LUCID Gravity Lease vs Finance

[dhruv]

The LUCID Gravity Calculator on the website is ready for financing vs leasing
The lease is definitely more expensive than the Air (not just the higher MSRP but seems to have higher MF / APR), wondering if it is still worth leasing

 

[sri]

Also it seems APY coming to 6% on Lease.

 

[dhruv]

How did you arrive at 6%?
Can someone make an educated guess on what residual values (% of original MSRP) we might see for a Gravity GT / DE?

 

[sri]

How did you arrive at 6%?
Can someone make an educated guess on what residual values (% of original MSRP) we might see for a Gravity GT / DE?

There is a difference of $200 with a 0% downpayment and $40,000 downpayment which comes to 6%, nor sure if its correct way of calculating APY for lease.

 

[TahoeMichael]

I've never leased a vehicle, always just purchased. For me, I can afford to pay cash, and so any form of financing makes the vehicle more expensive. I'm not sure my thinking is particularly sophisticated here, but I really only see two potential benefits to leasing:

1) If the interest rate was sufficiently low, and the EV incentive is passed along as a price reduction, then you could save money.
2) It's a form of insurance, protecting you from excessive depreciation, which might be a particular problem if Lucid were to go belly up. But that's expensive insurance.

My expectation is that Lucid isn't going to offer a lease deal that will seem worthwhile, but we'll see. Maybe if you're the sort of person who likes to move to a new car every few years, and you're financing either way, then leasing could make sense.

 

[newlucidguy]

There are also a lot of incentives on the Air and I don't think they are on the gravity, which will make the lease more expensive compared to the air if you're just looking at MSRP and lease rates.

 

[fadooly]

Lucid is building up the demand, there is for sure now demand more than supply, there is no reason to sell Gravity less than MSRP or give good leasing offers.
I bet in 2 years the story will be different when demand is exhausted and there is supply + model Earth will cannibalize the Gravity

 

[NoseyReporter]

Spicy indeed but still just an estimate. It does give me a pause though.

It makes sense from a business stand point, get everyone off the table who is willing to go for a Gravity now, then trickle in offers as needed. Only time will tell.

A test drive will determine where on the spectrum I fall. Admittedly, my bikes account for nearly 90% of my annual distance travelled. The Gravity is just a nice to have.

 

[cb23]

I'm planning on paying cash for a GT, but I looked at the DE lease as a way to get an earlier delivery, get the $7.5k credit, and have the option of walking away from the car at the end of the lease (if I don't want to buy the car, for cash, at the end of the term). I've never leased, this site was very helpful: https://www.leaseguide.com/lease08/ (along with some posts on this forum). As they explain it, there are two components to the payment: a depreciation fee, which reimburses the leasing company for the depreciation, and the finance fee, which is the interest they earn. The depreciation fee is basically the price of the car at the start of the lease, minus the price at the end, paid monthly. There's no explicit markup here, ie no "profit" built in for them. Then the finance fee is effectively charged on the average cost of the car over the term, which is dropping due to depreciation. So interestingly, if you're going to buy the car at the end, you hope they set a lower residual; the cost of the car is the same in the end, paid more in the monthly depreciation payments and less at the end when you buy the car; but you pay less in interest because it's calculated on a lower car value towards the end of the term.

The DE lease calculator doesn't provide info on residual value and money factor, but I took a guess at effectively a 6.75% interest rate (the same as their loan) and a typical depreciation of 20% the first year, 15% in following years, and tried to match the payments the calculator shows for different lease terms. I had to make big changes to the depreciation to come close to their payments (more in the first year, less in subsequent years), so I don't have high confidence in these numbers, but I found if I did the 18 month lease to get the lowest financing cost, I'd pay ~$10k in interest. So not worth it to get the $7.5k. This was with the default down payment. There is a discussion somewhere else on the forum about a higher down payment - there was a comment made that paying a higher down payment was not a good idea. I can't recall/reconstruct the reasoning, I think it had to do with the insurance payout if the car was totaled. I'd appreciate if if someone can comment.

The lease calculator will only let me go up to about $41k for the down payment.

My SA couldn't give me residual value and money factor. They have it obviously to do the calculator. I asked him to call me if he does get those numbers and the DE order book is still open. I'll redo the calculation with real residual / money factor when I can but I expect the result won't be that much different.

It got easier for me to get a handle on all this when I started to think of leasing as: the leasing company buys the car, you pay them for its use during the term, and then they sell it. Then there are details (fees) on either end of the lease term. This helps make sense of other comments people in the forum have made, such as not being allowed to get custom licence plates.

 

[ejesse]

I can't recall/reconstruct the reasoning, I think it had to do with the insurance payout if the car was totaled. I'd appreciate if if someone can comment.

That's correct, if the car is totaled on a lease you eat any down payment, which is the argument for only ever doing zero down on a lease.

 

[msaunders9430]

I'm planning on paying cash for a GT, but I looked at the DE lease as a way to get an earlier delivery, get the $7.5k credit, and have the option of walking away from the car at the end of the lease (if I don't want to buy the car, for cash, at the end of the term). I've never leased, this site was very helpful: https://www.leaseguide.com/lease08/ (along with some posts on this forum). As they explain it, there are two components to the payment: a depreciation fee, which reimburses the leasing company for the depreciation, and the finance fee, which is the interest they earn. The depreciation fee is basically the price of the car at the start of the lease, minus the price at the end, paid monthly. There's no explicit markup here, ie no "profit" built in for them. Then the finance fee is effectively charged on the average cost of the car over the term, which is dropping due to depreciation. So interestingly, if you're going to buy the car at the end, you hope they set a lower residual; the cost of the car is the same in the end, paid more in the monthly depreciation payments and less at the end when you buy the car; but you pay less in interest because it's calculated on a lower car value towards the end of the term.

The DE lease calculator doesn't provide info on residual value and money factor, but I took a guess at effectively a 6.75% interest rate (the same as their loan) and a typical depreciation of 20% the first year, 15% in following years, and tried to match the payments the calculator shows for different lease terms. I had to make big changes to the depreciation to come close to their payments (more in the first year, less in subsequent years), so I don't have high confidence in these numbers, but I found if I did the 18 month lease to get the lowest financing cost, I'd pay ~$10k in interest. So not worth it to get the $7.5k. This was with the default down payment. There is a discussion somewhere else on the forum about a higher down payment - there was a comment made that paying a higher down payment was not a good idea. I can't recall/reconstruct the reasoning, I think it had to do with the insurance payout if the car was totaled. I'd appreciate if if someone can comment.

The lease calculator will only let me go up to about $41k for the down payment.

My SA couldn't give me residual value and money factor. They have it obviously to do the calculator. I asked him to call me if he does get those numbers and the DE order book is still open. I'll redo the calculation with real residual / money factor when I can but I expect the result won't be that much different.

It got easier for me to get a handle on all this when I started to think of leasing as: the leasing company buys the car, you pay them for its use during the term, and then they sell it. Then there are details (fees) on either end of the lease term. This helps make sense of other comments people in the forum have made, such as not being allowed to get custom licence plates.

Leasehackr is a great resource I've been using to understand all this.
The lease vs. finance feature helps, but you do need important details like money factor and residual value.
I played with it to try and get to the payment numbers the Lucid configuration calculator provides.
I adjusted the money factor in the Leasehackr tool to match the APR offered by Lucid for financing.
If I understand correctly, lease rates are usually higher than financing rates.
Just my understanding, which continues to grow.

 

[HaltheAerialist]

Out of curiosity, I used the lease calculators on the Lucid site to compare Gravity with an Air GT that had a similar net capital cost. Net capital cost for the Gravity was $104,120 and for the Air was $107,270. I specified a 24-month lease with 0 down and 15,000 miles. The amount due at delivery was pretty close ($1768 for Gravity and $1816 for Air--note that Air has a $500 order deposit and Gravity requires $1000, so you're really paying more at delivery for Gravity). The monthly payments were very different: $1999 for Gravity and $1546 for Air. The calculator doesn't show the residual value, but this certainly suggests a much higher interest rate (money factor) for Gravity leases.

 

[HC_79]

Out of curiosity, I used the lease calculators on the Lucid site to compare Gravity with an Air GT that had a similar net capital cost. Net capital cost for the Gravity was $104,120 and for the Air was $107,270. I specified a 24-month lease with 0 down and 15,000 miles. The amount due at delivery was pretty close ($1768 for Gravity and $1816 for Air--note that Air has a $500 order deposit and Gravity requires $1000, so you're really paying more at delivery for Gravity). The monthly payments were very different: $1999 for Gravity and $1546 for Air. The calculator doesn't show the residual value, but this certainly suggests a much higher interest rate (money factor) for Gravity leases.

The Air does have a bunch of incentives to make the leasing more favorable and makes sense given its age on the market. I was never expecting to see a like for like leasing cost on similarly priced Air vs Gravity but the numbers provided do seem like Lucid is doing some trickery resulting in the cost coming in high. The $7,500 EV incentive seems to have been absorbed somewhere else and is being used more for Lucid's benefit than the customer. I had in my head leasing costs of $1000 to $1500 a month which is typically in line with the competitors on new models. Seems Lucid feels $1500 to $2000 is more appropriate.

 

[Lucidale]

Also worth factoring is when you lease a vehicle that has a price greater than the EV incentive threshold, you still get the $7500 off cap cost. So even if you want to purchase the vehicle, you’ll save money by leasing and buying out as early as allowable. I have paid cash for most new cars in the past as well, but with high end EVs right now, leasing has benefits. Not to mention the lost interest in the cash you’re handing over. If you keep that in a high yield savings during the lease it will earn you money for those 2-3 years. Granted if you have that money in an investment account right now, you’re likely losing tons due to the market.

 

[marsarbu]

The Air does have a bunch of incentives to make the leasing more favorable and makes sense given its age on the market. I was never expecting to see a like for like leasing cost on similarly priced Air vs Gravity but the numbers provided do seem like Lucid is doing some trickery resulting in the cost coming in high. The $7,500 EV incentive seems to have been absorbed somewhere else and is being used more for Lucid's benefit than the customer. I had in my head leasing costs of $1000 to $1500 a month which is typically in line with the competitors on new models. Seems Lucid feels $1500 to $2000 is more appropriate.

That is Cayenne / Range Rover territory. Sure, very different apples, but still.

 

[illopp00]

Also worth factoring is when you lease a vehicle that has a price greater than the EV incentive threshold, you still get the $7500 off cap cost. So even if you want to purchase the vehicle, you’ll save money by leasing and buying out as early as allowable. I have paid cash for most new cars in the past as well, but with high end EVs right now, leasing has benefits. Not to mention the lost interest in the cash you’re handing over. If you keep that in a high yield savings during the lease it will earn you money for those 2-3 years. Granted if you have that money in an investment account right now, you’re likely losing tons due to the market.

There must some calculation that figures a small downpayment to cancel out higher accrued interest payments. But yes I look at the leasing for EV tax credit for high-end cars and High Income as getting a couple free options instead....

 

[illopp00]

I did play with the lease calculator with potentially my exact configuration and found it was still cheaper to go for a higher mile lease vs eat some over mileage costs. So, the idea is to get more miles than you think you need.

 

[Kevmark58]

The LUCID Gravity Calculator on the website is ready for financing vs leasing
The lease is definitely more expensive than the Air (not just the higher MSRP but seems to have higher MF / APR), wondering if it is still worth leasing

Where is this calculator? I cannot find it on the Lucid website, nor in a search. I have a Gravity on order.

 

[HC_79]

Where is this calculator? I cannot find it on the Lucid website, nor in a search. I have a Gravity on order.

Post in thread 'Lease Gravity'

Wednesday at 1:49 PM

where did you find this lease info? I am a GDE (and GGT) order holder, and I can't see this in my user profile on the site, nor have I received any emails.

If you log into your Lucid account it will give you the option to configure a GDE or GGT. When you get to the final spec you'll be able to mess around with the payment calculator then. One thing is for certain though, no one is getting special financing rates or great lease deals like the Air. It's basically in line with what you'd expect for e new model, normal interest and lease rates.

• HC_79

• 

 

[TahoeMichael]

Also worth factoring is when you lease a vehicle that has a price greater than the EV incentive threshold, you still get the $7500 off cap cost. So even if you want to purchase the vehicle, you’ll save money by leasing and buying out as early as allowable. I have paid cash for most new cars in the past as well, but with high end EVs right now, leasing has benefits. Not to mention the lost interest in the cash you’re handing over. If you keep that in a high yield savings during the lease it will earn you money for those 2-3 years. Granted if you have that money in an investment account right now, you’re likely losing tons due to the market.

My working assumption is that the leasing costs are going to completely eat up the $7500 savings. I agree that one can counter-balance that somewhat by calculating the investment return on the money you saved by not paying cash up-front. I'd like to have Lucid clearly disclose the financing rate and depreciation they're assuming for the different lease terms and mileage allowances, so someone could build a spreadsheet that really compares the options. As I've never actually negotiated a vehicle lease before, I don't know how it works, but I assume that at least the residual value has to be disclosed as part of the lease contract, allowing one to back into the finance rate?