Lucid Financing Quote Question

[Ksa23]

Im not trying to compare the idea of financing vs leasing. There are pros and cons to both.

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My confusion is the pricing. For example, if I lease for 36 months in Washington, their calculator gives me $2,641.31/mo. I did $0 down for arguments sake.

That's $95,076 for a 3 year lease. Is Lucid telling us the residual after 3 years is around $45,000? Even with a high lease factor (interest rate), that's almost 70% depreciation in 3 years vs a $154,000 MSRP, or ~65% vs a $139,000 MSRP.

Huh?

 

[Steveinarizona]

I am thinking that they are expecting the technology to change so dramatically that a three year old Lucid will be out of date and therefore worth less.

 

[Rominian]

Corrected this post, see below. I would like to see manufacturers make things upgradeable rather than replace them. An EV, especially one with this battery size, is really no better than an ICE vehicle environmentally if you are replacing it often.

 

[Rominian]

Oops, looks like I had loan selected. Lease for 36 mo. For the Pure awd came out to $1632/mo zero down. It does seem like a low residual value, perhaps they just have no idea what these will be worth…

 

[Steveinarizona]

Just out of curiosity I went to the BMW website and checked what they are charging for a 36 month I4 lease. The I4 M50 was at just over $ 900 a month with a down payment of just over 6K. That is a huge difference.

Now I know that this car is not equivalent to a Lucid (the M50 has the power but not the range; the 40 has better range than the M50 but less than the Lucid and less power) which is why I have a deposit on a Lucid and not a BMW but the pricing differential on leasing is way different than the differential on purchasing.

 

[Ksa23]

Lucid must be intentionally setting their Residual values extremely low to increase their short term cash flow. No vehicle depreciates 70% in 3 years. On the other hand, we'd have the right to purchase the vehicle at that low residual value, but we pay a higher than necessary lease payment for that right.

It seems the only benefit here is being able to walk away at the end of the lease. But you could just as easily finance it at a much lower monthly rate, and find someone to buyout your vehicle during your financing term after you decide to move on after 2 to 3 years.

 

[magesh]

Im not trying to compare the idea of financing vs leasing. There are pros and cons to both.

Design Your Lucid Air | Lucid Motors

Design your award-winning Lucid Air luxury electric car. Build and price a Lucid Air Grand Touring, Touring, or Pure.

www.lucidmotors.com

My confusion is the pricing. For example, if I lease for 36 months in Washington, their calculator gives me $2,641.31/mo. I did $0 down for arguments sake.

That's $95,076 for a 3 year lease. Is Lucid telling us the residual after 3 years is around $45,000? Even with a high lease factor (interest rate), that's almost 70% depreciation in 3 years vs a $154,000 MSRP, or ~65% vs a $139,000 MSRP.

Huh?

FWIW when I ran my numbers, leasing did not make $en$e to me and opted to get the loan. I did not want to pay cash either since I needed to hedge my bet$, just in case something went south @ Lucid and I needed to walk away from the car.

And if all goes well, as I hope it would, I can sell the car in say 3 years or so for a better 'residual' than what the lease was supposedly offering.

(Side note: CCFCU wrote a loan for 2.25% back in July & offered a CD special for 2.5%. I took them up on that.)

 

[Steveinarizona]

FWIW when I ran my numbers, leasing did not make $en$e to me and opted to get the loan. I did not want to pay cash either since I needed to hedge my bet$, just in case something went south @ Lucid and I needed to walk away from the car.

And if all goes well, as I hope it would, I can sell the car in say 3 years or so for a better 'residual' than what the lease was supposedly offering.

(Side note: CCFCU wrote a loan for 2.25% back in July & offered a CD special for 2.5%. I took them up on that.)

How would financing a purchase let you walk away from the car? Is there an anti-deficiency statute in your state that applies to cars?

 

[Ksa23]

How would financing a purchase let you walk away from the car? Is there an anti-deficiency statute in your state that applies to cars?

I assume he means finding another buyer who would buy him out (i.e. pay his lender directly the remaining financed amount in exchange for the title). Something I also would plan for if I go the financing route.

 

[Maverick]

My guess is that they're probably not all that interested in doing a lot of leasing and/or they're not really structured well to do it yet. In either case, I think they probably wanted to get something out there for people who had been asking about it, but they probably did not fully think through the mechanics of everything. Fairly common in a lot of areas - good intentions, good on paper, but maybe not the best in execution or communication.

 

[gmoney]

Financing will always be a better deal then leasing because no history on residual value…I believe Tesla was the same in the beginning

 

[magesh]

I assume he means finding another buyer who would buy him out (i.e. pay his lender directly the remaining financed amount in exchange for the title). Something I also would plan for if I go the financing route.

Yes. True, I will take a beating .. but not as significantly, I hope, as doing a lease. Just a hope - worse case scenario.

As @Maverick states, I don't think Lucid did not want to do leasing as their prime. THey were not interested in doing trade in either. THey wanted cash pfbly. Or go thur' the bank route. (hence Bofa came into the picture a few months ago.)

 

[DeaneG]

...An EV, especially one with this battery size, is really no better than an ICE vehicle environmentally if you are replacing it often.

It's extremely rare to replace a battery on an EV, Bolts excluded. I'm not sure why "replace the battery" gets mentioned so much - maybe FUD spread by fossil fuel interests.

 

[rreddrop]

It's extremely rare to replace a battery on an EV, Bolts excluded. I'm not sure why "replace the battery" gets mentioned so much - maybe FUD spread by fossil fuel interests.

Rare now. What about in 10 years? 15 years? The battery has a lifespan - and each manufacturer's lifespan will be different, I have to imagine. Since most EV's haven't been on the road or through their battery life cycle yet, it will be interesting to see the demand vs supply in that amount of time when so many will need the replacement.

 

[Rominian]

In 10 years battery technology could totally change, my hope is that new tech will be able to be put into these kind of vehicles, making them even more efficient.

 

[Steveinarizona]

Rare now. What about in 10 years? 15 years? The battery has a lifespan - and each manufacturer's lifespan will be different, I have to imagine. Since most EV's haven't been on the road or through their battery life cycle yet, it will be interesting to see the demand vs supply in that amount of time when so many will need the replacement.

Batteries are guaranteed to last at least 8 years (at 70% of original capacity)and will likely last a lot longer. How many 10-15 year old ICE cars are still on the road.

 

[DRWHO42]

In 10 years battery technology could totally change, my hope is that new tech will be able to be put into these kind of vehicles, making them even more efficient.

Agreed

 

[DRWHO42]

My personal preference is to buy through a loan. I tend to keep my cars and not have to deal with restrictions on miles, etc.

Ideally in a few years I would trade up but my goal would be to keep the car for at least 6-7 years unless there is a massive change in the Lucid lineup and the make a good offer for me to change.

 

[DeaneG]

Rare now. What about in 10 years? 15 years? The battery has a lifespan - and each manufacturer's lifespan will be different, I have to imagine. Since most EV's haven't been on the road or through their battery life cycle yet, it will be interesting to see the demand vs supply in that amount of time when so many will need the replacement.

There is quite a bit of data from ten years of Tesla vehicles with various battery chemistries. It appears that generally, the battery will last the useful life of the car - well over 100K miles, as much as 300K+ miles depending on the owner's range requirements.

 

[n8236]

Lucid must be intentionally setting their Residual values extremely low to increase their short term cash flow. No vehicle depreciates 70% in 3 years. On the other hand, we'd have the right to purchase the vehicle at that low residual value, but we pay a higher than necessary lease payment for that right.

It seems the only benefit here is being able to walk away at the end of the lease. But you could just as easily finance it at a much lower monthly rate, and find someone to buyout your vehicle during your financing term after you decide to move on after 2 to 3 years.

If the residual value holds, maybe it’s worth considering a used one