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Is the current lease deal a good deal?

Discussion in '2nd Gen. Tacomas' started by FloridaFeMan, Dec 13, 2012.

  1. Dec 13, 2012 at 6:35 PM
    #1
    FloridaFeMan

    FloridaFeMan [OP] Well-Known Member

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    In the southeast, Toyota is offering $239/mo. for 39 months, $2399 down payment, $25,248 adjusted capitalized cost. 12,000 miles/yr. Lease end purchase option is $19,369. This is on a double cab prerunner 2wd, V6, auto. transmission.

    I have been looking for a low mileage used Tacoma prerunner but most are very pricey and the payments would likely be around or more than the lease payments. I'd like to have lower payments for the next 3 years and then buy the truck at the end of the lease but $19,369 seems high for the purchase option.

    Thoughts?
     
  2. Dec 13, 2012 at 6:42 PM
    #2
    desert guy

    desert guy Well-Known Member

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    Is $239 include Tax in that payment?
     
  3. Dec 13, 2012 at 6:45 PM
    #3
    03f5sp

    03f5sp Well-Known Member

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    Just buy a truck. Instead of paying every month to rent the truck, why not spend that money to make payments and buy it? When your lease is up, you have nothing to show for it. Once the truck is paid off, you own a truck. I never did understand why people lease vehicles.
     
  4. Dec 13, 2012 at 6:52 PM
    #4
    WinTheDay

    WinTheDay Active Member

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    Not true. Your residual value should be a reflection of the money you saved..


    OP,
    If you do not plan on modding your truck, and you just keep it stock, leasing is a great option. Tacoma's residualize better than almost any other car or truck out there. With tier1+ credit, leases in the month of december have a very low money factor (equal to 1.9% APR). Not sure what region you are in but a 36 month lease is usually more cost effective than 39 or 42.


    Think of leasing as another way to buy a car. at the end of 3 years, you just have options. Pull the equity out if there is any (and on tacoma's there usually is), Turn the keys into Toyota and walk away, or refi the remaning and own it.


    Unless you can get 0% financing...leasing is a more economical route even if you choose to buy the truck.


    I sign up hundreds of leases a year, PM if you have any questions.
     
  5. Dec 13, 2012 at 6:59 PM
    #5
    WinTheDay

    WinTheDay Active Member

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    Food for thought:
    At the end of your lease, if you finance the LEV (lease end value), at a competitive APR with the same amount down (2399), you should expect around a 260/mo payment on 72/mo
     
  6. Dec 13, 2012 at 7:03 PM
    #6
    07SpeedwaySport

    07SpeedwaySport Senior MoFo'ing Member

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    Sounds like 31k to me. Plus the additional interest on the 19k when you get around to borrowing that. i would say 'no-go'

    Lease's are attractive to two people, but for different reasons.

    -the guy who always wants a new car and will never drive anything over 3-5 years. this guy plans on a car payment for life and doesn't mind it. He gets the benefit of a lower payment and not dealing with having to sell the car when he is done with it.

    -the guy who is somewhat broke and can't afford real payments. My opinion on this guy is that he should get a cheaper car. but i also live by the rule where I don't carry any debt except a mortgage (and pay double payments on that). if i can't pay cash for something, I don't deserve it. and I better not be emptying the bank acct either...which means if i don't pay cash and still have that much left over, I don't deserve it.
     
  7. Dec 13, 2012 at 7:08 PM
    #7
    WinTheDay

    WinTheDay Active Member

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    Keep in mind, as it relates to credit, leases are easier on your bureau because the only debt reflected is the amount of the lease, vs financing reflects liability of all the money...Debt to income is a huge factor, especially if you ever want to buy a house.

    07Speedwaysport is old school and I respect the hell out of that, but not everyone is as fortunate and sometimes leases are the best option if you are not in a strong financial position but dont want the used car payment (repair bills).
     
  8. Dec 13, 2012 at 7:41 PM
    #8
    FloridaFeMan

    FloridaFeMan [OP] Well-Known Member

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    Sorry, forgot those details. $239 does not include tax, tags, registration, title, dealer fees (my dealer does not charge a fee).
     
  9. Dec 13, 2012 at 7:44 PM
    #9
    rab89

    rab89 Well-Known Member

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    I lease, and it works out really well!
     
  10. Dec 13, 2012 at 8:22 PM
    #10
    junkman

    junkman Well-Known Member

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    Financially speaking, leases are generally good only if you plan to drive the vehicle for a limited time, and the mileage allowance is a good fit for your driving habits. (you don't drive more than the limit or significantly less then the limit).

    The longer you own a vehicle the better off you are to buy. The point where buying is better than leasing is as short as 4 or 5 years. Many people think they will lease for the lower payment and then buy at the end of the lease, but when you actually get to that point, many find that they are stuck with a much higher payment then when they leased the car new.

    Example - you say $239/month plus for 39 months, then you would have $19,400 left to finance - say 60 months at 4%, or $357. So you will be paying for 99 months on this car. In month 99 you are going to pay $357.

    If you bought the car and got 2% financing of $26,000, you would be paying $456 for 60 months. By month 99, you have been paying $0 for 39 months.

    Often, when faced with that situation at the end of a lease, a buyer will decide to just lease another new vehicle, as it will be less than buying out the current vehicle.

    That is fine, but at the end of that 2nd lease, you still don't own the vehicle and will face the same situation again, whereas if you had just bought the first one, you would have paid it completely off before the 2nd lease was half done and have a 5 year old vehicle free and clear.

    Other potential negative issues with leasing are 1) can be hit with costs to repair fairly minor damage when you turn it in whereas if you owned it you may decide not to repair, 2) lack of freedome to modify your vehicle in any way, 3) limited mileage 4) risk of future financing if you decide to purchase at the later date.

    Just my opinion.
     
  11. Dec 13, 2012 at 8:34 PM
    #11
    Larry

    Larry Well-Known Member

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    239.00 X 39 = 9321.00 + 2399.00 = 11,720.00

    so almost 12 grand for 3.25 years.

    my 2010 cost me 5K for two years. Tacoma has great resale/trade value. If you can afford to buy...you may be better off.
     
  12. Dec 13, 2012 at 9:12 PM
    #12
    DR Da_da

    DR Da_da Infrequent Member

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    07SpeedwaySport and junkman both provided about the best advice I've ever seen on TW. Sages!
     
  13. Dec 14, 2012 at 6:34 AM
    #13
    1ToughTRD

    1ToughTRD Well-Known Member

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    Another option is to sell your lease before the end. As long as you lease a vehicle that holds its value well, and toyota trucks do, you can sell it out right or trade it in on another vehicle. I leased a Tundra in 08 for $359+/mo, residual was $17.5. At 35 months with 62K miles, I traded it in on a new truck. My dealer bought it off me for $23K. Doing the math, it only cost me $8990 to have the truck for 3 years.
     
  14. Dec 14, 2012 at 6:42 AM
    #14
    hetkind

    hetkind Well-Known Member

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    I don't know about your credit situation, but I bought mine two years ago, 4x4 access cab, six speed, v6, SR5 with 7k trade from a 07 Ram 1500ST and my five year payments are $350/month...

    If you can swing a five year note up front, you will do better.

    Howard
     
  15. Dec 14, 2012 at 7:30 AM
    #15
    junkman

    junkman Well-Known Member

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    Sometimes you come out better, particularly if it is short term but to know if this was better, you would have to calculate what you would have paid on a loan and what the payoff would have been
     
  16. Dec 14, 2012 at 7:35 AM
    #16
    Spitz Stang

    Spitz Stang Well-Known Member

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    Finance the LEV for 72 months? So your advice is to take 9 years to pay for his truck? Only someone who sells leases would make that recommendation.

    OP, as others here have said, leases work for a select group of people (low annual mileage, want new every 3 years). If you fall into one of these categories then a lease may be a good idea for you. Otherwise, I would look for an older used Tacoma that fits your budget. These trucks do hold their value, but they are also quite reliable as they age.
     
  17. Dec 14, 2012 at 8:03 AM
    #17
    junkman

    junkman Well-Known Member

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    Not only that, did you catch that 1) he would have to put another $2400 down and find a competitive rate - about 3% using his numbers. That rate may be available now but in 3 years the rate could be much higher.

    So his suggestion is a 6 year used car loan with another $2400 down at lease end. If you can find a rate of 3% in 2016 (big if) his numbers work
     
  18. Dec 14, 2012 at 10:53 AM
    #18
    aaronbuell

    aaronbuell Well-Known Member

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    I leased my 2009 then did the buy out after the 3 years was up. My lease payments were 350 a month if I did a regular lone the payments would have been close to 500.
     
  19. Dec 15, 2012 at 12:35 PM
    #19
    WinTheDay

    WinTheDay Active Member

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    I stretched it to 72 months to show him how to keep his payment the same. I wouldn't recommend it, but its always good to know your options.

    Also, its worth noting, that by the time his lease ends, the new Tacoma's should be out (3rd gen) and he'd probably want one of those anyways...So a lease might be perfect!

    Like I said earlier, its always nice to have options.

    Special edit note: for all the number crunchers out there who are calculating the total cost of the loan...on a 39 month lease, he will only make 38 payments. (your first month's payment comes out of the cash down, along with all fees associative).
     
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