Lease Equity

I don't think he meant keep the stock wheels ON THE TRUCK, just keep them somewhere so that you can throw them back on before the end of the lease.

 

Exactly. Why pay close to a grand on wheels that you would just be giving to the dealer at the end of lease, who could not care less about them.

 

Can't argue much with that. Other than, I'm an auto broker and do predominantly credit union leases. They always include gap. Imho, mfg leases are generally garbage. But, if the customer only cares about the payment, the MFG lease is typically cheaper.

 

I leased mine for the lower monthly payment as most do. Odds are I will keep it as I am modifing it and using it on trails. The positive equity is very true on Toyota trucks. My father has leased 2 Tacoma trucks and both had $4-5k in equity which he rolled into the new lease. If I get rid of mine it would be for a Tundra but waiting for a redesign if that happens. 9 of 10 of my mods are reversible just going to take a couple of days turning some wrenches. Odds are it may be better for me to buy the truck at the end and trade it if I don't want it.

 

Would it not be better to roll the equity at lease end into MSDs if one was to lease again from Toyota?

 

My mother is coming to this point on her Honda CRV. She has 10K miles and it's in cherry shape. I told her keep it but if she wants to go new, buy it and then sell it privately.

 

Some people want new cars every few years. Not sure buying and trading every year is really that much better than leasing in that case unless maybe you’re high mileage diver.

 

if you put down 5k on a Tacoma lease you probably already have equity in it or damn near close to it. That is considering you didn't roll like 4k into the lease.

 

GAP was included on my fiancées Nissan rogue she got last year.

 

In my mother's case, she definitely wants a newer vehicle constantly. She is on dialysis 3x/week and needs to just be able to get there reliably.

 

If your Toyota truck lease ends and you turn it in to the dealer, Would the dealer be honest and say “hey your truck is worth more, let us cut you an equity check?” Or would they just take the lease return quietly?

Does your dad do market research seeing what his truck is worth at end of leases , or does he have an honest dealer?

 

Lease equity is when the vehicle is worth more than the residual value. The residual value is what you can buy the vehicle for at the end of the lease.

 

Same thing happened to me. Put a good down payment on it, got totaled out, got my deposit back from the total and got into a new one

 

I understand what lease equity is. I also realize what residual is.

My question is the actual process.

As in if my lease is up in 24 months. Let’s say residual is 25k. When I go to Toyota to turn it in, so I ask dealer whats their trade In ? I go to car max to get value ?

My question is in practical life - how does one determine the equity - to roll into next lease as a down payment or take a check ?

Thanks

 

As the lesssee you have the right of first refusal...you would sell that option to a dealer. You would ask how much will you give me for my trade...if higher than the residual you get the difference.

 

What I do is research myself and negotiate what I believe my vehicle is worth. The exact same way you would with any vehicle you were looking to trade in at a dealership. You basically buy out your lease (so you own the vehicle) then trade it in on a new one at the same time. The positive equity would come off the price of the new one just the same as any other transaction, unless of course the new vehicle is worth less than your trade in amount, in which case yes,you'd get a cheque for the difference

 

Say your end of lease buyout is $27500... after 36 mos and 36k miles suppose you listed it online and sold it for 30k. You pay the 27500 and pocket the difference...
Unless you plan on buying out the lease at the end, doing anything other than selling it before the termination date is money down the drain.

 

Appreciate it
Makes sense

 

Thank you sir. Got it now

 

Yea it works the same as if you owned the vehicle outright or we’re buying it. The dealer treats it as a trade in as they are buying it off the leasing company for the payoff or residual value. Even with the high residual on Tacoma’s, you should still have some equity at the end of the lease. The one thing that most people are confused about is the money down on a lease, it in no way changes how much equity you will have in the vehicle. All money down does is lower your monthly payment, it will not decrease the payoff or residual.