Buy or Lease - what say you?

after three years i'm not stuck with that depreciated vehicle...

 

at 20 cents a mile its about $4800 in mileage..

 

Look at it like this...

Buying or leasing, it depreciates the same no matter what. You’re not renting as you have options at the end of lease. Besides, most of the lease payments go towards principle as opposed to 2 to 5% interest or more to buy it from day one. So if you buy it at the end (depending on remaining payoff) you only pay that interest on the difference in price. Paying the interest on say, 15k is slot less than paying it on 30k.

 

Considering all the issues people have having with the 3rd gens, leasing this makes more sense . I've owned Gen 1 4Runner and Prerunner and both easily went past 150k without a single trip to the Stealership but the 3rd gen is not made like the old days now. Too much tech packed in..too much software controlled.

Almost thinking of going back to my dealer and picking up the 18 OR 4x4 for the $399/month 3yr lease. Enjoy it and then drop it back in 3 years and lease the 2022 Taco in Diesel .

 

I used to think the same way, leasing is stupid and pissing away money. I know took the time to research and discover that you do not lose any equity and leasing is smart because of the extremely high residual on these trucks. Never put money down on a lease and always negotiate the sales price. Most uninformed people don’t understand leasing and just go with the crowd and say oh leasing is terrible, if you can’t say cash you can’t afford it. I only think about cash flow, and taking a 6yr loan at 4-500/mo is not better than 340/mo for a 40k truck. If the thing tanks at the end and isn’t worth the payoff, then I’m glad I leased, if I don’t like it at the end, glad I leased. When mine is up, I will buy the truck for 3-4K less than market value and either sell it and make that money back, or keep it and enjoy the savings.

 

I have not read this entire thread, but I'm considering a lease also. I am not going to speak to your anticipated mileage because I think that alone rules out a lease for you. But, if it doesn't there has been some bad information posted. If you lease a truck then your lease buyout/ residual value will be predetermined at the time of the lease. Let's say it's 23,000. Toyota financial is notorious for setting these lower than reality. 3yrs/ 36000 miles down the road, time to turn in your truck comes. Based on the present market, it will probably be worth 28,000. Guess what, you have 5,000 in equity in that truck if you decide to purchase it. Trucks are very unique in this situation because the used market prices for them are so high. There are several great resources like leasehackr that could help you research these options and also know the very best lease deal available before you walk into the dealership. Do your research and do your own math. Good luck.

 

You can also negotiate the buyout at the end of the lease.

 

I leased $0 down and $289 a month. Buyout will be $23.5k & residual should be around $29k-$30k.

 

You mean market value should be around 29-30k. The residual is your buyout, that’s what the bank sets as the “price” it’ll be worth at the end of the term.

 

It's worth bringing up that, buying or leasing, the price 3-4 years from now depends on many factors. Trucks are hot now and Tacomas hold their value exceptionally well, but that could change.

Price of gasoline is one factor. (I still remember the gas crisis of the early 70's. My Dad parked his '71 Bonneville and got a Datsun 500 to drive to work. Couldn't sell the Bonneville.) The economy in general. The price of new cars relative to old. Any problems with the brand itself. (Diesel Volkswagens and VW in general were a big thing until the emissions scandal.) Tariffs--should drive cost of new up, so used will go up as well.

 

Yep...I was this close to signing the paperwork for a '18 OR 4x4 last Sunday but quickly realized that my X5 is paid off and running fine even though higher mileage. Much to the salesman dismay, I said sorry and walked out the door. It was tough leaving my Barcelona Red OR waiting for pickup in the dealer parking lot but at least I came home knowing I don't have any car payments and lower insurance..LOL. Best of all, anyone can T-Bone my X5 on the road and I wouldn't have any regrets on a paid off 7 yr old vehicle .

I'm still deciding though.........

 

Having been in the car business and personally owning over 18 vehicles its always entertaining seeing how ignorant average people are when it comes to leasing, so much flat out wrong information in this thread.

Without spending too much time on it I'll just say this: leasing can be fucking fantastic or it can make no sense at all. It fully depends on the incentives and resale value, with a secondary consideration to personal financials (a lot of people have tax incentives to lease).

To correct some outright BS:

1. dealerships average a higher profit when you finance not lease. But its often easier to close a lease deal as the payment is lower and consumers are extremely payment oriented.

2. Leasing is not "renting" it actually gives you MORE options and flexibility not less.

3. Depending on your state you shield yourself from a lot of tax liability if you don't keep the vehicle for the long run by leasing.

4. If car is totalled while you're still making payments it its a really good thing you leased as you're not fully committed, you've saved taxes in most states, and this is also why its recommended to put minimum down when leasing.

5. How many miles you drive is irrelevant to rather you should lease or not, a car that is a good idea to lease at 10k miles per year will also be a good idea to lease to 20k miles per year. A good lease is a good lease.

I have no idea what the current money factor is on the Tacoma but that would be the deciding factor on if it should be lease or not as we already know it has great resale vlaue.

If you can get a lower money factor than you can APR by all means the Tacoma is a FANTASTIC lease. I leased mine because I know how it works and how to take advantage of it. Third party leasing is also a good option although you have to know what you're doing to get it done right.

 

.00171 and 69% for an off-road in my area. The money factor hurts these deals but if you negotiate well, the residual can make up for it.

 

Ideally we would pay cash but if we can't afford that the next best thing is to pay off the simple interest loan as fast as possible. Paying 150% each month will save over $2,000 in interest charges on a typical Tacoma loan.

Otherwise unless you want to just rent vehicles and have a car payment in perpetuity calculate the cost of a lease by adding the total payments to the residual. If that is less than you would pay on the loan then it makes sense to lease and buy at the end of term. Dealers are pretty good with these calculations though and will most likely set the residual in their favor not yours.

 

So you’ve never leased before?

 

I've never come across a lease where you can negotiate a residual value at lease end. This is set up front by Toyota. Usually Toyota, Honda, BMW set their lease residuals low enough that there is very little risk of the residual value being more than what the vehicle will be worth at lease end. They want to make money from people that turn these back in by reselling them. I know third party leases exist, but they are very rare in Canada at least.

 

Only once. I'm not afraid to make mistakes but I try to avoid making the same one twice.

 

Here in the states you can lease through any bank the dealer will work with. I had the option of working with US Bank, Ally or TFS. Toyota ended up working out the best but all three had different money factor and residual numbers. The dealer cannot change the residual, that is set by the bank. You can negotiate the buyout price at the end of a lease they just don’t have to move off the price. They don’t want to take the car/truck back, it’s a hassle for them and most times they will come down off the buyout price, I’ve done it with every lease I’ve done (Toyota, Honda twice).

 

Can I ask why you felt that it was a mistake?

 

Say I financed it. 35500 purchase price. 38130 after taxes and dealer fees. 84 month loan at current 6.39% rate. 565 a month. End up paying 47391.12. Or 9261.12 finance charge. Either way you’re donating to the man. I don’t keep vehicles long and didn’t want a $600 payment. May lose a little more than if I financed but also not paying $600 a month to pay it down faster. If I can buy at residual value and resell for a couple grand more, it worked for me. Different strokes, different folks. Best would be to buy everything cash, but that’s not why I have an 800 credit score. Haha. Wish I could but don’t.