Did you buy or lease, and why?

I thought leasing was what rich people do? One of my wife’s friend who makes good money is always leasing Mercedes, BMW, Audi’s every three years.

 

How much did you have to put down to get your payment to $289 per month?

 

Sorry, but that is total BS to justify a lease. What makes little sense is thinking that after 2 or 3 years of payments you will have "minimal equity" if you bought and more equity if you leased. That is so wacky it made my head hurt.

You would have a TON of equity unless you have a FICO of 590 and bought a truck from Larry's "We Tote The Note" truck sales. Think about it logically (and mathematically): If what you are saying were true, the Taco would have horrible lease deals. But it doesn't..just the opposite in fact. Why? Because a 24 or 36 month old Taco is worth about 80 percent of its original purchase price! A high residual means the lease payments can be low. The fact is, since loan payments will be higher than lease payments by purchasing you actually have MORE equity after 24 or 36 months than if you leased (!). You paid more each month on the loan vs a lease, so hopefully that doesn't surprise anyone....

If you buy a truck for $35k and put zero down your payments are $530/mo for 72mo @2.9
At the end of 36 months you have a truck worth about $24k that you still owe $18.2 on

That gives you a bit under $6k in equity (!) And, you don't HAVE to sell and you don't HAVE to worry about mileage, mods, damage, etc.

Soooo you would have a TON of equity at 24 or 36 months with a loan, even with zero down payment (!). Everything that works to make the Taco a great lease (and it is) makes it even a better purchase. Bought (didn't lease) and want to get out in 30 months? Easy Peasy! Put the truck on CL for what you owe or a few bucks more and sell in a couple of days...Done.

99 precent of people lease because they can't afford the payments if they buy. End of story. The other 1 percent lease because they can figure out the opportunity cost of their $$ and have the know-how and skills to increase their income or net worth by not moving $$ to a depreciating asset. Those dudes are few and far between and for them leasing can make perfect sense.

 

Like I mentioned in my previous post, I’ve leased Audis and a Tesla due to their depreciating values, reliability and high cost of ownership. The Tacoma is the complete opposite of those vehicles so purchasing makes sense in this case. But if you just don’t know what you’ll want in 3 years or can write off the lease as a business expense than leasing makes sense. Those who lease to buy are the ones that confuse me. You pay for 3 years on the lease, then you pay another 5 years to pay off the remaining balance of the vehicle. Both the MF on the lease and the used car APR will be higher than the APR on a new car loan. And by the time you own the truck it’s already 8 years old. If you want to lease to see if you’ll like the Tacoma instead of purchasing straight out, then you’ll be better off trading the truck in and purchasing a new one at the end of the lease. The key is to trade the truck in, not do a lease return on it. That way you can take advantage of the positive equity it there is any and won’t get charged for damage, excess mileage or pay the lease return fee.
The exception is if you got in to an accident which decreases the trade in value. Then you’re better off just returning it as a lease return.

 

I don’t believe you got a better deal for cash. Dealerships make money off financing so you should never tell a dealership you’re paying cash until the price has been negotiated and you’re sitting in the finance office. You’ll never get a better deal offering to pay cash upfront, then if they think you’re financing the vehicle.

 

Bought it and paid it off already. Because I think leasing a vehicle is foolish.




You asked

 

Leased. I have never owned a truck before. I figured I could turn it back in if I didn’t like it. Truck will be bought out at the end of the lease. I like it way more than I thought

 

Awwww.

 

It's been 3 years since original post. Did OP buy out his lease like he planned to? Curious to know how it turned out.

 

It depends on how much you average on your investment returns. If interest rates are at 3'ish or less and you average a good bit more than that on investments, you are better off making payments.

 

Leased here because of We were on the borderline of wanting a 1/2 or 3/4 ton truck. For now the Tacoma Is great pulls my small boat around and the family around fine. But we have kicked around the idea of getting a camp trailer and what not. For 3k down and $299 a month I figured that’s worth a shot to try out the smaller better daily driver truck and see where we are at in a couple years.

 

I’ve heard tons of people explain the advantages of leasing but when you do the math it’s rarely true. Here’s where I do think it makes sense - hybrid or EVs. Projected long term cost of ownership on those are high so it makes sense to dump them regularly.

 

I actually am putting down about 2/3 the cost Of my new truck so I guess I am playing devil’s advocate but...
Scenario 1: $40k cash for truck 5 years later=$29,000(value of truck)
Scenario 2: 0% APR. $8,200 in checking each year for payments, $31800 in a CD@2.5%.
End Year1 cash=30,795
End Year2 cash=25,005
End Year3 cash=17,225
End Year4 cash=9,250
End Year5 cash=1,050+$29,000

-as a previous poster said though, maybe one percent of people actually do this
-many different ways to look at things

 

I am not well-versed in leasing but from what I understand general rule of thumb is NEVER put more than $500 down. Preferably zero down. See post number #110 of this thread for a better explanation

 

But if you lease a truck you can’t use it like a truck.

Take it off road and scratch up the underside or get pinstripes? Nope. Load the back up full of shit and scratch it up? nope. Making a pretty capable truck more capable with a lift and armor? Nope. Making it your own with mods? Nope.

I couldn’t even imagine wanting a Tacoma that I couldn’t play in.

I took mine off-roading the day after I picked it up off the lot. Bone stock, bouncing down as many Colorado roads as I could that first summer.

I’ve had it almost 3 years and put over 110k miles on it. Driven her through 36 states, up the west coast and down the east coast.

If I leased her, she wouldn’t have the same personality. As it stands she burly and ready for adventure.


Take her off-roading on every Colorado 4x4 roads within the first month you have her knowing you are banging up those cheesy stock skid plates? ✅

Take her apart and make her even more capable? Including cutting and hammering metal? Yup! ✅


Add switches for your after market lights by cutting a hole in the center console? ✅


Drive her 5500 miles over two weeks with kayaks on the roof racks to go off-roading in Arizona, Utah, and Wyoming? ✅

 

2017 was voted the best year model

 

I leased mine. I am paying $260 a month for a 2020 off road with no money down and TTL included. This is for 2 years at 24k. I've always wanted a Tacoma and honestly couldn't afford financing it. This was the cheapest way for getting one. I'm not sure what I will do when my lease is up but I am really enjoying the truck right now.

 

Depends, when you lease the car, do you have the full amount money at hand? Is your credit score excellent? If so if you lease and invest the money, investment return will absorb much of the cost. For example let’s say you buy a 40k Tacoma, pay 5k upfront and lease the rest, you will have 35k at hand. Average investment return rate in the US is about ~10%, so 35k investment should bring about 10k in 3 years. That will cover most of the monthly lease payments (depending on you credit score and investment return, it can actually bring more on yearly basis than what you pay). 10% is an average though, you can make more if you are good at it, or make a long term investment. In the end you cost for 5 years will basically be what you paid upfront. When you pay cash, the money is gone and can no longer be invested.

 

How did you get an OR with $0 down and $260 per month? Especially if that payment includes the interest (MF) and taxes.
What was your negotiated sales price and what MF and residual did you get?
If it is true, then that’s one hell of a deal.

 

You lost me at pinstripes