Leasing a new Tacoma

When leasing, there's no "negotiating" the mileage. The leasing company already has its rates in place depending on length of term and mileage. If you choose 10k miles/year there's a set rate of depreciation. Go w/ 12k or 15k and those get a new depreciation calculation. The ONLY thing you need to "negotiate" is the selling price of the vehicle. The leasing company already has the leasing calculations in place. You CAN find more than one leasing company. Usually the dealer will set you up with the manufacture's leasing side for the lease. Sometimes the dealer itself will be the lessor. If this is the case, 1. run away or 2. REALLY go over the lease terms/contract. There are many, many third party leasing companies willing to lease you a vehicle you purchase from the dealer. You'll have to do your research for a third party lessor if that's the route you want to take. I'd be very cautious leasing from anyone but the manufactures financial institution. Not that they are bad, just unknown. The manufacturer is only interested in moving inventory for their dealers, not focking you over on your lease for a few extra bucks.

Also, many leasing companies include GAP insurance in their lease programs. Lexus is one. If they don't, you should consider GAP. The dealer will offer it and I bet your own insurance company offers it. Do your research before you buy it. It's usually very cheap.

 

There is a set rate of depreciation but doesn't it defer if say your lease says 10k miles per year but you do 15k they will charge you a different amount per mileage than if you agreed to 15k lease per year? That is a lot more than what would be added to the monthly payment?

 

Lease = Near Zero Liquidity. For that reason alone I will never lease.

Leasing works for large companies to manage there tax situation. It also works for luxury vehicles that are expensive once off warranty but relatively cheap to run the first few years.

Yes, leasing is paying for the depreciation on a vehicle. If you are a business of any sort you should closely examine leasing any piece of equipment. If you are well off and want a new BMW every three years leasing is also the way to go. However for the average person there are far to many things that can go wrong during a lease that will leave you locked into a deal you can't get out of without paying far more than the purchasing price in the first place.

 

In the lease agreement there's a set fee for any mileage over the agreed amount. I have never had to pay this. Usually a dealer will use this "fee" as an incentive to get you to trade in your lease with them so that you'll buy a new car with them. They'll offer to "pay" the over mileage for you. In reality no one pays for the over mileage because no one ever turned the lease in. It was bought from the leasing company before it's turned in and the leasing company doesn't give a rat's ass how many miles are on it.

 

I leased an 07 Sport thinking I would buy it and the end of the lease so I never gave much thought to the miles or what I did to the vehicle mod wise. However, life happened and having an access cab didn't suit my needs and I took a royal screwing when I went to trade. I will never lease again and I wouldn't recommend it to anyone. But, at the end of the day it's your money, your truck and your decision. Good luck either way!

 

When I leased my 06 tundra XSP I signed for 15k miles/yr and gap ins. My payment was like $360+/month. When I turned it in I can't remember my payoff but it was worth it to me.

 

What liquidity do you have when you buy? Unless you put a large down payment there's likely to be no liquidity until several years into the loan. In a lease, there's no need to worry about liquidity as you have no liquid assets in your lease. IF you followed my advice and didn't put any money down on your lease. So the opposite is actually true. And one of the reasons a company leases rather than buys. They can use their liquid assets for growth not debt.

Like what?

 

Ah that makes sense. If your turning in your lease your most likely leasing/buying a new vehicle or buying the vehicle your turning in, unless you go to the private party.

 

You can sell a lease to a private party. It can be a PIA and you have to find a buyer willing to work with you. I leased an 05' Dodge 2500 diesel. My lease was nearing its end and I decided to put it on CL just to see what i could get for it and if there were any buyers. The first response I got, bought it. I explained what the situation was and he was willing to work with it. I ended up getting back about $2,000 after buying the lease out and reselling it to the new buyer. The PIA was worth the $2,000 to me. You may feel different. It wasn't that much of a PIA.

 

Liquidity:

"The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets."

Vehicles that are bought outright can be sold outright. If you want to upgrade or downgrade your vehicle to match your situation it can be done with ease for basically the lowest cost possible. With a lease you will pay more to buy out the lease and then trade the vehicle, which adds up to lower liquidity.

Show me a single time when someone got out of a lease because of a bad accident, lifestyle change, or family change for less than if they were in the same situation with financing/buying please. You can't. Therefore leasing has lower liquidity.

I work for a large company. We use lease trucks to manage our tax situation. Read up on depreciable asset and how they can effect your tax situation, as well as the cost of maintaining a staff to manage that depreciation, and it becomes clear very quickly why companies lease over buy. Basically with a bought vehicle you are very limited in what you can claim in expenses for depreication and that depreciation is complicated by things like personal use. With a leased vehicle you can apply the full cost of the lease as an expense, which helps reduce a companies tax exposure and simplifies your tax position.

If we want to talk about the money invested in vehicles most companies, long term, invest very little in vehicles period compared to the money the sales/delivery/etc fleet drums up using them and the amount spent, not taking tax into account, is almost the same whether you buy or lease. Actually, most companies have pre-setup buyouts on each vehicle that they will often use when the vehicle has an accident or they need to get rid of it because it's a POS they buy out and turn it over to auction. It's not about spending the least amount of money on the vehicle for companies, it's about using the vehicles to lower your tax exposure which allows you to make the most money for the company, and not the government, at the end of the day.

 

You CAN'T just go in thinking "I'm just gonna lease this 'cause its cheaper and easier.". You HAVE to do your research, just like buying. You need to know the money factor/lease terms and compare that to buying. You NEED to negotiate the purchase price with the selling dealer. A lease is NOT just a set price you see in an ad. That's just to get you in the door just like any other dealer ad. Leases are very easy to pull one over on a customer because leasing is not as straight forward as buying and the terms/verbiage can be confusing as most people are not familiar with things like MF(money factor) and residual value.

Leasing is NOT for the lazy or dumb.*

* NOT saying you are either of those. Just a statement.

Leasing is as much if not more work than buying as you're adding an extra step to the process.

 

The simplest way to decide to lease or not is to ask yourself are you comfortable with that financial obligation over that time period with that vehicle no matter what happens or changes? If not, don't even look into leasing.

If you are comfortable with the commitment, do some googling and calculate out your true cost of ownership. Also review the terms completely as has been stated a few times. If, after those steps, leasing is still the least expensive and most desirable option you should sign the lease.

 

A lease can be bought or sold just as with a purchase. There's no penalty or fee for buying out a lease before lease end. You just have to honor the lease terms agreed to. In fact, a lease would usually cost less to "walk away" from when talking apple to apples. The same car/truck leased would have less liability than a car/truck purchased with a loan for the same reason it costs less, monthly, to lease. You're on the hook for the remaining lease or loan. Since the lease is for less money, less loss.

Why can't someone get out of a lease after a bad accident, lifestyle change, or family change that they could get out of in a loan?

We are talking individuals, not large companies here. We are also discussing leasing vs. a loan. If it's a cash purchase then it's a whole new ball of wax.

 

I allowed myself to get sucked in. And for the reasons stated in the quoted thread, I'm out. Good luck w/ our purchase or lease. Just remember, DO YOUR RESEARCH. DON'T depend on what I or anybody else for that matter writes in this or any other thread. At the end of the day, it's your money and your responsibility.

 

A lease can be bought or sold but every time I have dealt with a lease, even on a shit box car, the cost to get out of it was higher than the money lost on a trade if you are trying to do so before term. IF we are talking about a full term lease then, yes, leasing is cheaper. The problem is that a ton of low cost leases are done over 3-4 years and the odds of someone changing vehicles, and therefore getting hit with higher costs than buying, is high. This article explains it best:

http://www.leaseguide.com/articles/lease-buyout/

If you've managed to figure out a magical way around that by negotiation then good for you. That has not been my, or anyone else I know, experience with leases.

You were the one that mentioned large companies as supporting leasing so I clarified why they lease vehicles.

 

Thanks for all the info guys. Definitely got some things I need to think about and figure out what I want to do.

 

I joined just to say that maybe leases aren't that bad if you "properly maintain collision insurance....."

 

Leases have their purpose. It works best on a vehicle with a huge depreciation. The price of the vehicle at time of the lease is very important. Remember a lease company buys the car and leases it to you. The agreed upon value at the end of the lease is another very important number. It might work on a Taco. I see my 2015 still selling for high $20's. If it's a money out of pocket now then that is another factor. Remember one thing... A vehicle is the worst investment we make in life. Nothing costs more and returns less.

 

Oh man I found this thread too late. @Jefes Taco gets it. I'm pretty sure most people don't understand leasing as a strategy. Nearly everybody I talk to about leasing vehicles seems to be hung up on some misunderstanding yet they use their limited knowledge in conversation like they know what's up. It's comical. Listening to somebody try to tell me how a lease is a bad idea makes me smile in the inside. Most glaze over when I've tried to explain how it can be a useful strategy. Im sure Jefe knows what I'm talking about.

 

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