'16 Lease Residuals (not for everyone, I know)

That sounds like a decent deal. what are these MSD's? security deposit? is this instead of a down payment? and refundable at the end of lease...how much does one MSD lower the money factor?

On another note, is the residual based on the % from MSRP? my dealer said it was from invoice, so its obviously lower than i thought it would be, trying to see where the negotioating room is....or just to compare numbers with other dealers

 

Each MSD lowers the money factor by 0.00008, and you can do up to nine (buying down the APR by 1.72% pts). One MSD=the monthly lease cost rounded up to the nearest $50. You get them back at lease end (whether you return the car, total it, or buy it).

There is no reason to ever do money down (cap cost reduction) on a lease from a finance company that allows MSDs.

 

Thanks, i just read the other posts and found that too....I'm guessing the dealers dont disclose this because its not in their favor
So instead of 1000 down, i could buy 2 msd's and go from .00190 to .00174 saves $360 over 3 years, and then i get my $1000 back

 

YAHTZEE!!

 

MSDs are offered by Toyota Financial Services, and they advertise it:
https://www.toyotafinancial.com/pub...tions/lease/multiple_security_deposit_program

It doesn't really affect dealers (the finance person just has to do slightly more paperwork if you do MSDs). If it somehow made the dealers money, they'd advertise it. But it doesn't, so they don't.

 

I didn't do any MSD I just paid the lease in full upfront. Its called a one time pay lease.

 

They could make money off it, 99% of people coming in don't know what the MF is supposed to be and the dealer is allowed to mark it up a certain amount as reserve profit. However I've never seen a dealership that does this well. Most of them don't even know what an MSD is. When I leased my Avalon, did my own paperwork, the office threw a fit because they didn't know how to handle it!

My truck is on order and I am still deciding buy/lease. I am quite certain I can resell the vehicle for more than the residual at the end of the lease, I just don't know if I can stomach paying an MF over .00100 after MSDs.

 

I know, in texas we pay tax on full cap cost, plus MF x $60000+ is almost as much as the depriciation, hard to stomach

 

Does the money factor vary at all by region? I thought the MF for the 2016 Tacoma was a set .00190, but I had a dealer in the NorthEast region tell me it was .00300. This makes a considerable difference, and I'm wondering if it's a shady way of building profit into the lease.

 

Dealers can and do mark up the MF. I just tell them I will only pay the base MF set by TFS, or I'll lease elsewhere.

 

Thanks...I confirmed that myself today when I picked up my new Tacoma, from a dealer who used the base money factor of .00190. Heads up to others, since often the lease is just presented as a monthly payment...even if the dealer offers a fair amount for trade and discount off MSRP, that surface "good deal" can be negated by jacking with the money factor...ask to see the numbers they're using. I leased a more expensive truck (+$2K MSRP) with a higher mileage allowance (15k vs. 12k) for $10 more per month than I was quoted by the dealer insisting the MF was .00300.

 

How does the MF compute into monthly payments? Sorry, I haven't leased since I had a '95 4Runner, so I'm not sure how they compute everything.

 

MF can be calculated to APR terms by muliplying by 2400
example .0019x 2400=4.56% APR
.0030x2400= 7.2% which I think is crazy high
Heads up, if you've previously finance through TFS MF will be .0018

 

That apr's high when presented using that formula.

 

This thread did help me. I was never aware of multiple security deposits to lower money factor.

 

Anyone have any dealer recommendation in so cal? Los Angeles area

 

Where can I verify that the standard money factor is .00190? I'm waiting for my DCSB sport to arrive and don't want them playing money factor games with me?

 

Most dealer will disclose money factor up front.
Sales person I spoke with had a binder with all that info.

 

I work for a dealership. We used an outside credit union for my 16 Tacoma Lease... Residual was 79% for 3 years 12k miles... $39,600 MSRP paying $285 month with $2,500 down

 

It Could vary by region, but yes dealers can mark up the rate to make some money back if they are giving you a good deal off of the MSRP.