With great anguish, I have to ask a serious question...

Since op's question has been answered, I'll ask lease related question since Sub_Par is dropping knowledge.

I leased my OR and the residual IIRC is 29 something, $377/month, $1K down (to cover fees, etc)

I want to buy it at lease end (1 year). Do i have any negotiating power in reducing the price?
The truck was rear ended 6 months ago and I got a new frame so I'm hoping i can use that as leverage if that's even possible.

 

Who did you lease through? Depends on the bank, some will negotiate if the truck is actually worth less than the residual, but they don’t have to. Most banks don’t want to take the vehicles back, they’d rather you buy it or trade it in at a dealer. With how Toyota’s hold their value I wouldn’t expect them to negotiate, but I would still try (I intend to as well).

 

I should add that if you lease you must negotiate a good lease. This is a bit of an art. I have only leased two times. One was a Toyota Sienna minivan and then that was traded in for a Honda minivan. The minivans are for my wife. I did not turn in my leased Toyota Sienna. The various Toyota dealerships wanted to royally fuck me when I was trying to turn in the Sienna for a new one. I was able to trade it in about two months early with equity when I leased the Honda minvan. Hopefully I can pull the same stunt again with the Honda. My plan is to go back and forth between leased Honda and Toyota minvans for my wife. I figure I will play the two different brands and dealers off each other. Usually there are conquest lease deals between Honda and Toyota. Also Honda and Toyota minivans are high residual. I have five kids so yeah...minivans.

 

Sub Par knows what he is talking about. There is no way that 36k is the residual. Makes 0 sense. That is the current buyout, unless truck was highly modded at the dealer and was sold for way above msrp.

Leases are tricky and most people dont have a good handle on how they work. If you know what you are doing and have a good credit rating, leasing a high residual truck like a Tacoma makes a lot of sense for a lot of people. Put no money down, get the Gap insurance and you are on your way. At lease end you have a few options and likely some equity you can get back into your pocket.

 

TFS (Toyota)

 

I'll just place this here

 

Because it was in response to the person that was happy it wasnt just another oil thread. Hey dont get me wrong I absolutely love my 3rd gen . Believe it or not more than my last tacoma which was a second gen . The 3rd gen sub forum is so mundane. Countless oil threads or rim /post em ups. It's like a insurance seminar in here . I found myself cruising a first gen thread yesterday just to follow a 4x2 to4x4 conversion . Sorry I wasnt trying to be rude or disrespectful OP just agreeing on a side note with the guy who said "at least it's not another oil thread".
Happy new years btw.

 

Rich,

It is incredibly unfortunate to have to get rid of a car for financial reasons. I don't think anyone should have to go through that.

As others have said, get someone else to assume the lease for you. Depending on your lease contract you may not be out anything but your down payment if you are able to get someone to assume your lease in full.

If you can't find someone to do this then you'll have to purchase yourself out of the lease and you will be bound by the lease contract wording. So pull out your paperwork and take a look at what the terms are if you end the lease. It should spell out how much you'll be required to pay and if you have any negotiating room.

Get yourself out from under the lease as best as you can and purchase a car you can pay cash for. No payments, no chance of losing the car to financial inability to pay a monthly debt payment.

 

I have leased 2 Tacoma's through Toyota. I'm reading a lot of interesting info I'm not sure is accurate. Mind you I'm in Canada so it could differ in the USA..

The residual value AFAIK is established by the leasing company, in my case Toyota Canada. In all the dealership I have visited and in viewing the numbers online, ALL had the exact same residual value, regardless of the purchase price or payment negotiated. It was only the term and milage selected that changed the residual, established by Toyota.

My purchase price was the amount less the residual.

one of the reasons I like leasing Tacoma's is they have the highest resale of all vehicles, but low residual amount and I typically put less miles than the available amount.

I was also offered a sizable cash incentive at lease end to buy a new Toyota, because I was considering buying it out, which I ended up doing.

You can buy the lease out now, which is the amount of payments left plus the residual value. But not likely worth it unless you put down a bunch of cash.

I've also taken over leases and transferred 1. New lessee is vetted by the lessor and assumes all responsibility for the vehicle and payments, which is 1 reason for the transfer fee.

 

I agree with almost everything you said except that Tacoma’s have very high residual value not low, that’s what makes up for the higher money factor and still makes them attractive leases.

 

Fair enough, although I find the resale or trade in value to still be much higher than the residual at least end. A lot will depend on the condition of the vehicle of course.

 

Yes I will agree with that, usually with a Tacoma you will have equity at the end. And since the residual is based off MSRP, even if you have a shit lease deal your residual will still give you some equity.

 

I hope you were able to get you diminished value compensation from your insurance co. But no matter, a major repair such as a frame replacement does in fact reduce the value of the vehicle and you should be able to bargain with that.

 

I've resisted chiming in, and apologies to those who say I shouldn't, but many people don't understand leasing at all, and there's been misleading info posted here. Sub_Par has it right. YOU need to work a deal you can live with, both monthly payment wise and residual. There's no one answer for everyone's truck needs, and leasing is no different than buying in that regard. Just like some people get great buying deals and some others pay a lot more, leasing prices are not set in stone. I sold Toyotas about 12 years ago, and back then, lease deals sucked, but the field has changed and since a LOT more people are leasing their vehicles nowadays as compared to back then, it's easier to find good lease deals. Just like when buying, don't walk into a dealership and say "I want a payment of $400/month. That's akin to facing the sales manager, opening your wallet and saying: "Here, I want a truck, take what you need to."

Work out a payment that's right for you, and screw what the residual is. You don't know right now what you want to do 36 months down the road. You may love the truck, you may hate it, Who cares if the residual is $50,000? You don't have to buy it. Most who lease don't buy it at the end anyway and either just lease the latest, newest version, or their life changes and they need a different vehicle.

 

That is correct. When you lease, the leasing company owns the car. They set whatever residual they want. When you purchase, you own the car and if you financed the purchase, the finance company will naturally have a security interest (but not an ownership interest) in the vehicle.

If you are planning on doing an end of lease purchase, leasing usually will cost you more overall than if you simply purchased outright at delivery. There are exceptions of course, but for Joe Lunchbox leasing is typically a more expensive way to own a vehicle.

 

Total cost to own on a purchase vs lease to buy will almost always be more expensive to lease first. Sometimes though it’s nice to have an extended time to decide whether you really want to keep a vehicle. Tacoma’s are odd leases though since they hold value so well. My brother is leasing a Durango RT and that thing has a residual at around 55% after 3yr 36k miles, where as my Tacoma had a residual of 72% for the same term. He’s happy to lease it because the value will probably tank on that thing and he can just turn it back in or negotiate a lower sales price. This will probably never happen with a tacoma.

 

Because it's a lease, I don't get diminished value because I have the ability to return the truck - what my lawyer told me, except in fancier words.. if I had financed it, then yes. I also argued, what if I had decided to keep it, but that argument doesn't hold in court apparently.

 

True and that is a good point.

The Tacoma is a bit of an odd duck in the lease/purchase debate due to the crazy high resale. You can purchase a 2019 Tacoma for $480 mo w/$0 down and after three years of payments your balance would only be about $11,500. Using the 70% three-year value figure the truck would be worth about $17,900 if you sold. The difference between what you owe and what you sold for is +$6,400. You can think of buying a Tacoma vs Leasing a Tacoma as a forced savings plan ;-)

Now, take that $6,400 you collected and divide that by 36 and your $480 monthly payment on the purchase was effectively reduced by $177. That results in $303/month vs $485 monthly cost.

If you can lease the same Tacoma for $303 with $0 down then the purchase/lease debate is a wash. If you understand the time value of money or opportunity cost of $ and can take advantage of either then the lease would probably be better, even if it "cost" a bit more overall.

Yeah I know, cherry picking numbers and there are a lot of "ifs", "then" and "maybe" in the calculus...I get it. But like you said, the Tacoma's crazy resale makes figuring everything out a bit more complex than "regular" vehicles. As always, buyers have to do their own due diligence.

Bottom line? What appears to be a bad deal might not be...The Tacoma's resale might bail you out in the end. Plus, how can driving a Tacoma be a bad thing?

 

My bad. I thought it was trolling. Sorry.

 

Hello All.
Just read through all of these answers and am much more confused than when I started and that is OK for now. I will call Toyota Finance soon to explore any options we might have... I truly want to thank all of you for your answers, advice and opinions... It takes time and energy to reply and I appreciate it. If you will allow me to clear a few things up... It is not so much a financial "hardship" that I ask about getting out of the lease, it is more of a "things have changed" reason. My wife got into an accident with our beloved Pilot (she is OK, the Pilot, not so much...) and it may not be "fixable"... We went on a short trip with our 3 grown children and the Tacoma was very "tight" fitting. We need a "people mover" vehicle like our Pilot was and the Tacoma just didn't cut it. It isn't the truck obviously, it is our situation. Thank you again for all of your help and I wish you a very happy, safe and healthy New Year. Peace.

Sincerely,
Rich