2017 Lease Payments

You're not throwing away any money. The money you paid towards the lease is going to pay off the vehicle, just like a regular loan.

The Tacoma is a strange beast since the residuals are high ~ 70%.

The upside to that is that the monthly payments are low, but the downside is when you buy the car at the end of the lease, it is worth more, so you're paying more.

But...

Tacoma's hold their value so well, the value after 3 years is usually much higher than 70%, therefore you pocket the difference.

 

Actually leasing is perfect for vehicles like the Tacoma, at anytime you can sell the car and make money. Unlike most leases you are not able to get out of the lease until the last 6 months. Vehicles with higher residuals are wonderful
To lease. You get a new car and have a few thousand in equity to put down on another.

 

I'd love to hear how you can pay a down payment, and 400+ a month and make money selling selling a vehicle. On the other hand, I purchased my 05 Tacoma used in 2007 for $24k. I've driven it daily for 9 years now... It's current value in my area is every bit 20k. Roughly 4k lost in 9 years. By the time you've made 10 lease payments, you're behind my situation. Even if I had purchased new for 7k more, it would still be a better situation.

 

Let's say you buy the car for 40k and with taxes and interest you probably in the truck 48k. Over a 72 month period your probably paying 675 a month. Ok now let's say you lease the same truck. You put 500 down and your payments are 350 for 36 months, at the end you have the option to purchase the truck for 28k but it's worth 33k. All your doing is paying a smaller monthly amount over a shorter period. At the end of the lease the person can sell the truck, make a 5k profit and get something else. I think people are not understanding the process and that people that lease do not plan on keeping the vehicle. That's the point I was making, if you are gonna lease a vehicle do it on something that will hold its value so you have something to show at the end. People lease vehicles knowing 100percent that they will have nothing to show for it at the end. I'm not trying to debate which is better, I simply pointed out that leasing a truck like the Tacoma is actually a smart move if you are going to lease.

 

Based on some quick calculations based on my current deal, and very rough, with me trade I could lease for about 30 bucks a month, then at the end of the 3 years, take on a new loan for at least 650 a month. Those first 3 years sound dam nice, but the next 3 could suck big time. I like the middle ground of 300/month for next 6 years. I doubt I will go that long, I will keep it under 600/month depending on rates. Here we don't have a pay off penalty so, I always go lowest rate for the longest term possible. We just paid off my wife car a year early using this method, so if its not broke, don't fix it.

Oh also, I heard that if you lease, its common for the dealership to knock off 1 to 2 grand off the sticker right up front. That also helps keep that payment low. I will say after this conversation, I could see some value in leasing a Taco. Oh and the poster who said the Tacoma is bad to lease, that is just the opposite. Because they hold their value so well, they are actually a very good lease option. And this is from a former car sales guy.

 

Now let's say you lease a sedan like a Nissan Altima, (just using this as an example) at the end you will probably turn it in or trade it on something else with no equity, maybe a few hundred dollars at best.

 

but no one is making money by leasing a vehicle. Yes you have some equity, but your not making money on a vehicle.

 

Depends on what state you live in and how taxes work.

Quick example, not common but just to show you WHY leasing can save $ lets say you buy a Tacoma for $36k and get cold feet and sell it within the first couple months for $35k*. Lets just assume you've only made 1 or two payments in either case so your payoff stays about the same (to keep it simple for this example)

If you purchase it in MOST (but not all) states you pay tax on everything up front. I'm in CA so purchase price of $36k + TTL = $39,600 actual payoff amount if I put $0 down.

Lets do the same thing on a lease: $36k + license/reg + $595 acquisition fee = $37,080 (actual payoff amount if I put $0 down)

Now lets say I sell the truck to a friend for $35k.... If I had financed it I just lost $4,600!! ($39,600 - $35,000 = $4,600)
But if I had LEASED it I would've only lost $2,080. ($37,080 - $35,000 = $2,080). So in this situation leasing would've "saved" me over $2,500 vs outright purchase or finance.

Even if I waited to the end of the lease and sold the truck in 3 years my residual/payoff would be about $27k, that's $27k I NEVER paid tax on, which in many states is about $2,000 right there.

The only way financing a Tacoma works out better is if you KNOW you're keeping the truck for the long run.

If you sell the truck in 3-5 years you're better off leasing and some people like to hedge their bets and keep that option more open by leasing.

 

You're not "making money" you're "losing less money".

If I have the option of losing $5k or only losing $2k some people would see that in a way as "making $3k" because that's $3k you get to keep that you were about to give up. Not the wording I would choose but the #s pencil out...

 

I agree, losing less.

 

Nicely put, I considered this type
Of approach in explaining the losses but I think you explained it perfectly. Plus I'm in the middle of a 10 page paper. Haha

 

Assuming NOTHING goes wrong in that almost decade of ownership.

I did the same thing with my 2005 (purchased for $18k drove for years and sold for $17k) but in that time I also purchased tires, brakes, wheel bearings, shifter linkage broke, rear leaf springs, new shocks, multiple fluid flushes, battery, belts, alternator, repainted fading fender flairs, repainted bumpers, etc etc etc. Yeah I only lost $1k in depreciation but I spent thousands in maintenance. On my brand new 2017 assuming I sell it in a couple years I'll have lost thousand in depreciation but literally $0 in maintenance (all under warranty and have 3 years free maintenance through my dealership). So in this situation I STILL end up roughly the same $ wise, but I get to drive a BRAND NEW Tacoma instead of one that's already 8 years old.

 

I have literally only changed the oil and put gas in it. Still haven't done brakes. I swapped out wheels and tires and a few other things to my liking, but never any repairs. It's been paid off for 7 years now. All of that money is in the savings and I'll pay cash for my next Tacoma.

 

I would have done the same exact thing as you did if I was planning on keeping my vehicle,your approach makes perfect sense for people keeping the vehicle but a lot would rather have a new one in a few years and it makes no sense to pay taxes and interest on something you don't plan on keeping.

 

Let's end the argument that you can 'make money' from a lease. Obviously you can't. You're still the purchaser, and you're buying something that will lower value with time and use.

On a Tacoma, you never want to turn in the truck at lease end. You want to either sell it yourself, keep it (buy it), or sell it to a dealer.

 

Thanks all for your input and the lively debate on the pros and cons of leasing.
I ended up signing papers on a white 17' TRD Sport. They had difficulty getting an Off Road and had a better deal on this one. Final numbers were MSRP $37133 and selling price of 33800 with $1000 of equity in my Rav 4 and $600 towards fees etc. Final payment is $400 a month for a 3 year 15K a year lease. Will post pics when I pick it up!

 

That's a good deal, so total you put 1600 towards the up front money down. What options does it have. They took off a over 3400 dollars, wow that's a lot.

 

Yeah that was with the $1000 trade in equity. Just has all weather mats and tow package. Really wanted tech package but it brought it up over 40K. The only thing I used a lot in my Rav was the blind spot monitoring and wish I had it here. Just going to have to look extra carefully now on the highway!

 

Yea it gets pricey, it sounds like a great deal. With the residuals being so high these trucks are leasing out very well, I am sure your buy out at the end is around 27k or 28k, the truck should still bring around 30.

 

The buyout is at a 69% residual which come to like $25800