Toyota Leasing ~ Swich to Finance?

[Mr.Impreza]

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.

[Cole]

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.

[Mr.Impreza]

Originally Posted by Cole

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.

[Cole]

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.

[Mr.Impreza]

Originally Posted by Cole

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

[SLVRSRFR]

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.

[D_Thissen]

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.

[Cole]

Originally Posted by Mr.Impreza

Thanks for the explanation and quick reply

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?

[SLVRSRFR]

Originally Posted by D_Thissen

That said, I do believe you can finance the residual value of the car when the lease is up.

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

[Mr.Impreza]

Thanks guys! Really appreciate all the information!

[D_Thissen]

Originally Posted by SLVRSRFR

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

Yeah I should have mentioned that...

[jamies31]

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.

[montum_81]

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

[Dango1]

Originally Posted by SLVRSRFR

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.

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.