Lease Gravity

Leases are so complicated.

(seriously though, can someone ELI5 because I now don't know what I should do - how does one go about making this decision well, in terms of financing/buying vs leasing?)
 
While I'm no expert, I'm thinking something like:

1. if APR is high (like 7%) then leasing to get the $7500 credit towards capitalized cost and then shortly after that buying the car with cash is best option. Because interest payments will chew through $7500 benefit.

2. if APR is low (like 2-3%, as I suspect it is for Air leases), then you can stay with the full lease and purchase at the end.

Roughly the interest payment on the lease and leasing costs (like $995 acquisition fee and any lease end fees) should be less than $7500 credit and you come out ahead. I made this excel sheet to compare the two for my order: https://docs.google.com/spreadsheets/d/15aW4iUtXy9NcKE4xt59T4dXM4Kbg-NN4XQSyzDvF4X0/edit?gid=0#gid=0. You can duplicate and plug away to see for your builds.
 
That is a spicy meatball. Not sure if will keep my DE order with those lease rates... the residual value looks rough.
 
Spicy indeed! Man alive that is a uuuge lease payment. Seems like Lucid use the residual value to manipulate the payments. It would appear patience would pay huge dividends, assuming the residuals migrate to the high end like the current Air leases.
 
Leases are so complicated.

(seriously though, can someone ELI5 because I now don't know what I should do - how does one go about making this decision well, in terms of financing/buying vs leasing?)
Leases are intentionally complicated, with many of the numbers buried to obscure the facts. One of the best ways to cut through this is to take the MSRP, subtract any down payment on the lease, and then divide what remains by the lease payment to get the number of months (years) you’d own the car before you fully paid for it. Typically you’re looking at 5-6 years, a dood deal is 8 years and a great deal is north of 10 years. I took a Lucid Air Pure on Lucid’s site for example: $70700 MSRP, $7101 due at delivery plus a $500 down payment, $619 monthly payment. So ($70700 - $7601) / 619 = 102 months or 8.5 years. That’s a good lease. Go to Leasehacker and you can find a detailed calculator/ breakdown and some really good deals. With incentives, ie Costco, Military discount, etc, there’s for example an Ionic 5 on the at 12.3 years, a new Audi Q6 E-tron at 9.6 years, etc.

The Dream lease shown above works out to 4.9 years. So while they show things like $7500 EV savings, etc, they are making up for that elsewhere in the deal to net out at a very poor lease deal. There are many knobs they can turn- residual value, interest rates, etc. These will determine if there’s any percentage in leasing and then buying shortly after, but my suspicion is they will have covered that off (the Gravity in current trim is too expensive to qualify for government money, so Lucid is simply adding a line showing a rebate in the lease, then making that money back elsewhere).

You can currently lease a loaded EV 9 at roughly 1/3 the cost of a moderate spec Gravity GT. We’ll see how long Lucid is able to command this premium.
 
You can currently lease a loaded EV 9 at roughly 1/3 the cost of a moderate spec Gravity GT. We’ll see how long Lucid is able to command this premium.
Even a $140K EQS SUV can be leased for around $1100. I get the premium but it’s a pretty big one
 
Even a $140K EQS SUV can be leased for around $1100. I get the premium but it’s a pretty big one
I suspect as long as they are supply constrained prices will stay high, but I also suspect they won’t stay supply constrained for very long at a >$1.5k lease payment.
 
Sounds like a follow up post to this original question might be needed.
Maybe not just yet until money factor and residual values are provided.

I remain in the "No" category, but still await the mf and rv data.

Screenshot 2025-04-17 at 11.21.02 AM.webp

 
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