Buy or Lease 2021 RAV4 Hybrid Limited? Or 2021 RAV4 XLE AWD? (Supernoob)

mrnobody

Hi There,

I'm having a hard time deciding what is the best move here:

Buy or Lease (with the intention of buyout then -> sell):
2021 RAV4 Hybrid Limited
Or
2021 RAV4 XLE AWD

I plan to sell the car in 3 years, right before 2025. I am in Northern California. A friend of mine suggested that I go after leasing the car (0 down, make payments, then buyout the car at the end and turn around and sell it) versus buying the car now and having to takeout a new car loan and pay for the car upfront to save $). I can probably put $15-20k down now to finance the car if I go with that option.

I understand that the chip shortage has made the market insane, cars are appreciating in value, dealers in my area are all over the place- multiple dealerships quoted $5k - $6995 markup over msrp. nonnegotiable over amount in hundreds.

I should note:

I am at ends between models because knowing that I intend to sell the car in 3 years hoping to get the most amount of $ back for it that i can, that perhaps the model will make a difference on how much I spend and try to recoup.

and

I have a refundable deposit on a 2021 RAV4 Hybrid Limited at the moment. It has been built and will be here in October.

Market Value Selling Price 42,363.00
OTD 46,721.89 (doc fee, tax, non tax fee)

I plan to put roughly, at a maximum, 7000 miles on the car every year, (3 years total expected mileage to be 15,000-20,000). it will not be a daily driver, I have the ability to maintain the car to the highest degree. Minimal wear/tear/mileage.

From my very very basic and limited knowledge/assumptions, my expectations are roughly something like:

Hybrid Limited:
Best Scenario: Buy for $46k and sell in 3 years for $35k+ (loosing less than $10k)
Worst Scenario: Buy for $46k and sell in 3 years for $30k (hopefully lowest sell price) - (loosing $16k)

or

XLE
Best Scenario: Buy for $36k and sell in 3 years for $30k+ (loosing hopefully less than $6k)
Worst Scenario: Buy for $36k and sell in 3 years for $20k (hopefully lowest sell price) - (loosing $16k)
Are these completely irrelevant estimations?

What is the best move here? The way I am looking at it is to try and make the best decision against knowing I will be selling the car at the end of 3 years, and which option will most likely set me up to loose the least money on the vehicle when it is time to sell it. I am also concerned about the residual price of the vehicle as I have no experience with this and have not entered into discussions about that price with the dealership yet and not entirely sure how that factors into the least>buyout>sell option. Currently waiting on MF, RV info from edmunds to help further calculate.

Sorry in advance if i am missing important information or lack of experience/knowledge in discussing this. Learning as much as I can and reading threads across Edmunds, Reddit, Leasehacker to try and absorb as much as possible.

to sum it up.

1. Which RAV4 should I choose? that will be the best chance for me to sell in 3 years when I no longer need it, that will recoup the most $ against the price I bought it for?

* i understand that theres a lot of variables here. market will wildly fluctuate given the current shortage, perhaps catching up in 3 years when i plan to sell, mileage/condition of the vehicle, etc.

2. Should I buy or lease the RAV4? to accomplish my above goals

3. Am I correct to evaluate that the price i was quoted for the 2021 RAV4 Hybrid Limited average/decent given the circumstances/market right now for a car, a hybrid car, and a rav4. I read somewhere that getting anything better is impossible and that if you find msrp you should take it.

hopefully all this makes sense. thank you very much to everyone that took the time to read. i have much to learn

kyfdx

mrnobody said:

Hi There,

I'm having a hard time deciding what is the best move here:

Buy or Lease (with the intention of buyout then -> sell):
2021 RAV4 Hybrid Limited
Or
2021 RAV4 XLE AWD

I plan to sell the car in 3 years, right before 2025. I am in Northern California. A friend of mine suggested that I go after leasing the car (0 down, make payments, then buyout the car at the end and turn around and sell it) versus buying the car now and having to takeout a new car loan and pay for the car upfront to save $). I can probably put $15-20k down now to finance the car if I go with that option.

I understand that the chip shortage has made the market insane, cars are appreciating in value, dealers in my area are all over the place- multiple dealerships quoted $5k - $6995 markup over msrp. nonnegotiable over amount in hundreds.

I should note:

I am at ends between models because knowing that I intend to sell the car in 3 years hoping to get the most amount of $ back for it that i can, that perhaps the model will make a difference on how much I spend and try to recoup.

and

I have a refundable deposit on a 2021 RAV4 Hybrid Limited at the moment. It has been built and will be here in October.

Market Value Selling Price 42,363.00
OTD 46,721.89 (doc fee, tax, non tax fee)

I plan to put roughly, at a maximum, 7000 miles on the car every year, (3 years total expected mileage to be 15,000-20,000). it will not be a daily driver, I have the ability to maintain the car to the highest degree. Minimal wear/tear/mileage.

From my very very basic and limited knowledge/assumptions, my expectations are roughly something like:

Hybrid Limited:
Best Scenario: Buy for $46k and sell in 3 years for $35k+ (loosing less than $10k)
Worst Scenario: Buy for $46k and sell in 3 years for $30k (hopefully lowest sell price) - (loosing $16k)

or

XLE
Best Scenario: Buy for $36k and sell in 3 years for $30k+ (loosing hopefully less than $6k)
Worst Scenario: Buy for $36k and sell in 3 years for $20k (hopefully lowest sell price) - (loosing $16k)
Are these completely irrelevant estimations?

What is the best move here? The way I am looking at it is to try and make the best decision against knowing I will be selling the car at the end of 3 years, and which option will most likely set me up to loose the least money on the vehicle when it is time to sell it. I am also concerned about the residual price of the vehicle as I have no experience with this and have not entered into discussions about that price with the dealership yet and not entirely sure how that factors into the least>buyout>sell option. Currently waiting on MF, RV info from edmunds to help further calculate.

Sorry in advance if i am missing important information or lack of experience/knowledge in discussing this. Learning as much as I can and reading threads across Edmunds, Reddit, Leasehacker to try and absorb as much as possible.

to sum it up.

1. Which RAV4 should I choose? that will be the best chance for me to sell in 3 years when I no longer need it, that will recoup the most $ against the price I bought it for?

* i understand that theres a lot of variables here. market will wildly fluctuate given the current shortage, perhaps catching up in 3 years when i plan to sell, mileage/condition of the vehicle, etc.

2. Should I buy or lease the RAV4? to accomplish my above goals

3. Am I correct to evaluate that the price i was quoted for the 2021 RAV4 Hybrid Limited average/decent given the circumstances/market right now for a car, a hybrid car, and a rav4. I read somewhere that getting anything better is impossible and that if you find msrp you should take it.

hopefully all this makes sense. thank you very much to everyone that took the time to read. i have much to learn

If you know you have to sell it in three years, then lease the car.

mrnobody

kyfdx said:

If you know you have to sell it in three years, then lease the car.

Yeah thats the other part of this whole calculation i was trying to figure out. if i just lease and return, if that total comes out to $10-15k anyways, thats around what the wash will be if i buy/sell or lease/buyout/sell given the crazy markups right now and market price in the future. if thats the case then why bother w/ buying/selling either way at all- just lease and return huh

kyfdx

mrnobody said:

kyfdx said:

If you know you have to sell it in three years, then lease the car.

Yeah thats the other part of this whole calculation i was trying to figure out. if i just lease and return, if that total comes out to $10-15k anyways, thats around what the wash will be if i buy/sell or lease/buyout/sell given the crazy markups right now and market price in the future. if thats the case then why bother w/ buying/selling either way at all- just lease and return huh

Yes.. trying to make money on your personal transportation is a lot of work for a dubious payoff.