Jeeps – they look great on the ‘gram, but can you really afford it?
Cars are symbol of status, we get it. Upload a photo of you posing effortlessly next to a brand new Jeep and within minutes your notifications are flooded with likes and gratification from (mostly) strangers.
You’ve chosen your model, picked the colour that looks best with the Clarendon filter and narrowed down your names to either “The Beast” or “Karen”. Now all you need to do is to sort out your down payment and agree to the payment terms of $495/mo and you’re on your way to achieving a bona fide social status.
Jeep Leasing: The number breakdown
Wait. What? $495 a month? You realize that’s $5,940 a year, right? For a car you don’t even own?
Let me repeat that for you – almost $6K a year of your hard earned money on a car you don’t even own.
If you opted for the traditional 36 month lease (3 years), that’s an eye watering $18K across that period, for a car you have ZERO equity in.
Unless you have an annual income of $250K, why in the world would you spend $18K over 3 years just to rent something?
Now let’s say you’ve become completely attached the idea of driving a Jeep that you decided to continue to lease a new one every 3 years at a similar rate of $495.
(Realistically though, that payment will go up with a standard 2% inflation, but for the sake of this post, I’ll keep it as a steady $495 to remove one less variable).
After 9 years, you will have spent $53,460 on leasing multiple vehicles and still owning absolutely nothing by the end of it.
The idea of driving down a beach with your dog’s head out the window sounds wonderful. Equally I’m sure it must be nice to know everyone around you has serious car envy, but in reality the $54K of spend to achieve such car goals isn’t so much.
So, no Jeep lease; what’s the alternative?
Say for example you now lease a Honda Accord for $295/mo with $0 down.
(Not as cool as a Jeep but far more economical).
You then take the extra $200/mo you’re saving by not taking the $495 on the higher-end vehicle and re-invest the remaining savings. That would be $200/mo. or $2,400/year. Across 9 years you would end up with savings of $7,200.
Here’s where the fun starts: If you took that $2,400/year and put that money to work for you in the stock market or a savings account, with a pretty conservative annual return of 5%, after 9 years you monthly saving of $200 would now be an incredible $27,786.94.
This isn’t a drill, you could actually earn almost $28K just by making a smarter life choice when it comes to choosing your next car; a new jeep every three years or £28K in your bank?
FYI, you can actually buy a used Maserati in cash for that much. The 2014 Maserati Ghibli Base RWD 4-Dr Sedan V6 used goes for around $29K.
Jeep Leasing Conclusion
Patience is a virtue. Put aside your ego, avoid getting sucked into the Instagram rat race and let us help you negotiate a reasonable monthly payment on your next vehicle!