Airs were subject to a MASSIVE MSRP price cut by the OEM which I don't see repeating out of the pandemic.
Agree.
I've factored the elimination of the tax credit into my decision.

Help me out here: The price cut was in 2024 and Lucid started offering leases in 2023, correct?
So, people who leased in 2023 have higher residual values (percentage) than 2024 leasees?

I'm not counting on a 202_ price cut on Gravities. Might happen, might not.
 
@HC_79 and @msaunders9430 -I appreciate your thoughts. I originally planned to get an AGT, but after sitting in it, it was just too low for me. Since then, I've been saving for the Gravity (and now also looking at a Cadillac Escalade IQ as well as the Volvo EX-90 as they are made here in South Carolina alleviating some of my service availability concerns), so my plan is to pay cash and hope that many of the bugs in the Air family have been worked out. Based on the fact that I keep my vehicles until they fall apart, I think that my Gravity order is going to go forward-regardless of lease options.
 
@HC_79 and @msaunders9430 -I appreciate your thoughts. I originally planned to get an AGT, but after sitting in it, it was just too low for me. Since then, I've been saving for the Gravity (and now also looking at a Cadillac Escalade IQ as well as the Volvo EX-90 as they are made here in South Carolina alleviating some of my service availability concerns), so my plan is to pay cash and hope that many of the bugs in the Air family have been worked out. Based on the fact that I keep my vehicles until they fall apart, I think that my Gravity order is going to go forward-regardless of lease options.
Hopefully others will weigh in with their thoughts. I'm new to this leasing stuff.

You could pay out that cash in two phases over time in two ways instead of all at once. Choices:

1. Lease to get $7.5k credit off MSRP. Ask for lease buyout option and pay off lease right away with cash. @borski isn't this what you did with your Ioniq 5?

2. Lease to get $7.5k credit, pay lease over however many years you decide, look at residual value, and decide to either pay residual with cash or find a used Gravity (if lower priced than residual on your lease) and pay cash. One challenge is finding the exact used Gravity with the features you want and decent mileage. Exploring a lease option can't hurt. Get details and then decide.

Of course paying cash upfront saves you more on interest costs during a lease than the $7.5k credit unless immediate lease payoff.

If you definitely know you want to keep your Gravity, consider a slush fund for future battery replacement. Who knows, by time one is needed the price should be quite a bit lower. By time the warranty expires there should be new battery tech.
 
@HC_79 and @msaunders9430 -I appreciate your thoughts. I originally planned to get an AGT, but after sitting in it, it was just too low for me. Since then, I've been saving for the Gravity (and now also looking at a Cadillac Escalade IQ as well as the Volvo EX-90 as they are made here in South Carolina alleviating some of my service availability concerns), so my plan is to pay cash and hope that many of the bugs in the Air family have been worked out. Based on the fact that I keep my vehicles until they fall apart, I think that my Gravity order is going to go forward-regardless of lease options.
Between Atlanta and Charlotte, you've got 2 service center choices. Not bad.
 
Some people love to pay cash for everything and others don't same as why some people will always lease and others frown upon it. No decision is bad it's just ultimately how you manage your finances. For me, when you're talking a $100K+ car, that's a lot of cash to pay on a very aggressive depreciating asset vs putting that cash into stock etc and make money off it (hopefully). so financing or leasing is particular has always been favorable to me. Do what's best for you, not what others are telling you do. :)
Spot on. I have many friends for whom buying in cash is easier, because they like owning and knowing that nobody can take it away from them and it's theirs. They also feel more comfortable in that case modifying the car, adding PPF, etc.

That said, those folks are missing out on opportunity in the market, depending on the rate. If Lucid offers, for example, a 0.99% financing rate like they have on the Pure right now, that's a no brainer, since if you can't make more than 0.99% in the market (even this market), you aren't paying any attention lol. You could invest in a safe bond and make more.

So that's what it's all about - you just have to do the math of opportunity cost in the market vs. cost of financing or leasing.

Or... just buy it because you want to own it. There's nothing wrong with that. It's a car, not an ETF. :)
 
Back
Top