Buying after lease

This is the challenge that I have when it comes to leasing, in general. You keep repeating the same process over and over again. Don't get me wrong, there are some compelling reasons for leasing (tax deductions if you have your own business, etc.). But you may want to consider getting off the merry go round. The real value of a Tacoma is long term reliability. I bought my 2005 and kept it for a long time -- never really had any major problems (except the frame replacement which Toyota took care of). Leasing a Tacoma it is hard to come out ahead because they hold their value so well, as has been well documented.

 

Value can be easily determined via KBB or other sites. If the vehicle is not worth it’s buyout, move on. Do give some weight to the fact that you know the vehicle and it’s history so there is some value in that.

Is it a financial issue that the new loan payment will be higher than the lease payment and screws up the budget? Or do you just not see that now used vehicle as being worth it, even if actual value says it is.

 

I bought my 19 TRD OR in October of 19 and it only has 1,900 miles. It fairly well equipped and the OTD price was $36k including TTL and Dealer Fee. Looks like I'm in good shape then.

 

But don't forget that he got to enjoy it for 3 years...I'd keep it!

 

I actually just decided yesterday I’m keeping it! Currently shopping for the best rate. I test drive and tried out everything recently: Colorado, Ranger, new Tacoma, and even the Ram and Silverado to see if I would like the bigger size (I didn’t). I think I’m just really hooked on the Tacoma. My sport is pretty loaded out and I felt like comparable features on the Colorado or Ranger were crazy extra options. Plus the fact that I was exploring the used car market more and it’s all comparable numbers for my buyout of $29,300 plus tax.
At the end of the day I just can’t return a truck I enjoy that’s super clean, convenient, well baby’d by me, with only $11k miles.

 

Plus, if I change my mind in a few years, maybe the new generation is out and I still have a pretty valuable truck.

 

My two cents...get out of the leasing cycle like others have mentioned. I did it for years and I'll never do it now after owning a couple of cars for multiple years with no issues other than normal upkeep. If you do not drive a ton, it's even more incentive to own a vehicle rather than leasing. I believe it costs, on average, %14 to lease a car if compared to an auto loan. This also comes down to personal finance and whether or not you can actually afford to hold a loan on a truck that expensive. Only you know that.

 

Good advice and how I’ve been thinking.

 

Should have not leased in the first place...

 

Oof! That is a wicked high residual. Trade it on another Taco with better terms?

On my non-Tech / non-Prem Sport, I had $1,600 down, $409/mo, and a $23.7k residual. I bought out my lease last year so that I could still get new car financing rates. There was small loss starting with the lease, but we were able to afford it during a tough time.

Good luck!

 

It looks like you decided to buy out your lease, but figured I'd add my advice in anyways, just in case it helps. I understand the points that you know who owned it and it only has 11k miles, so buying seems like a logical choice. I think you should look at options and thoughts that I haven't seen mentioned. Based on your high residual (~90%), should have been closer to 80%, buying it will be a terrible financial decision. I'm not sure what Money Factor (MF) you have been paying for the 3 years, I'm assuming it's high based on the residual you accepted. At this point you've been paying probably between 7-9% equivalent interest to lease the truck. Now if you purchase, it would be a used car loan, which will be 1-2% higher interest rate than a new car loan. You'll be paying that over the next 60 months...don't stretch it to 72 months. So after all is said and done, you'll own the truck after 8 years and a buttload of interest. The Tacoma devil on your shoulder is saying to keep it, but the common sense angel is saying run away from this truck at lease end.

I would look at the private sale value of the truck and see if you could get the $32K or close. People are looking for Tacoma's and paying more for used models than normal since new ones are hard to find. Who knows, maybe you'll get lucky and find someone who really wants a low mileage Tacoma and pays more, that's just money in your pocket.
Your other option is to return it at lease end to the dealer and buy or lease a new Tacoma. If you lease another Tacoma, please make sure you negotiate the sales price, MF, and Residual. The MF and Residual can be found on the Edmunds car forums. They are set by Toyota based on region, you should never pay a higher MF or higher residual than Toyota publishes.

In 5 years you'll either own an 8 year old truck or a 5 year old truck. Let's say the difference between new ($38K) and old ($32k) is $6k difference. The difference in monthly payments would be around $120 ($20 for every $1k financed). The difference would then be less since a new car loan is a lower APR than a used car. If you can get a promotional finance rate through Toyota, the difference between a new car loan and used car loan will be even greater. If you do decide to go back to an SR5, then it'll be even more reason to return and just buy an SR5.

Ultimately it's your decision, but I would seriously look at the Tacoma as a possession and see if it's really worth that poor of a financial decision.

 

thanks for the advice, everyone. I really appreciate it. Just to be clear, I misspoke earlier...the residual is $29,375 and with taxes brings it to roughly $32k.

 

and feature wise its a 4x4 double cab, short bed, premium and tech package, tow package, all weather mats, 5' tube steps, mudguards, soft cover.

 

Can confirm this happens here all the time.

 

Its funny how this works. I found a used base model 2018 OR with 20k on the clock for 500 more than a new OR at the dealer I had negotiated down, but the dealer truck had JBL, tech package, leather, sunroof etc!

 

32k .. for buyout umm nope hand them back the keys . Sorry to say this they boned you on the deal . Leasing is great if u plan to get rid of the vehicle at the end of the lease and the payments are low . u can always negotiate the buy out price but usually they don't budge much and give u the this is the buyout crap . Your better off buying it out then leasing .If your looking to purchase the truck always have the money to put down then do as a purchase . Never lease then try to buy it out u will just screw yourself .

 

Leasing is misunderstood by a lot of people. It works great IF:
you know what you're doing
you get a good discount on the truck and a good rate

Where I live there is no negotiating the residual. It is set by Toyota. So that makes it easy. Negotiate price of truck and you're set. However, I see negotiating a residual is maybe a thing in USA? I'd actually prefer a super high residual so my monthly payment is lower and I can just give the thing back. Best lease deals are ones where at the end of it the market value is lower than the residual, you know you have paid less than your fair share of the depreciation! Now if you're in the opposite scenario, and you still want to keep the truck that's also ok. Or in that case you can sell the thing, or trade it in and have some positive equity.

 

Well done; good choice.

 

At the end of the lease you just need to do the math for your specific situation. If the buyout of your vehicle is much less than purchasing the same truck on a used car lot, it can make a lot of sense to buy it. If the buyout is too high, turn it in/trade it into a new lease or purchase of another Toyota (or different brand). No doubt, leasing then purchasing will end up costing you a couple grand versus straight purchase but in not everyone's finances allows $500.00/month car payments.

 

Could be off base here.

If you like new vehicles, and don't want to worry about maintenance, a lease is fine.

If you plan on buying it because you like it, what is the difference in price between your current offer vs a new of the same mode?

In 3 years you put 11k miles on it so maybe a peace of mind thing is in the mix like I stated before.

All in all if you're gonna get into another tacoma and are considering buying the one you've been leasing, that's fine. But don't turn around in 3 years and say the same thing with a 2020 lease. That's just a treadmill.