I’m in Texas, looking at a Premium RWD long-range Mach-E. The dealer’s offering options to buy it now or lease with a buyout later. I’ve always bought my cars, so leasing is new for me, but the $7,500 discount on the lease sounds too good to ignore.
The salesman mentioned the lease price would be $43,000, but I haven’t gotten a full breakdown on how it all works. Anyone done this recently or have insights on the lease/buyout path?
Tell the salesperson you’re trying to compare the total costs of leasing and then buying, versus just buying it now. You need the lease’s total payments, buyout price (residual), and the out-the-door cost if you financed it instead.
To find the full lease ownership cost: [lease payments] + [money paid at signing] + [(residual + sales tax) @ an estimated APR (maybe 7% for good credit)]. Don’t forget you’ll pay tax on the buyout and likely won’t get 0% APR. Unless, of course, you plan to pay cash for the buyout.
@Vick
Does the residual value change if the market changes, or is it fixed?
Jean said:
@Vick
Does the residual value change if the market changes, or is it fixed?
It’s set at the lease start. Market value can change, but that won’t impact the residual. If the market drops, that’s not your problem.
@Vick
…unless you want to buy it out?
In that case, it’s like if you’d financed from the start. You’ll pay the residual, not market value. If the car’s worth less than the residual, you can just return it. If you financed it, though, you might have negative equity if you try to trade it in after 3 years.
I went through this at the end of September. Got a $9,300 lease incentive and paid it off three weeks later. Just note you’ll have to pay sales tax twice, so factor that into your math.
Luther said:
I went through this at the end of September. Got a $9,300 lease incentive and paid it off three weeks later. Just note you’ll have to pay sales tax twice, so factor that into your math.
Best not to buy it out right away. Lease payments already include interest, so paying it off early means prepaying that interest—and you lose out on potential returns if you’d kept the cash.
Luther said:
I went through this at the end of September. Got a $9,300 lease incentive and paid it off three weeks later. Just note you’ll have to pay sales tax twice, so factor that into your math.
Texas has some unique tax laws on leases. Do you remember the tax amounts you paid initially and for the buyout?
Also in Texas and leased a Mach-E, so here’s my experience:
Mine’s a GT PP, and the lease payment (including tax) is $520 a month, totaling $18,720 over the lease. My buyout is $28K, and I’d pay taxes on that if I bought it out, making the total around $48K.
Buying it would’ve been a little over $60K with taxes and fees, so leasing saved me around $12K. Plus, I didn’t put down the $30K I planned, which is earning a 5% return, adding about $5K to the savings. And the guaranteed buyout value is a nice cushion if EVs depreciate fast.
You take the final negotiated price, subtract the residual, and finance the difference. The residual is what you’d pay to own the car at the end of the lease, or you can refinance. My 2023 Premium’s residual on a 48-month lease was $14K, so I might have more flexibility at the lease’s end.
Forget focusing on it as a lease. Look at the total payments across all options: buy cash, finance, or lease and buy out. If you want, calculate in today’s dollars to find the cheapest option, then layer in what fits your lifestyle and risk level.
For me, the lease plus buyout option worked out much cheaper.
Scout said:
For me, the lease plus buyout option worked out much cheaper.
Did you buy it in Texas?
I’ve been looking into this too. Another option is to find a used 2024 with low miles (like 5K–10K) and see if that gives you a better deal.
Since it’s American-made, it qualifies for the $7,500 tax credit if purchased. Why complicate it with a lease? If you’re not a low-mileage driver, plan to keep it longer than 3 years, or want to avoid low trade-in values, just buy it.
@Hal
Cash purchase or finance doesn’t qualify for the $7,500 rebate on EVs.
Oakes said:
@Hal
Cash purchase or finance doesn’t qualify for the $7,500 rebate on EVs.
Ah, got it—battery made in China. In that case, maybe look into the 2025 Kia EV6 when it’s available.
I always think I’ll keep a car for more than 3 years, but it never happens. In 3 years, EVs will have improved a lot, and being able to just walk away without any obligation is pretty appealing. Especially if you’re getting that $7,500 rebate. Just something to think about.