I just leased my first 2019 Tacoma sport $258/mo!!! Philly area

So I put zero down and have a monthly payment on a lease, how exactly do they “already have my money”.

 

The interest/money factor/rent charge is calculated up front and added to your total, this money is collected up front. This is different from a finance contract where the interest is calculated as a per diem. Call Toyota Motor Credit and ask them for a per diem on your lease... Your payoff on a lease is calculated by adding your remaining payments to your residual, there are no discounts for early payoff of your lease and miles are not counted for you, only against you.

 

Who cares?, let it rest.

 

So now I am confused with this interest thing. So here is a scenario, I leased my truck, paid 40k for the truck, I was given 13k for my trade-in which covered the 36 month lease plus a little more. The residual is like 27k. Where is the interest tacked on then? These numbers aren't exactly mine, but I think they are close approximates. I know at the end of the lease I will pay sales tax on the residual too.

 

Your 13k trade in wasnt free. It was a 13k payment from you to Toyota. That covers your interest and depreciation. Or whatever the equivalent lease terminology is.

 

The way a lease works is by subtracting the residual from the sales price and dividing by your loan term. So let’s say 35000 sale price - 27000 residual = 36 month would be 222 a month before tax, interest and fees. And residual is figured off of MSRP which is why the Tacoma can lease well with a ~72% residual.

 

Alright, I’ll admit that it’s magic! No really, go read your lease contract, I believe Toyota uses the term rent charge. What I don’t understand is why the dealership did a 1 pay lease, most desking tools go apeshit when you tell it to calculate a money factor on the 36 mo term and put it all into 1 payment. The finance manager now has almost zero chance in hell of selling you anything and begins blaming the sales manager of the latest outbreak of Polio for bringing him such garbage

 

So again how do they have my money up front if the interest is calculated and applied to each payment throughout the lease?

 

It’s calculated on the term, then tacked on up front and divided by the term. If you want out of the lease early you add up all of the remaining payments and add them to the residual. If you have decided to purchase it yourself you will then be charged tax on the total, if you were trading it in the dealership as buying wholesale and there are no taxes.

 

I see a lot of Toyota commercials in AZ to lease a taco for $259/month.

 

I see what your saying and there are ways out early without paying all the interest and tax. The part I can’t agree with is that they have all your money up front, unless you do a one pay, they do not. I transfer a lease early and I’ve only paid the tax and rent charge for the months I used.

 

Its a good idea when done right which is sounds like you have (one pay lease with a low money factor)

No matter how many times I explain it to people on this forum they just "derp derp leasing bad derp derp", can't reason someone out of a position they didn't reason themselves into

 

This is wrong, its true thats how the payment is calculated but thats not how your rolling payoff is calculated.

If I total my leased truck the day after leasing it with $0 down my payoff is simply the cap cost + acq + DMV fees. Interest is not "rolled" on top.

This is another advantage of leasing if your vehicle is totaled or stolen you've kept your payoff as low as possible by avoiding rolling the full taxes into the loan (in most states).

Thats why (in most states) my leased vehicle will have a payoff thousands $ less than a financed loan and why you're more likely to have equity, same if you sell it you've avoided taxes on the residual/remaining payoff.

 

He's basically looking at how a desking tool calculates lease payments and assuming its how payoff is calculated which is different.

He's partially correct in that money factor is based on the total cap cost and not just the difference between residual... but you're correct in that ultimately you pay interest PER PAYMENT as "rent charge" not all up front, just like taxes.

 

For some people lease is a good option for others no. Simply like that.
I leased before and I think I did it good, actually if you lease a car/truck that holds value, you can build equity if you don't go over the miles, that usually means a credit back to your pockets.
I think both have their pros and cons.

 

Essentially yes. Last Tundra lease I "sold" netted me $7,400 back, just because market value on those trucks is huge in Canada compared to residual. It has a lot to do with the fact our $ is low and lots of trucks get shipped to USA. If I manage to keep my Tacoma to lease end I'm estimating at least $5,000 in equity easily.

 

I’m fairly new to long travel suspensions and hard core off roading so I joined this group to learn. On the other hand I have over 15 years experience selling and leasing cars, I’m Toyota certified and have attended more than a dozen classes taught by reps from Toyota Financial on leasing. The rent charge on a Toyota lease is charged up front.

Edit: if you’re in Canada or another country it may be different

Edit #2: One minor correction, most people are not aware but there are three different companies that sell Toyota is in America, South West, Gulf States and TMNA. South West uses Omni, not sure of Gulf States and TMNA uses Toyota Financial.

 

Don't want to get into the lease vs buy argument here...I've bought 95% of my cars but have leased a few. There are definite pluses to leasing.

I've not seen lease specials around here in the ballpark of the OP especially for a Sport. Would love to lease a nice Cav Blue Sport on the lot I tested for that price!

I think I've seen SR5's below $300.

Anyway, does anyone have a real-world reference for a low lease on the Tacomas especially Sport or OR?

 

15 years and you never made it to management?? lol

I'll give you one more chance and illustrate how ridiculous your understanding is.... you're claiming that rent charges are added to gross capitalized cost?? Do you even realize thats what would have to happen if rent charges were paid up front?

I leased a bunch of Tacomas back in the day to a tree company it would be hilarious to calculate based on your flawed understanding lets give it a shot:

$30k cap cost on a 60 month lease with an $18k residual and a .0024MF.... you're claiming my payoff will jump to $37k the day I sign my lease?!? And furthermore if I total my toyota lease the day after I get it my GAP insurance will pay Toyota $7k worth of interest alone? LOL, come on just THINK about it no way you spent 15 years in the business and can't figure this one out....

If rent charges were added to cap costs Auto Alert would be bankrupt (early lease buyouts is the majority of their business model) and no one would EVER be able to get out of a lease early. But if you were really in the business for 15 years as you claim you would know Auto Alert is of course extremely popular precisely because people get out of leases early everyday (especially toyota leases).

 

I miss Auto Alert...