Leasing: Good Deal or Not?

OP said residual value is 29,000 so that will be the price plus taxes and interest if he decides to buy it after 36 months and not $36,000.

 

Pretty sure he meant OP can buy the same truck for $36,000 if he financed as opposed to leased. This all in lease would be well over 40k if you do the math should the OP decided to buy at the end of 36 months. You only pay taxes on the depreciated amount over 36 months which means at the end of 36 months you are liable for tax on the residual should you choose to buy. In my local, it's around 3k. So long as you feel the truck is worth more than 32k in 3 years it's good.

At the end of the day OP leases usually make it more affordable now, albeit more expensive overall, just don't do any mods that are more than bolt-on if you think there is any chance of not keeping it.

 

don't forget to add down payment and 36 lease payment to residual

 

If you finance it you don't own it either, finance or leased both have a lien on the title.

 

If he drives 18k miles per year just write the lease for 18k miles.... But I wouldn't even do that as I've never seen a savy buyer return a Tacoma lease, just doesn't happen. You'll either buy it or sell it and in either case the mileage penalties don't come into play.

Tax write offs are a nice bonus but the main reason to lease has always been limiting liability. If the car is stolen, crashed, totaled or sold you made out like a bandit by leasing, you're hedging your bets by leasing a depreciating asset.

 

It sounds like you would be upside down in a lease because you drive a lot of miles.
I would recommend you buy new or slightly used.
Since you are asking ​

 

Run the numbers for your expected length of ownership. Purchase/finance vs lease/buyout/finance.

Which option works out best in your favor?

We can discuss all day long with suggestions based on unstated assumptions and emotions -- but the reality is in the numbers. Calculate those out and see what they say is the better plan.

 

OP unless you live in Texas, Ohio, New Jersey or Oregon I'd highly recommend going for the lease. It leaves your options open so if you decide you want something else it'll be a lot easier to get out of.

If the truck is in an accident that torches the carfax you'll be glad you leased, as now its Toyota's problem.

If the truck is stolen or totaled, you'll be glad you leased, as you saved yourself thousands in taxes you never had to pay.

If you decide you want to change it up and sell it you'll be glad you leased, as you'll have more equity (again from the taxes you never had to pay)

If none of these things happen and you decide you want to keep it for the long term, you can buy it out at the end anyways like I did with mine

 

I leased a vehicle once with the mindset that I would just have a truck payment as part of my ongoing budget and get a new vehicle every three years. The only reason I went that route that I didn't exceed the yearly mileage at the time and I got more vehicle for the payment plus it would be under warranty the entire lease agreement. Things changed and I switched jobs and moved to a bigger city and buying made more sense than paying mileage penalties plus I needed a small commuter vehicle. With that being said look at your situation in life and not just the payment, there are plenty of variables in life that can change and make a lease less desirable. These days I just buy because once its paid off its really nice not to have a vehicle payment and I can mod it to my hearts content.

 

I've been beat up pretty good for my opinion on leasing but still feel it's a terrible financial move. No good financial consultant (dealerships are NOT financial consultants) will point you toward a lease. I strongly suggest a purchase. Consider a slightly used vehicle that you can pay for in 3-4 years then continue making payments into your savings account. In 5-6 years you'll have a good down payment on a newer vehicle. You're safe doing that with a Tacoma because the resell value is good and the maintenance is low.

 

You gotta haggle get that residual down

 

I keep a vehicle payment in the budget -- and when the vehicle is paid off I keep making those "payments" into savings towards the next vehicle.

Avoids the lifestyle impact/pain of a sudden truck payment that wasn't part of the budget.

 

I don't see how you would come out a head if you bought at the end of the lease instead of buying outright, if that was the case everyone would just lease and then buy. Leasing is for people that want a new vehicle every couple of years.

 

*sometimes* the manuf. will heavily subsidize the lease -- typically when they feel they need to move a particular model for whatever reason.

Again, best thing is sit down and run the numbers to see what the total costs will be and which option makes the most sense for the individual situation.

 

From my own experience, I've done multiple ways of financing a vehicle. One, I've done a balloon payment where they differ a percentage of the car to your last payment (this was a horrible idea but I did have a considerably lower payment). I was lucky enough that after 6 years I lemon lawed the car and got my money back. I've leased a car I was sure I was going to buy. However I ended up hating the car and returned it 4 months before my lease finished which worked out cause I save a lot of money and in my Tacoma I opted to flat out purchase it. I was happiest when I did this. There is no set answer to purchasing or leasing. Low payments are great, but less interest is even better.

 

Leasing??? So, let me get this straight. You're gonna' put money down on a Taco that you're gonna' rent and then either give it back or start new payments on the Taco you've been driving and paying for... for three years??? Is that right?

 

That's right. It works great if you use the vehicle for a business so you can do a tax write off, or for someone that always wants a new vehicle. To lease with the intent of buying just to get 3 years of low payments, may not be the best idea.

 

If you can't be comfortable with the higher payment of buying vs. leasing, there's no way in hell you should (or in theory could even afford to) be spending money to modify the truck while leasing.

 

Bottom line he can’t afford the truck. Op might be able to get the payment he wants by buying an SR or SR5.

 

Typically when it comes to a Tacoma, leasing is a bad deal because they traditionally over-estimate the depreciation and your payments are larger than they should be.

Oversimplifying the shit out of this but current deal is $3k down and $333 a month for 36 months on an Off Road. That means $15k paid in total which is roughly 40% of the purchased value. If the internet is to be believed, that's the 5-year depreciation estimate, not 3-year so you're paying way more than you should.

If you plan on letting it go then it's not terrible because you'd see similar loss in a trade-in but if you want to keep it, you're wasting about $3-4K