There shouldn’t be significant differences in most states’ fees, taxation, etc. between leasing and financing (in the sense that any complexity in financing difference is likely no worse than leasing differences, for a company with Scout’s resources).
If I were a new EV company, I would be worried about initial depreciation (which, if I set high residuals means I would likely eat the losses, and setting low residuals might not generate enough leases or lease revenue to matter).
More importantly…leasing is a demand lever. Unless you’re setting lower residuals to ensure the ability to resell at a profit (or not-a-loss), it makes sense to do what Rivian did and wait until the early adopter rush dies down a bit. And a lower residual reduces or eliminates the value prop of a lease for the consumer.
As long as folks are paying cash or traditionally financing, I don’t have to:
a) worry about eating depreciation losses
b) stand up leasing infrastructure, including the entire end of lease process (vehicle turn in, inspection, and either used sales or auction- noting that used sales are a whole can of worms that most manufacturers don’t want to deal with)
c) worry in the slightest about reconditioning or rehabbing an off lease vehicle
When demand starts to wane a bit, and there are indicators of consumers wanting lower payments, I can start activating a lease program to capture them.
This also means I have time to assess depreciation on my brand-new-to-the-market vehicles and make informed lease terms.
It also means I have time to start standing up lease turn in and disposition infrastructure, which isn’t all that trivial.
Of these, the demand lever/depreciation assessment are probably the biggest factors.
All that said, I’d like to see a lease option at launch2
Edit to add: has anybody been t
Edit to add: has anybody been tracking Rivian 2-3 year depreciation? I feel like it was worse the first few years and has stabilized nicely
Here's what Car and Driver posted about depreciation after driving a 2022 Rivian R1T Adventure for 40,000 miles.
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By the time I get my Scout I will have had my Wrangler for 15 years. I’m planning on the same for my Scout. I’m not even thinking about depreciation. I do see how people who get cars more frequently would take that into account, but that’s not me.
Im with you. Definitely keeping it long term. The only thing I would consider trading it in for would be Travelall. Otherwise it will stay in the family fleet.
Not letting me reply to @Chuckles :
Exactly!
Will Scouts depreciate similarly? Will harvester models have better or worse resale? (I suspect they’ll hold better value than the BEV models initially).
Good residuals for “good” lease deals are in the 60% ish range (I am open to being corrected here). This implies a 40% true residual (not sure what model Rivian this is for).
So, if you as the manufacturer need to pump sales numbers up, offer a lease residual higher than the actual market value at turn in. Offering special finance incentives or cash incentives is usually simpler and safer than lease incentives, but leasing is (theoretically) a recurring revenue stream and attracts a different type of customer.
Exactly!
Will Scouts depreciate similarly? Will harvester models have better or worse resale? (I suspect they’ll hold better value than the BEV models initially).
Good residuals for “good” lease deals are in the 60% ish range (I am open to being corrected here). This implies a 40% true residual (not sure what model Rivian this is for).
So, if you as the manufacturer need to pump sales numbers up, offer a lease residual higher than the actual market value at turn in. Offering special finance incentives or cash incentives is usually simpler and safer than lease incentives, but leasing is (theoretically) a recurring revenue stream and attracts a different type of customer.
since it is a new product and the way tech changes so fast, leasing is the best option for me. Once I know this thing is built like a tank and is durable and reliable then I would for sure own 2.
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