Toyota Leasing ~ Swich to Finance?
 

Hey guys. I haven't dug any deeper other than starting this thread.

I'm familiar with leasing agreements and how generally the only way out of a lease is to pay out, or do a lease transfer.

However,
Is it possible to have Toyota allow me to change from a lease to finance with a penalty?

I'm only thinking this because when i store the car during the winter months I cannot take the car off insurance which is a bit annoying.

Anyways, not a big deal, but if there is someone who has done this I'm interested in hearing.

Are you going to be buying the car out at the end of the lease? If not, why bother storing the car? Also, you wouldn't be able to take the car off insurance if you're financing it either.

You know you could also call TFS up. They could give you an answer right away.

Yes, I will buyout at the end of the lease. It's the reason I'm taking care of it.

Wow really? Even if it's financed I still cannot take it off insurance? So the car has to be paid off then correct?
I never knew because my Subaru was paid off when i bought it so i never had these issues with insurance.

And yeah, haha, but thought i would ask on the forum first.

I believe that is correct, but it's all from hearsay. Logically, it makes sense since you have to have full coverage (as in collision and comprehensive) on a financed car. So, no fire and theft for you.

It's similar to back when I used to have a motorcycle. I paid for my premium month to month, because I wanted to cancel my insurance for the winter as well, but not only would it interrupt my "consecutive years of coverage", I'd also OWE the insurance company money. They later sent me an email, showing what my premium ACTUALLY cost per month, it worked out to pennies in the winter months, and the brunt of it (as in 150-350) was owed for the summer months.

Thanks for the explanation and quick reply :D

Confirmed: most lien-holders require insurance to be in place on the vehicle for the duration of your financing, or until paid off.

The vehicle is technically their asset, in your name, until it is paid off (which is why they have the right to repossess for non-payment). They do not want to risk you having THEIR asset stored in a garage, and the unlikely scenario of a fire or something like that destroys the asset. Who would reimburse if there's no insurance?

Ran into this a couple of years ago when I stored my BMW for (most of) the winter.

Unfortunately you can't take insurance off until you own the car. If TFS still owns it (financed or leased) you still have to have it covered. If you plan on buying it out at the end of your contract, I would just start setting aside extra cash every month now. Even if its an extra 150-200 a month, it all adds up. That said, I do believe you can finance the residual value of the car when the lease is up.

Well, now on second look, bad example. But, really the full coverage thing is there to protect you. Fire and theft doesn't cover as much as a full insurance policy would (I don't believe). So, I guess if you're going to buy it out at the end of the lease, it may be worth making that call anyways. You might end up being able to save some money?

This is usually correct; however be careful of them trying to pin you with an extravagant interest rate.

Thanks guys! Really appreciate all the information! :D

Yeah I should have mentioned that...

A dealership can finance the buyout from your current lease but Toyota financial wont allow you to switch so basically what the dealer would be doing is financing the remaining amount with a bank.

I dont know about other insurance but im on park insurance right now (insured from theft, fire, and vandalism.)

Varies from leasing/financing company. Leasing generally a no but I have experienced financing where it was allowed by the financing company.

Best to contact the leasong company directly. But if you do switch to financing you get used car finance rates which can kill the savings as a result.

I don't think you can take the insurance off completely as stated, but I have multiple friends that have park insurance throughout the winter to protect from some unforeseen event like a theft. Our neighbour uses it and he only pays like $45 a month on his 997 c2s...

also when you are financing a vehicle you can move to just fire and theft, But make very sure it doesn't leave its storage spot and your insurance company knows where it is being stored.
I am what's called a "high risk driver" and because I have a company vehicle I am not insuring a second vehicle so my insurance company will not allow me to move down to fire and theft while being stored until some of my tickets clear so depending on your driving record it would be good to check with your insurance company first if its available to you or not.

I would like to mention regarding off-season insurance, I also put it on fire and theft for the winter, since first year. At no point did my agent hestiate or warn me (they knew the car was financed).
What does TFS say? I didn't ask. If the car is parked in my garage and properly covered, why should they be concerned?
Its paid off, so no concern for me anymore, but its an interesting point.

Regarding financing, you got your answers, pretty much you are going to be paying out a lease, as soon as its over, you can re-finance it through dealership(bank) or just shop around on your own.

Yes the assumption I made was by take off insurance he meant road going and leaving basic fire and theft insurance which is a few dollars a month.

I forgot this is the internet. I'll move along.

Is the 911 financed? Most financing companies won't allow just fire/theft, even if the car is in storage.

As far as I know its a used car that is being financed since he was telling my dad about the surprisingly good interest rate he got for a used car. May depend fully on the specific financial company giving the loan, I could see parking the car in the winter a common thing for Porsche but less common for a company like Subaru/Toyota and so their policies may reflect that

and lol @Dango1 I thought he meant take off insurance completely!


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Late to the thread, but my thoughts anyway.
It is hit-and-miss with insurance companies and also dependent on the agent you're dealing with. Mine for example (RBC insurance) would not allow me to go on fire/theft without written consent from Toyota Financial services. Conversely I know someone else who was able to get it no problem with his discount brokerage. We both financed.
I don't think there is an explicit rule, more like internal policies they have to cover their asses.