Leasing 101

[DeeezNuuuts83]

Originally Posted by tibo.dlg

Question (for fun) : should I sue them for such a dishonest proposal?

No, because they didn't really do anything illegal. There isn't really grounds for a lawsuit for someone having OFFERED you a bad deal, much less roping you into one.

[thill]

Originally Posted by tibo.dlg

I would agree with that. My credit is not that bad (669), I am here in US on a 3 years visa, 2 years remaining so a 2 years lease would be perfect for me.

And so I visited 2 toyota scion dealership. We went with one on an approval process and the other one just gave me some estimate but nothing really serious.

The approval of got from Scion of Kirkland (WA) was absolutely hilarious.

They want $8000 down (yes, you read well, that is eight thousand US dollars), and then monthly payments would "only" be $330 per month for the remaining 23 months. total cost? $15920

Since the residual value of the car after 24 months is roughly $18500, capital reduction is (also roughly) $6500. From $6500 of capital reduction to the amazing $15920 they ask me for, the interest rate would be........

106.46% !

Of course I did not even bother and hanged up the phone, but still, it shows how ridiculous things can get and how careful we sometimes need to be (on this case it was pretty obvious though)

Question (for fun) : should I sue them for such a dishonest proposal?

Wow.. That is crazy.. An no, you cannot sue, but you just move on to the next dealer who wants your money.

$8k down on a lease with $330 a month payments.. Wow.. Crazy thing is you know there are suckers out there.

[dookie11]

I only read the OP, and it was so damn educational! Thanks ruskymx!

Now, to find out if the dealerships will allow leasing on this car, which I assume they should, right?

[civicdrivr]

I guess I should update:

My dealer said the residual was $16,1xx with a monthly payment of $410 not including taxes. Thats with a $1k down payment.

I financed the car over 60 months and pay $360 a month. Im happy with that.

[tibo.dlg]

Originally Posted by civicdrivr

I guess I should update:

My dealer said the residual was $16,1xx with a monthly payment of $410 not including taxes. Thats with a $1k down payment.

I financed the car over 60 months and pay $360 a month. Im happy with that.

It already sounds much more reasonnable than what I got.

For my 2 years lease, I will be expecting a ~$2000 down, then monthly payments around ~$300 tax included. If it's more it will probably not be worth it for me...

[civicdrivr]

Originally Posted by civicdrivr

I guess I should update:

My dealer said the residual was $16,1xx with a monthly payment of $410 not including taxes. Thats with a $1k down payment.

I financed the car over 60 months and pay $360 a month. Im happy with that.

Originally Posted by tibo.dlg

It already sounds much more reasonnable than what I got.

For my 2 years lease, I will be expecting a ~$2000 down, then monthly payments around ~$300 tax included. If it's more it will probably not be worth it for me...

Forgot to add, that was a 3 year lease with 15k miles per year. 12k miles per year wouldve saved a whopping $5 dollars a month.

[Anaxilus]

So I have a question. I've noticed quite a substantial difference in residual values between Toyota and other banks. At this point, the banks/CUs seem to give the best deal even w/ the lower residuals due to lower cap costs, fees, taxes, and other monkey business. So my question is, if I go to trade in a Toyota I leased from another institution, would I get the same residual value on a trade with Toyota that they gave to someone who leased directly from them? If both vehicles were identical in condition.

Also, how far off do residuals fluctuate from the original estimate at the start of a lease to its end? Do dealerships monkey around w/ this value variably or are they locked/fixed? Again, assuming no weird wear and tear issues.

[crash.1340]

This may or may not have been answered in the post, as I'm a little confused by all the jargon currently. Would it be cheaper to lease or buy? I know it may or may not be that cut-and-dry in the real world but Between financing and leasing, I'm not seeing much of a difference in pricing and was wondering if there was a way to figure out which would end up being cheaper at the end of 6 years? I know I'd be able to lease with reasonable payments then basically refi the residual amount and draw that over a longer time (but pay it off quickly) but I'm not sure if it would be easier or cheaper to just finance it for the full amount right off the bat. I highly, highly doubt I would get tired of it so turning it in or selling wouldn't be considered unless some freak accident happens and I lose my means of paying for the vehicle.

[tennisfreak]

1st rule of leasing is DONT DO IT.

Finance the car, if you cant afford the payment then dont get it. 9/10 times leasing is not the way to go.

[DeeezNuuuts83]

It's not a bad idea when it's a fairly common German car, particularly an audi or a BMWBMW

[Braces]

@Rusky ... question.

I've leased alot of cars for business reasons since the accounting is simpler. I've noticed that if I turn in a car (say Toyota) at the end of the lease and swap for another Toyota lease .... the dealership will often overlook excess mileage or additional wear and tear. It is possible they just add those costs to the next lease. My question is if I take my leased Toyota and swap for a Lexus. Will I still get some possible benefits since Lexus is essentially Toyota?

Thanks.

[ruskymx]

Originally Posted by crash.1340

This may or may not have been answered in the post, as I'm a little confused by all the jargon currently. Would it be cheaper to lease or buy? I know it may or may not be that cut-and-dry in the real world but Between financing and leasing, I'm not seeing much of a difference in pricing and was wondering if there was a way to figure out which would end up being cheaper at the end of 6 years? I know I'd be able to lease with reasonable payments then basically refi the residual amount and draw that over a longer time (but pay it off quickly) but I'm not sure if it would be easier or cheaper to just finance it for the full amount right off the bat. I highly, highly doubt I would get tired of it so turning it in or selling wouldn't be considered unless some freak accident happens and I lose my means of paying for the vehicle.

If you are keeping it long term, then leasing is not for you. Just finance it to start with. It will be cheaper in the long run.

Ruskymx

[ruskymx]

Originally Posted by tennisfreak

1st rule of leasing is DONT DO IT.

Finance the car, if you cant afford the payment then dont get it. 9/10 times leasing is not the way to go.

Not true. 30-35% of our sales are leases. Not all of those people are doing the wrong thing. Some, maybe, but definitely not as many as people think. Each persons situation is different.

I am a perfect example. I leased my frs June of 2012. My initial intentions were to lease another one if they changed in 2015 or buy mine out. (I have options). I have since been promoted and now get a demo so now my thinking is turn the car in and wait for the 2016 model and maybe lease that since I get a free car to drive from work. I may just not get anything and have no payments. I can also buy my lease out and start to mod it. Options, options, options! Now if I financed it in 2012 what are my options now. Sell it or keep paying a payment that would be $150 higher per month for 2-3 more years.

I am sooooo glad I leased mine two years ago

Originally Posted by Braces

@Rusky ... question.

I've leased alot of cars for business reasons since the accounting is simpler. I've noticed that if I turn in a car (say Toyota) at the end of the lease and swap for another Toyota lease .... the dealership will often overlook excess mileage or additional wear and tear. It is possible they just add those costs to the next lease. My question is if I take my leased Toyota and swap for a Lexus. Will I still get some possible benefits since Lexus is essentially Toyota?

Thanks.

If the new Lexus would be financed or leased through TFS, I'm sure they would work with you. It may take a phone call on your part but I bet they would waive disposition fee at least.

Ruskymx

[noobcake]

How lenient are companies to trade in leased vehicles for another early? I will give you an example, We leased a 2012 lancer and its been 2 years into the 4 year lease. Mitsubishi gave me a call if I wanted to trade my vehicle in early for something else, I denied, but thinking about it, I have 2 more years on my lease? Why would they want it back? will they just tack on the amount I owe towards a new vehicle such as a EVO? Should I wait one more year until I do decide to trade it in. I have done this with Honda in the past, but I just turned the vehicle in 3 months early instead of a year or two as long as I leased another vehicle from them it was ok.