LUCID Gravity Lease vs Finance

[Ron_Burgundy]

This may have been stated already, but the real variable here is the residual, right? Do we have a sense of what Lucid is using for that?

 

[TFCooper]

This may have been stated already, but the real variable here is the residual, right? Do we have a sense of what Lucid is using for that?

Totally agree. All these analyses that determine the "money factor" or true interest cost (down to the basis point!) just serve to obfuscate what's more important. Since the residual value assumption dominates the lease-or-buy decision, it's important to figure out what it is for you.
For those of us who can pay cash, we can use our opportunity cost of funds as the assumed interest rate and back out the implied residual value. For those of us who need to finance the car, we can use the interest rate for a standard car loan as the assumed interest rate. That cost of funds might be 3% or so higher than the opportunity cost of funds for a cash buyer.

As kort6776 said, electric cars historically depreciate at a faster rate than ICE cars, so their actual residual value has been quite low. My sense is that assumed residual values for leases have been higher than actual residual values, but I have no hard data.

 

[kort6776]

As kort6776 said, electric cars historically depreciate at a faster rate than ICE cars, so their actual residual value has been quite low. My sense is that assumed residual values for leases have been higher than actual residual values, but I have no hard data.

the residuals are usually set quite high which allows the manufacturer to offer a lower lease rate. the high depreciation usually makes buying out the car at the end of the lease foolish. for example my Ipace lease ended in may, the residual value was almost $20K higher than the street value of the car, despite the car being pristine with very low miles Jaguar was inflexible about negotiating a buyout deal. their loss. I bet the car is sitting in storage somewhere.

 

[borski]

Totally agree. All these analyses that determine the "money factor" or true interest cost (down to the basis point!) just serve to obfuscate what's more important. Since the residual value assumption dominates the lease-or-buy decision, it's important to figure out what it is for you.
For those of us who can pay cash, we can use our opportunity cost of funds as the assumed interest rate and back out the implied residual value. For those of us who need to finance the car, we can use the interest rate for a standard car loan as the assumed interest rate. That cost of funds might be 3% or so higher than the opportunity cost of funds for a cash buyer.

As kort6776 said, electric cars historically depreciate at a faster rate than ICE cars, so their actual residual value has been quite low. My sense is that assumed residual values for leases have been higher than actual residual values, but I have no hard data.

And, as a reminder, all of this only matters if you plan on selling the car in the first few years. If you plan on keeping it for 5-7 years, it doesn’t matter nearly as much, as the depreciation eventually bottoms out.

 

[DS9]

I bought out my lucid air after 2 months of leasing it. There was no penalty, and I didn’t have to pay interest that would have been accrued for the remaining term.

Did your lease agreement mention anything about the $7500 lease incentive recapture? My AT lease has that language in it.

 

[fisheral]

Until Lucid gets its shambolic lease return process into better shape, I would consider purchasing over leasing.

 

[kort6776]

Until Lucid gets its shambolic lease return process into better shape, I would consider purchasing over leasing.

or avoid lucid, period.

 

[VeryPowerful]

Did your lease agreement mention anything about the $7500 lease incentive recapture? My AT lease has that language in it.

Does the agreement mention conditions for the ev tax credit recapture? I assume they only do that in specific situations.

 

[CWedge411]

Until Lucid gets its shambolic lease return process into better shape, I would consider purchasing over leasing.

I'm going to be returning a lease shortly, can you expand on what you mean by shambolic lease return process?