2017 Lease Payments

Lease could potentially be the devil in disguise

 

I probably came across as a salesperson, because that's what I am. It wasn't my intention. I love being around cars, and found a way to do that, that keeps my hands clean, and allows me to sleep well at night. I worked for a dealership for a few years and, I hated the way they took advantage of people with bad credit, or people that didn't know how to negotiate. They would sell a car for a loss to one customer, and make ten grand on another. I don't think there is anything wrong with being a salesperson, if you are professional, fair, and honest with your clients. Use a dealer, broker, or whoever you feel comfortable with. The last place I'd be looking for business is on this site. My best customers let me do my thing, and listen to my recommendation, because I listened to them first. Just like a good mechanic doesn't want his customers standing beside him as he's working on their car, and asking why he didn't do this or that. I've seen plenty people buy directly from a dealer, and get completely screwed over, but hey, they save that additional cost a broker would have charged them right?

Don't think for a minute, your broker isn't making more than $200 on you. He's most likely getting a commission from the dealership to bring them a customer. This is how most brokers work. It takes a lot of customers to pay his bills, and make a profit at $200 a pop. There is nothing wrong with that setup, if you are comfortable with him and you feel you are getting value for his commission.

I'm on this forum because I bought a Tacoma, and thought I could be a little help when people ask about something I know about. Just like some on here can explain the difference in the Tacoma 4x4 system and the one in a Subaru, and what lift kit is better for off-road vs. rolling up at the mall. I'm happy to answer any real questions anyone has about leasing or financing.

 

Is the negotiated lease different for a business vs. for personal use?
I am a small business owner and would want to own the truck at the end of the lease. I am assuming for a business you want to have higher lease payment that can be a business write off. So that way the residual value at the end of the lease is less? Does the business purchase it at the end or just buy it personally?

I am going to see my accountant next week, is there anything else I should ask him? Hoping to get a Tacoma TRD OR 4x4 DCSB by the end of the year. We'll see how that goes. Tempting to look into contacting a broker to do all the work for me.

Chris

 

Right, and if you could lease it for 300/mo that would be a better deal. You also would never pay for an oil change, tires, or brakes.

 

This is the approach I use. I pay the vehicle off using my lease payments so the truck is 100% deductible. When the lease is matured, the truck is payed off and I assume ownership then depreciate the asset.

 

I get asked alot from customers if free maintenance is included in a lease. I am not aware of any lease with free maintenance. Some dealers may quote a lease with a maintenance plan built in, but the payment would be cheaper without it, just like a retail loan. Dealers like leases because they have more control and retain more customers with a lease, so they may use the maintenance plan built in as a selling point to talk more people into leasing. Just an FYI.

 

2017 TRD OR DCSB 4x4 for ~$42000 OTD (CA Sales tax.. gotta love it)

$4k trade in equity, $433 a month 12k for 36 months (Tier 1)

Went to 3 dealers and no one would move a dollar on the price of the truck, paid sticker.

 

There are basically two types of leases; open and closed end leases. Most consumer leases are closed end leases. A closed end lease allows you to walk away at the end of the lease. These can be done as a personal lease, or you can do it in the company name, depending on the lender. Most will want a personal guarantor on the lease, unless the company has a lot of credit. If you want to own the truck at the end, you can build in as many miles as the lender will allow to drop the residual, raising you payment and write-off. The lower residual, the lower your buyout at the end. The only bad thing about this type of lease is most lenders won't let you build in over 20K miles a year.

An Open-end lease is what most commercial leases are. They usually set the residual lower than a consumer lease. You can also lower it if you want, down to a certain percentage. At the end of the lease, you can buy it out at the end, or the leasing company can sell the vehicle at auction. If it sells for less than the residual, you have to pay the difference. These are designed for the vehicle to be purchased at the end of the lease. I'm not sure if all open-end leases allow you to let the lender sell it at auction and you pay the difference. Our's does, but not all may allow this.

I'm not sure why so many accountants strongly push their clients to leasing. Possibly because it's simpler for them. You can write off a company vehicle on a purchase or lease. Leasing is simpler to track and keep up with. No mileage, or receipts.

 

You don't pay the full taxable amount of the final price on a lease. Tax is added to your monthly payment somewhere between $14 - $25 a month.
That's how I interpreted your post

 

Used the equity in my truck ($7600) minus $1600 cash back in my pocket and my payments are $303 a month for a 36 month lease. Did I get ripped off?

 

I'd need to know more about your lease to know if the dealer made an outrageous profit. Was it a TRD Pro, or a base SR5 2WD? My guess is they made more on you than if you didn't have equity. They showed you a great payment, and you possibly didn't negotiate as much as you would have, if they showed you a $469+ payment without the equity. Just a guess. Did I get ripped off depends on what your goal is. The problem with putting that much trade in equity into a lease is, you can't replicate that deal again next time, unless you come with $6000 cash next time. You won't have much, if any, equity at the end of this lease. Your equity just brought down the payment. Had you had no equity in the trade, your payment would have been higher by about $166 a month ($6000/36mo), everything else the same. I rarely advise people to put more than taxes down on a lease, unless their situation dictates it. For example, maybe you have a kid in college, and need the low payment more than the equity, and when the kids graduates in 3 years, you'll be able to afford a higher payment, and you are good with that. This would be a decent reason to dump a bunch of equity into a lease.

 

Do you not know what Toyota Care is? And you work for Toyota or another company? Every Toyota in the U.S. comes with 2 years 25k worth of complementary maintenance, buy or lease. I'm an employee for a Toyota dealer, we like leasing for a variety of reasons, retention is certainly a major factor. It has as much to do with handling unrealistic payment buyers, and building a portfolio of off lease certified cars.

 

Ripped off is a relative term, and since you had a trade there isn't a way to really go back and figure it out. Did you really have $6000 in equity? How could we possibly determine that. We would need to know what the dealership ACV'd the trade at, and even at that we'd need to know their policy for ACVs. Then knowing all that information, what'd the trade end up going for? Was it Retail or wholesale? And even if you figured out what they ultimately received for the trade, it's still a variable. Who knows if they did a good job turning it or not. At the end of the day what's done is done it's not worth much thought.

 

For leasing for business use as described a few posts earlier, does your accountant recommend operating or capital lease?
http://www.carsdirect.com/auto-loans/commercial-vehicle-leasing-operating-vs-capital-lease-options

 

I don't work for Toyota. Based on their website it's the free maintenance that comes on every new Toyota for the first two years. This comes on leased as well as purchased vehicles.


ToyotaCare
Peace of mind everywhere you go.

Toyota is devoted to safety and dependability, and proper vehicle maintenance is important to both. That's why we include a no cost maintenance plan with the purchase or lease of every new Toyota for 2 years or 25,000 miles, whichever comes first. 24-hour roadside assistance is also included for 2 years and unlimited miles.
Welcome to the ToyotaCare advantage.

*ToyotaCare covers normal factory scheduled maintenance for 2 years or 25,000 miles, whichever comes first. 24-hour roadside assistance is also included for 2 years, regardless of mileage. See Toyota dealer for details and exclusions. Valid only in the continental U.S. and Alaska.

 

My business leases the Lx570 as capital lease

Because end of the lease there is a "sweetheart deal" for it to be to sold to me at pennies on the dollar given I have already depreciated most of it through the LLC

 

well when the pro is getting turned in, let us know, well then again, not sure I would want it if the oil has never been changed.

 

My PRO has been paid for. It isn't an office lease. It got oil changed 3 times already. Turned 4305 miles this AM.

 

Ahh, I thought it was a lease, well in that case, let us know...wait 4300 miles and 3 oil changes? nice

 

I only get one office lease at a time. Currently LX is the office lease, it has 11 months remaining . The PRO is mine. Cant show up in meetings with a client in a PRO, would never get any business and would get laughed off by security and not let in the gates