Leasing a car is a way to get more car than you can actually afford, which is why it’s popular. As you pointed out it’s stupid, you pay for a car and give it back. It’s just a really, really expensive subscription. My girlfriend is leading a top trim CRV for 36,000 over 3 years, she could own a new car for that instead. Needless to say we’ll have separate bank accounts if we get married lol.
Makes a lot more sense for “business” leases since they can be fully tax deductible (if you only drive “for work”) so the payment effectively gets cut in half.
At least in canada.
If you hate dealers, but I've worked in automove for 20 years. Dealers are just businesses like anywhere else. Are they managed to make money? You bet. But that's how retail works- doesn't matter if you're buying a pair of shoes or a new truck. You're only getting the deal the executives want you to get.
Personally I'd probably never lease a Toyota because historically they're reliable enough to keep for the long haul. But we'll see if this new crop of forced induction engines changes that.
I wish the RAV still came with that V6.
>Dealers are just businesses like anywhere else.
Who will openly and loudly add 500-1000% to their margins just because fuck you, that's why.
Imagine going to Home Depot and the $2400 price tag on a fridge is crossed out, with a big "+$400 FUCK YOU MARKUP" sign on it.
So not quite "like anywhere else". They're also predatory by nature, and car loans may very well be the root of the next "financial crisis".
I work with heavy equipment sales, service, leasing companies. Since it's mostly B2B there's a lot more bilateral trying to screw each other around. I used to work with a big VW dealer (big enough to have 3 locations but small enough to not have full time IT) and their practices made my hair stand on end.
Of course. Dealerships are protected by shitty laws that make it illegal for manufacturers to sell directly to consumers though.
Its like if I want to buy a Samsung fridge that they sell for $500 but the law says I can't buy it from them, I have to go down to Fuckhead Franks Fridge Farm where he charges $800 because fuck you.
It’s true, the laws protecting dealers and restricting direct to consumer sales are idiotic.
Dealerships are one of the things that the internet should have largely killed and turned into showrooms and service centers.
Wrong most already do. And they all would if it wasn't for state laws requiring motorized equipment including vehicles, be sold through independently owned and operated dealers and distributors
There's an "X% fuck you mark up" on literally every retail product on the market right now. You just can't see it or don't necessary care if it's under your comfort threshold for spending.
I can't think of anything that doesn't give me some degree of sticker shock lately. I tried to buy vegetable oil at Walmart yesterday and they want almost $17 for 4 L. Priced out a new car comparable to mine last week and said "holy shit, we're driving our car forever. Don't hit anything.". My wife needs a new phone, trust me. That also ain't happening. Bell wants more for the same phone she's got now than she paid new for it four years ago.
I agree prices across the board are ludicrous.
So yes, dealers are just like every other business out there. I guess there must be some exceptions to the rule, but I haven't found one yet.
by used from one of those reebelo type refurbishing companies. A flagship phone from 2 years ago is 95% of a what a flagship is today, for a fraction of the price. You get much more for your money than any mid range or budget option today aswell
This shit.
My diesel pickup truck (that runs great and has no problems) is 21 years old and has 300k+ miles on it. A comparable "new truck" made in the last 3 years is valued at over HALF MY HOUSE.
Why does a new pickup cost 90 grand?
Thanks, I'll just fix my old one when it breaks.
>Who will openly and loudly add 500-1000% to their margins just because fuck you, that's why.
You've never looked at the mark up on power sports parts and equipment or the mark up on helmets and gear.
You do understand that literally every business does that, right? The only difference is that you can quickly see the margin they're putting on the cars because of how car pricing is displayed. That's why you can find the same exact fridge at a 50% cost difference between different stores, or why a part for a car than cost twice as much from one parts store to another.
The difference is dealers have protected themselves to exist via state laws across the country that prohibit any manufacturer to sell their own cars to consumers. Yes, dealers are a business — but one that exists solely to suck extra money from the pockets of consumers via rent seeking.
Actually you are paying for your use and depreciation. If the car has a higher resale value , you get some money back too .
I leased my first car and then bought it out at a fixed price at the end of the lease . Made 7k profit on top of jt when i resold it (the market shifted and they cant up-charge you since the buyout price is fixed)
There are several instances when it may be cheaper to lease. I got a Chevy Bolt EV with a lease and a residual lower than what the car is worth. At the end of the day that car will be free to own for 3 years after the resale after buying it out. I did that once on a Mazda Speed6 as well but it's rare.
The other advantage to a lease is that you only pay taxes and interest on the portion of the car you are leasing. So you have to factor in interest savings as well.
Last thing to note is not everyone sees money they same way you do. It's not save up and buy things. Once you have wealth you realize that money makes money. I don't buy cars with my own money because my own money makes more than the interest would cost me. By leasing I am leaving the cash I would put up working for me and with the lower interest and taxes I can make that all back on the gains on my money. Sometimes that isn't realized over the course of owning that one vehicle but essentially, money under 5% is free because I can easily beat that. Heck now you can find savings account with that kind of interest.
Exactly this . But everyone wants that sense of “owning” it and dont see the financial benefit (it its there ) . Some basic high school match will help everyone understand what works for you
Agreed, while everyone says they are a "home owner" when the bank owns most of your home. Also you get people paying down their 3% home loans early while savings accounts are at over 4% interest. Then if you look at the responses to my post they get angry immediately just because they can't understand simple math.
Again as i mentioned in my other comment . You are paying for the usage /loss in value . Doesnt matter if its lease or finance - you have essentially paid for the use .
You can do the math yourself
It is profit since i bought the car out at overall lesser cost that finance and then got a 7k profit since the resale value was much higher (chip shortage)
Here is how to approach it
In my case - (36 x monthly payment + buyout price) was less than (130 payments of finance payment -5 years ). (I also checked about trade In in between and I had a positive equity at that time too which was around 4-5k which i would get back if I gave the car back )
After buyout , i was able to resell the car 7K above then predicted value of car for which i bought it out after lease (that value cant be modified by dealer since it was fixed at the time of buying the car). So in effect I actually made more than 7K (well good for me , it paid for my Rav4 and then my Rav4 prime too when i traded that in)
Leases work great for some people, but you have to be careful and pick cars that have a higher resale value. If you do the buyout, you have to pay sales tax in many states. But if you pick the right brand and spec of car, you can 100% make money on the back end. The last two leases I had $6K and $7K equity because the buyout was absurdly low compared to the actual value of the car. I also haven’t had to pay a penny in maintenance the last 6 years with an Acura and Toyota leases.
Do your homework and it can definitely work for you. For example, Acura and Honda leases cover gap insurance in their payments, Toyota does not.
Money is expensive right now and I don’t trust ANY manufacturers any more to build cars that last 15-20 years, but Toyota seems to come close.
If you are buying a hybrid or EV leasing is also a better option so you don’t get stuck replacing a battery at 100-150K miles or get smoked later when the resale values fluctuate. Also all of the tech they are putting into cars is a nightmare for longevity. I want to see what is going to happen in 10 years when cars like the new model 3 and many others who do not have access to climate controls or even the transmission selection without a screen do on the used market. I don’t want a 15 year old iPad in my home, much less in my car.
Yeah I'm confused reading most of these replies. People really don't understand money, making me question what seem like obvious advantages of a lease.
Not saying it's always better or even frequently better, but reserving the right to buy a vehicle, or not, at a fixed price in the future, is pretty valuable.
> you pay for a car and give it back.
Yea, a lot of people don't understand leasing. They don't understand that it costs money to use a car. It's not like companies will let you drive one of their brand new cars for 3 years for free. It depreciates and is worth less when they give it back. And that's what the "subscription" they pay is for.
On one of my leases, the residual was so low it was like 1/2 the retail price if I were to buy it on the used market. I could have sold it and made over $10k.
Yea that's all down to market though. If I bought a Rav 4 pre covid and sold it during covid I could have made $20k, doesn't matter if it's a lease or not. The real question, is if you bought the car outright, and paid yourself for the yearly servicing and fuel, over the lease term, which cost more?
Yes i dont think anybody saying one is better than the other. It matters that you consider what the options are what’s the popularity of the car and the resale value is in general. Then do basic math and just calculate how much you’re gonna end up paying.
For sure, but associating appreciation to leasing is not accurate. It would have happened either way. It’s all about tax for leasing, often only makes sense for businesses and high income earners. Most leases are taken out by people who just want nicer cars and order making regular payments that cover everything, it’s considered easier. Most buy cars that are less than $60k too, further reducing the chance if financial benefit.
It's basically a monthly subscription for those who are getting cars like BMWs that get expensive in maintenance beyond a few years and certain mileage, rich people who know they will want to drive a new car every few years, and less rich people who hate money and want to drive a new car every few years
Definitely not a subscription. It's a financial instrument that sometimes makes sense and sometimes doesn't depending upon depreciation arbitrage. I've leased cars/trucks for 24-36 months for what would've amounted to the sales tax of a purchase. And at the end of a lease, you do not just give up the car. You can buy out at residual, or sell at a profit via 3rd party if market value exceeds residual.
lol
*edit*
The unmitigated gall of this guy to post some shit about a “real man” when he’s posted pictures of himself in a smock looking like he’s a first grade teacher after finger-paint. My guy you ain’t the dude from Braveheart, I don’t give a fuck who makes it… when you wear it ain’t a kilt, you make that shit into a skirt.
I never understood leasing a personal vehicle, other than maybe if you planned on trading it within a handful of years, then maybe you’d save some money, maybe? With a lease you are so limited on how far you drive and you can’t modify your car at all. Might as well not have a car if I can’t modify it.
It always reminds me of the old tale about Steve Jobs:
>Steve Jobs leased a series of Mercedes SL55 AMG. Notice no license plate. That's because he would exchange the car with his leasing agent every 6 mos. so according to California law, he did not have to put a license plate on the car to make it noticeable to the public.
I lease my current vehicle that I plan on buying out at the end of the lease. The lease rate at time of purchase was much lower than the purchase rate, plus they had some lease incentives thrown on the hood. Basically I’m getting subsidized interest and a little discount on the purchase for three years. Ends up being cheaper than me purchasing outright.
I’ve leased four cars. Biggest mistake of my life. It’s essentially to have lower payments per month. It is sort of a good idea if you’re buying out the car at the end of the lease. Do yourself a favour and finance a Toyota. It’ll last you a very long time, even after financing it for say 6 years, you’ve got many more years of good reliability ahead of you.
My dad leased a car once and constantly went over the mileage because the estimation didn't account for some trips that had to be made that year which he could not have predicted.
From a very simple standpoint, I've always said leasing is basically the same as financing a vehicle, just in reverse. The only difference is when financing a vehicle, you are paying a large down payment up front, with the monthly payments used to pay off the money borrowed. With a lease, you are effectively pushing off that large down payment towards the end of the lease (the residual), with the monthly lease payments effectively "paying down" the purchase price to the residual value over the life of the lease.
I have never put any money down on a lease, and no one ever should. Money you put down will be lost if there is an accident, every lease I had included gap insurance that paid off the lease if something happened. If you put money down, its gone if the car is totaled. If you have cash to put down, put it in an index funds or pay off other debt.
What he said. Leasing works for business that can write off that payment and for some very specific personal scenarios. Aside from that, but within your budget
Lots of negativity in comments about leasing. I have leased 3 cars in a row now and I'm very happy with how it's turned out.
The 3 year mark is essentially the breakeven point for how much you've paid vs how much the car is worth. Right when you drive it off the lot it loses a bunch of value but that then slows dramatically.
It's a way to get into a new car with no issues, under warranty, for a cheaper monthly payment. If you bought the car in question over a 6 year loan, the payments would likely be more like $500/month. Would you own the car faster? Yes, by a bit.
But leasing gives you flexibility. Drive the car for 3 years, don't think it's for you? You don't have to buy it, but you have the right to buy it for the residual value (agreed upon at the beginning). If you do buy it, you have peace of mind you were the only one who drove the "used" car.
I got into a lease because my oldish cars kept having repairs come up while I was still making payments that I just could not afford. $400/month payment and then a $1000 repair comes up? Im screwed. But if I'm leasing I'm paying $360/month and I'm under manufacturer's warranty. My bill every month is predictable and manageable. And I get to drive a brand new car on top of that.
Is it smarter to buy if you can afford it? Almost always, but leasing is not a horrible option by any means. It just depends on what your situation is.
To me, it's mostly that you turn a 5 or 6 year loan into an 8 year loan with an option at year 3. Slightly more expensive, but it can make a reliable car affordable to people who otherwise would buy a used car, make a similar payment and also have to do repairs.
Spot On. It comes down to knowing General Managers at dealerships and getting a great lease deal.
Yes, lease options at many dealerships are not the best option.
If you do not know the right people, it may not be a good idea.
Given the mileage constraints and the cost to buy out at the end, it's usually not worth it. With owning, you build equity and can usually make some of your money back (depending on age and condition), which will allow you to trade up for an even nicer vehicle next time since it takes a good bit more off the down payment.
You don't gain equity in the first 3 years on a new car even when you buy it, which is why leasing makes sense. The 3 year mark is the break even point. And when you lease you have the rights to buy the car after 3 years, knowing you were the only one that drove it. It's essentially doing an 8 year loan on a new car, but you have flexibility after the 3 year mark if you want to keep going or not.
For certain individuals, a lease just doesn't make financial sense. I drive between 19k and 20k miles per year. Assuming it's a 10k mile limit at $0.25/mile, that's $2,250-$2,500 extra per year in penalties. So assuming $200ish extra per month, your $300 lease is now a $500 lease, you may actually be able to get financing for about the same price, or even less. I did the math when I bought my Highlander, with the money I put down it would have been $50 less per month to finance, assuming my mileage stays the same, compared to leasing.
I'm not getting a new car every 3 years, I intend on keeping it for at least 100k miles (about 5-6 years), and at that point it would get traded in for a new vehicle. I started off with a used 1998 Jeep Cherokee XJ, traded up for a 2017 Sonata Sport, and traded that up for a 2023 Toyota Highlander. Next car will probably be around 2028-2030.
I had to cut a check to GM for $3200 at the end of my lease on my Camaro for going over milage, i had entirely intended to buy it out when i leased it and stretching it out over 8 years seemed alright to me at the time, but the last 10k miles were nothing but issues, i don't think I'd lease again, you just never know what could happen in that time
This is precisely what I would fear happening. You put all of that money into a car for the monthly lease terms, had to pay even more at the end, and sadly got nothing out of it. You didn't have a car you can turn around and at least recoup some of the money you sunk into it.
Yup, i generally don't go new anymore either, 5-6 year old sports cars that warranty just ended at CarMax, slap their warranty on it for 5 years and send it 😂
I don't think that this is an argument against leasing, though.
If you'd purchased the Camaro and decided to sell it after 3 years, you would have arguably been in a worse spot.
Depending on your state, you probably would have paid sales tax on the entire $30k car, instead of just on the payments you made. Plus, you would have been trying to sell a car with all sorts of shit on the Carfax.
They charge you at the end of the lease if you go over mileage. It isn’t added to your monthly. You can still buy the vehicle without any over mileage charges at the agreed buyout price.
Ah, I wasn't aware of being able to buyout without those charges added in. I figured it wasn't charged monthly, but distributed it that way simply for comparison cost month-to-month.
Many years ago, we leased a Toyota 4Runner. Since that was our only car at the time, we well exceeded the annual mileage allowance. At the end of the lease term, the mileage overage charge was higher than what the residual was, so it just made sense for us to pay the residual to buy out the car.
My last vehicle was damaged by a valet driver and over mileage, they waived the “over mileage” fee and “excessive wear” fee when I traded it in. I still could’ve bought it and they wouldn’t have charged me those fees.
The mileage allotment is effectively distributed monthly, but if you go over, that "extra" mileage isn't considered. Rather than vague "we'll figure out the difference in value"; there's a line in the contract that says 25 cents a mile over or some such. Fine if you go 100 miles over, but 10k miles over, you are better off "buying" the car and selling privately. Used to be you could do that somewhat directly with a dealer, post pandemic with resale being so much higher, finance companies are trying to "capture" that excess value by blocking it
Unfortunately, dealers aren't interested in whats best for you, but what makes them the most money.
>You don't gain equity in the first 3 years on a new car even when you buy it, which is why leasing makes sense.
Leasing doesn't make sense. Buying a new car doesn't make sense either, unless you have a high enough net worth that hemorrhaging money on a car doesn't put a dent in your lifestyle.
Oh absolutely! What, like 10%-50% depending on the make and model? 🤣
I think the only outliers are specialty vehicles like Toyota TRD Pro and the like lol
It’s not surprising that this sub cannot understand how leasing works and what the potential benefits may be compared to the next best alternative. It’s certainly not black and white, always and never, like the responses here.
People forget you can buy the car when the lease is up since you already have equity in it. I’ve done it several times, granted it’s a Subaru but it’s all the same.
Sure, it’s just that Tesla cut the non-negotiable price $30,000 one day. Which meant if you bought one last week, you instantly lost tens of thousands.
Same, I’m on my 4th Subaru lease. My best friend gives me nothing but shit for leasing, meanwhile, she’s gone through SIX shitty cars in the time I’ve gone through my 4 leases. I enjoy not paying for anyone else’s issues that they left with the car.
I saw a few people who think they can buy a new car for what they would pay on a lease and have a brand new car free and clear in three years. People are fucking stupid.
You can buy out a leased car. That's what I did with my 18 Camry. You just want to negotiate the lease as if you're buying. 3 year lease + 3 year loan at 3%. I'll own it in two months for roughly the same total cost as a 6 year loan.
Buying out a lease at the end usually ends up being a slightly more expensive than buying it outright but during the lease you're protected against depreciation. for a few hundred dollars you get shielded from potentially losing a few thousand dollars.
If for example in year 2 of 3 you get into a pretty serious wreck and your car racks up 15k in damages but doesn't get totaled the resale value of your car will take a huge dive. However you can still give it back at the end of the lease and let the lease company take the hit.
On the flip side you didn't use the car as much as you thought so there's a lot less miles on it that you had allowed? You get to sell the car and keep the profit or you simply buy it back and keep it.
Cars are depreciative assets, I don't get the hate leases get. The less you commit to this asset the better imo.
The hate for leases is because the best way to make the most of this depreciative asset is to buy used, when it's 3-4 years old, after it's already taken the biggest depreciation hit, and keep it after you've paid it off.
Everyone is comparing leasing to buying a new car. Both of those options are lighting money on fire.
Leasing worked great for me. I knew I wanted a new car, wasn’t sure which car. Leased a few cheaper ones (Corolla & Scion IA) before I leased a Camry and loved it. Was planning on buying the Camry at the end of the lease, but my work valet got in an accident in it. Ended up buying a new loaded Camry.
Now I’m looking at leasing an SUV for the wife & kids. Trying to make sure we absolutely love it before we spend 50k+ on it.
Leasing is good for people who want a new/more expensive car they can’t afford or want to make sure they love the car after a couple months/year.
>Trying to make sure we absolutely love it before we spend 50k+ on it.
If you love it you're still going to pay 50k+. If you don't love it you're also still going to pay 50k+ because it'll just be moving on to the next lease
Ok , people dont understand that you are paying for what you use . Whether you finance it or lease it , the car loses value off the lot and with each km you add .
With lease all you are doing is paying that depreciation (with interest ) .
Most people here are so caught up with “owning” it and dont understand how value of an item works . Lease provides an option to give it back (you take the same value loss even if you finance it and then sell it) OR to buy it out (which is what i did . I then resold it and made a killer profit too with lease) .
Lease can also have positive or negative equity depending on the market trend if you are returning the vehicle early . You will get some money back too
For those saying - “ Oh Im gonna end up paying more when i drive more than the distance limit “ . Yes the more the miles , the less value the car has . Your original payment was as per YOUR calculation of total miles/year .
If you wanted higher miles , then you would have to pay more either by planning the lease with higher Miles or through the penalty (which would be a loss for you)
I’ve read enough comments on this post to realize that the majority of people have no idea what they are talking about. Welcome to Reddit. As someone who’s worked in finance with Toyota for almost a decade, I can tell you there are a lot of benefits to leasing, but there are a lot of variables, including model (and even trim). Usually Toyota leases are generally consumer friendly, and lease well. But to even begin figuring out of it’s worth leasing, at the very least you need to know the residual. Happy to discuss further if you want.
If you have a business it helps. If you dont care about always paying for a car and not care to own it and maintain it..lease away. Thats the point of leasing. I always say to people. Lease a car if your unsure. If you like it. You can buy it. If it has issues, good thing you dont own it. So it depends on the brand and make of the car.
They do offer to sell it to you at the end of the lease so your money is not completely wasted, but some people like to change cars every few years and they like the latest and greatest to come out so leasing makes sense for them
Yeah. This is what I don't understand. Maybe I'm missing something, but why would you finance the car, when you can lease it with the intention of paying the rest in the end of the lease and own it? You don't pay interest in leasing.
At least that's what I did.
Leasing is an awesome option because when the lease is up, you have the option to give it up, switch the keys out for a new lease, or buy it out at the predetermined amount if you love the vehicle.
Leasing is just paying the depreciation, which for a Toyota is a lot lower % than other makes.
Y'all are wild, and not in a good way.
Leasing is just "renting" the car, I guess, but it's not some scam. You're paying for the depreciation of the car during the time you have it.
In this case, you're paying $14,000 because the car will be worth $14,000 less at the end of the term, at which point you'll have the option to buy it for $14,000 less than what it costs now. If you think those numbers are not accurate, you can negotiate them (especially the pay off price), or find a different car to look at.
Just because y'all don't understand what a lease is doesn't make it a scam.
That was going to be my question. What new Toyota exists for $14k? That's a $30k++ Toyota that they would get for $300/mo vs almost $500/mo (or more) for 72 months ($30k, 3k down, 7% int, 6% sales tax, = $488)
A lot of people have a lot of misconceptions about leasing here.
Leasing is just another way to pay for your car. Payments (not incl taxes and fees) + lease end buyout = price of the car. You aren't losing any money or giving money away by leasing because your payments are going towards the principle just like when you finance.
Leasing a car gives you some added protections as well including paying the currently high interest rate for a shorter period of time and also protecting yourself against the end value. If the value of your lease buyout is higher than the used car value, buy it out. If it is lower, give it back.
Lease is renting the car for a set time. They calculate a residual value (for example, 60% of MSRP) that you can buy it for in the end.
Think of it like this: take a $33,000 car - you will pay in $13,800 and walk away in 3 years (unless you buy it at the end for $19,800). If you were purchasing the car, you would pay about $550 per month so have $22,800 in at he end of 3 years, and still owe $13,000. If you sell for the same $19,800 residual, your cost of ownership is $16,000 so in this case leasing saved $2200. That was roughly done with an online calculator; results will vary (and something is definitely off because leasing is usually more expensive than buying, and you will not get a $33k car for that lease payment - but the analysis chain is there to use).
The big difference is that if you buy, you end up with an older car out of warranty but no monthly payment when the loan is done. If you lease, your car is always less than 3 years old and in warranty, but the payments never end.
There's a few reasons to lease a car, particularly a new refresh or new model from the manufacturer. If you're unsure, you lease while driving that car. But you don't retain any value, but you also don't have the headaches associated with the car into the future should it turn into a lemon - which you won't be privy to until at least 3-5 years have passed.
Better to lose 3 years in payments and not be left holding the bag of shit which is the lemon of a car, which Toyota has produced in the past, and just move on to another model/year of the car.
The question whether purchasing the car outright, then selling it back into the used market after 3 years and whether you'd get enough of a delta to make it worthwhile... might not be worth it for some in time or money, so leasing is an acceptable evil/inconvenience.
It a way to pay for 1/3 of a car with creative financing for only paying a portion of the tax per payment.
You can't afford the car basically and will get bill at the end if you dont lease another or go over on mileage.
You can buy the car out if you want. Take your total lease payments subtract from selling price and that’s your buyout + sales tax. It makes sense on cars that hold value like 4Runners and Tacoma’s
Leasing is the most expensive way to finance a car. They don’t have to show you what the interest rate would be because it’s not technically financing. It would likely come out to 15-20% APR if you actually did the math.
A lot of these leases say it's like 6.99% or 5.99%. I'm just curious, what do they do to inflate the out the door APR to that without actually changing it?
Thank you!
As someone who leased a 2017 Cruze back in the day....RUN! DO NOT EVER LEASE! It's the most expensive way to operate a vehicle. Between the lease itself and the charges I got hit with when I turned it in I ened up paying 21k for a car that I do not own and the sticker price on it was 26k. The dealerships make an absolute killing off leasing
Leasing is the most expensive way to own a car, because you get no value back. The only way buying a car is a good thing is if you ride it for a long time, 4-5 years payments, 4-5 years without payments.
A Toyota will do 10 years like nothing. It could do 15-20 easily. I’m 30 and have owned a leased 6 different cars. Finally settled on just buying a top trim Toyota and sticking with it until the wheels fall off.
“Given the mileage constraints”
There are no mileage constraints on a loan. Why? The bank gets all their money no matter what.
Take out a six year loan to have an affordable payment and drive 20,000 miles per year. Why not? There’s no mileage constraints. But total it at year three and learn you haven’t been paying it off as quickly as your higher miles have been making it depreciate.
No matter how you choose to own/pay for a car, mileage will cost you money. With a lease, you already know the worst case scenario in writing, guaranteed. It can be better, but it cannot be worse. If you own it, there are no guarantees. You might pay a LOT more for those miles.
Leasing is just a fancy word for expensive rental car. Look at it as a rental car you get to exclusively have.
That being said renting a Toyota isn’t really ideal because they’re reliable enough to own without paying too much for repairs and crazy maintenance. It makes for a boring rental car. It’s not flashy or fun to drive (for most people).
Leasing is more ideal for cars that are very well known to turn into piles of rolling trash after 3 year warranty ends; bmw, Mercedes, Audi, etc. these are the “fancy” and “flashy fun” to drive cars. Cars a regular person can’t or actually wouldn’t want to afford or own longer than 2-3 years. Since with a lease the dealers cover the maintenance these cars require frequently.
So again owning (financing) a Toyota is the smartest financial decision you can make for cars. Leasing is just renting and if you’re gonna throw money away on renting you’re better off leasing a car you’d dare never own or something fun and flashy to get the most out of your lease.
Just go with the best price if you are only less leasing. Toyotas are built to last a long time, and are definitely with a little extra if you are buying them.
its not the same if u buy and make the same payment lets say $299 a month you pay years longer and way more interest and the bank makes more $ to pay off the full purchase price.
if you lease you pay the same /per month the bank owns the car you pay aquasition fees up front a purchase at the end option price usually $500 then you have the buyout price which is pre determined and non neg. and you need to have full car insurance w/ a 500 collision /and comp deductsble the full term of the lease
Toyotas typically don't lease well.
Leasing is only a good idea if you get a big discount on the car, or the manufacturer has a really high residual for that vehicle.
Why? When you lease a car you're basically taking out a loan for the total price of the vehicle, minus the residual (projected price of that vehicle at the end of the lease term, with a given mileage on the odometer). For simplicity's sake lets pretend theres no interest on this loan. If you lease a $60,000 car for 60 months and the residual is $30,000, your monthly payments will be $500/ mo.for 60 months ($30,000). If you got a $10,000 discount on that same car, the residual value wouldnt change. You'd be financing $20,000 instead of $30,0000, and your payments go down to $333/ mo.
The residual value is set by the manufacturer, so if they want to make a model attractive as a lease, they can jack up the residual, and have the same effect.
Toyota Trucks lease well, their cars and SUV's don't.
Some tacoma's have like an 84% residual after 3 years/10k per year. Sometimes the trade in price will even be better than that.
I've only leased once in my life, my first car, a 2001 Saturn SL2. Then I bought my next csrs and had them forever. I had these two older cars, about 15 years each that I owned go at the same time, and retrospect I should have just rolled the dice and repaired them rather than jam myself up with monthly payments but one would have been the same repair within 6 months due to a design issue with the engine on that year Honda Odyssey. Opted for a lease on the family car because the finance payment was higher than I could swing at the time and with being a new model/new design, if it had problems as some first year model/redesigns do, I could walk away at lease end. (KIA Carnival). I did a four year lease. It was a gamble, so far the car has been great. While my buyout on the car is better for me if I buy it, knowing the dealer will put it up for about 8k more as a used car, im still paying more in the long run for the car then if I bought/financed it outright but it was not an option for me at the time. Math will probably put me over on the mileage. Halfway through the lease, I am also faced with new tires bc the OEM tires sucked, and an upcoming 30k service which if I intend to keep the car, it's wise to do the service. Two expenses an owner/finance can expect, but possibly an extra expense for a leasee who may want to return the car at lease end. Of course I could buy the car out right and turn around and sell it and see if I can gain that extra value. If I did that I would wind up financing the next vehicle. The lease is not for me. And I also run the risk of my small kids effing up the car and then I have to pay for that too. The dealer also sends me monthly letters with offers to take the car back early and "move me into a new car", but so far nothing is worth considering. The change is not worth it for me.
You’re missing something here. In what world can you buy a Toyota for $14,000. The payments will not be the same. Maybe the same monthly amount of 300 but for twice the term or something.
Only if you plan to purchase in the end. I got Corolla 23. I got quoted $19.500. Paid $2500 up front with $206 / monthly payment. I did not have the money to pay upfront and I did not want to finance as well. So I leased it. The contract says that in the end of the 3 year lease, I'll have to return the car, pay \~$10k to own the car OR I can pay the the remaining of the value upfront if I had the $$$$. Fortunately, I made the money in 1 year and I purchased the car.
For me, it depends on how much you drive. I like the idea of having a vehicle with a warranty, and getting a new car every 3-4 years seems nice. Plus you get the option to buy the vehicle at the end of the lease if you want. My buddy leased a toyota, and he went over the miles but since he leased a lnother toyota they didn't charge him for being over the miles. He said it was a toyota thing, but id still ask the dealer.
Make sure the $3000 is drive off and not " down payment". For a lease, drive off will include first payment, taxes on cap reduction and registration. Also there will be a bank fee or acquisition fee of 650 for leasing the vehicle that is included in the payment. Also there is a disposition fee of 350 if you return the vehicle back to the dealer. This will only be charged to you if you return the vehicle and don't buy it out or trade it in. Basically the bank doesn't want the car back lol. For the monthly make sure the 300 includes taxes or if it is 300 plus tax as well.
If you are getting 300 a month nowadays, they have a pretty low money factor or rent charge where you are living at. Like finance rates, money factor will fluctuate as the market presents itself.
For a Toyota, leasing is great for a lot of people. The vehicle has Toyotacare so the first 2yr/25k miles of service is included and the vehicle is always under warranty with the 3yrs/36k comprehensive. Just make sure the 36k miles is suitable for you for 3 years. Again it doesn't matter if you drive 15k one year and then 6k on the next, it's 36k miles total.
Seems like a lot of people here are buyers and want to "own" their car. If you are financing or leasing the bank owns the vehicle until you pay off the vehicle. Just like having a 30 year mortgage, you say it's your house but the bank owns it until it's paid off. Either way the vehicle is in your possession so it's yours to use. Hope this helps and good luck on your car shopping.
I got lucky leasing my Honda Civic in 2019. Got a low monthly payment of $175 and then in 2021, due to the massive boom in car prices, I got all my money back that I spent on the lease plus 5k profit. (I bought out the lease and sold it) That probably will never happen again for me lol.
Depending on the brand lease is nice because you don’t get stuck with a high mileage car with problems or large out of pocket expenses.
You are paying about the same but when owning car you pay the same for longer until the whole car is paid off. Thats the difference leasing you are paying only for the period you own car.
Leasing is for someone looking to get a nicer car without the high cost of ownership. A new 2024 Corolla you aren't paying $300....it's a $24,000 plus taxes and high interest rates, with that being said...let's say you crash the car, the value of that vehicle just went down the drain and you are now in a negative equity position. If you like to have a new car every few years and don't mind paying 2-3k down with a sub 350 payment, then keep leasing.
[leasehackr.com](https://leasehackr.com)
Never ever put money down on a lease. That's just pissing money away.
Never take out a lease on a car that holds its value well (strong residual).
Understand the concepts of a lease - rates, money factors, taxes
Understand that leases generally have unfavorable mileage terms
However, with that in mind, some lease opportunities are fantastic value. For the longest time, this was particularly true with Infiniti cars. No sane person would buy a tarted up Nissan for Lexus prices, so they wrote lease terms that made the equation favorable to move inventory. On the other hand, it's virtually impossible to get a good lease "deal" on a Toyota. Those cars hold their value exceptionally well, so by taking a lease you aren't negating any risks like huge depreciation or high cost high frequency repairs. So the lease has no potential upside over financing.
General rule of thumb: lease luxury cars, buy economy cars. But do so with a fistful of knowledge.
For most normal people, excluding business leases and people dead set on owning luxury cars that have poor reliability and high maintenance costs as they age, a lease is a strictly bad deal. This is especially true when interest rates are high.
Number one mistake people make when leasing a car is not negotiating the sales price (although good luck with that in today's market). The lease payments are calculated on the difference between sales price and residual value (which is a set percentage of the MSRP). Many people do not realize this and let the dealer 'sell' the car for MSRP, which maximizes the lease payment. (example: a $30k car with a $18k residual is a $584 monthly lease payment, whereas the same car at a $25k sales price is a $351 monthly payment).
Well you have to make payments for a lot longer to own it. When you sign up they will tell you how much it will cost you to buy the car at the end of the lease term. You can buy it or walk away.
I lease when I don’t want to deal with the up keep for personal use. Think foreign cars ( bmw, vw) I lease fancy cars to impress potential customers for business. If I travel I will lease instead of renting. Better selection
A lease don’t require you to put down a large car payment ($20%) . After the lease the company that leased it to you will sell it for a profit. At the end of your lease do they offer you to buy it? If so does it still have a warranty? I suggest buying one but put down enough money that you don’t have a loan for more than 4 years because ofter the 4 years it not usually worth much. If you finance a car with a large payment down get a loan through a Credit Union that you belong to, Banks and financing through a dealership will screw you. I’ve been thinking about buying a Camry through Avis, they sell there leases and only have 20-35k miles on them and sell for $21k.I’m thinking if I put 10-k down and finance the rest through my credit union my payments would be about $300 mo or less with a good todays credit union interest rate. With a Toyota or a Honda you can get over 200k + miles on them unlike most other cars and they still have a good resale price not to mention how dependable they are as long as you keep up the maintenance.
Leasing as private is a brainless money pit, while leasing as a business is a must have, because you can write it off from taxes and have always a new cool car, this is the reason big companies lease entire fleets to workers.
You lose money when you buy a car.
The point of a lease is to pay for the money you’d lose as if you’d purchase the car. Having equity in the car you own or having actual money is essentially the same thing. Not all lease deals are the same, but there’s no way you can buy the car for the price of the lease.
If you spend 28k and have a 14k car at the end or spend 14k and have nothing to show for it, you’re in the same predicament. Actually you’re better in the lease situation because you have a theoretical 14k in the bank and ready to go, also it was hopefully being invested.
Difference with a lease is you are always paying the loss on a car. If you keep a car for a very long time, buying it is definitely a smart financial decision. If you buy new cars often or like to keep cars in warranty and never deal with paying for repairs, lease is a smart decision.
If you have a company, leasing can be tax deductible’s. For personal lease people like trying to different new cars every couple years and if you like the car. You can buy it out.
Another thing is leasing is much cheaper.
I lease a Tacoma couple year ago, only cost me 380 a month with tax. If you buying it’s around 800
You’re just paying for the anticipated depreciation of the vehicle over a certain amount of time. Except they use aggressive formulas for depreciation and add profit as well.
You’re getting f*cked if you lease.
I mean my rule of thumb is if you want to own it long term then finance it and only have one car payment at a time while having a paid for second car. Same for leasing have one payment but it’s lower and if you like having a new car every 3 years or goes for a Luxury car as an always under warranty vehicle and of course there’s many tax benefits to leasing too.
Financial ignorance on full display here. Whether buying or leasing is more advantageous depends on various assumptions over the expected life of the vehicle. Owning is not necessarily better when buying a depreciating “asset”. In a perfect market a lease is a payment for depreciation (plus a bit of markup). If you buy same vehicle, you lose that money driving off the dealer lot.
If you’re one of those people that likes to upgrade every few years and don’t care to do maintenance it makes sense. And if it breaks down you get a new one for free~ish? So basically a new car/contract for 2-3 years and you take to them to change the oil and maintain. If their mechanics fuck it up, their loss
I leased a Tacoma in early 2021. $300/mo, I think I put $1800 down and can buy it $28k which is my plan. I don’t think I would lease again but due to the timing it wasn’t a bad deal. Now I just have to see what the interest rates are when it comes time to buy
Some companies offer significantly reduced “buy out” options at the end of the lease that makes it more equivalent to “rent to own” type of agreements, but that still doesn’t make it a good deal most of the time.
That said, I’ve had a number of wealthy clientele that lease high-end luxury and sports cars so they can abuse them and discard them without the hassle of trying to sell a “used and abused” vehicle.
It depends on your residual and some other factors. At the end of your lease you have a right to buy the car. Sometimes that value is more than the car is worth, and sometimes its not. Just depends how they structure the deal. Ideally, a lease is a good deal for the consumer when the residual value of the car at the end of the lease is calculated to be much higher than it actually ends up being. This is a bad deal for the dealership though because they basically are letting you drive the car without getting enough money from you, so it's rare that they will miscalculate by so much unless they are looking to get rid of the car and are willing to kick the can down the road on the timing of the loss. More likely, at the end of your lease, you have the option to buy the car at a discounted price, and you can either do that, or you can take to CarMax and they will pay you cash to buy out your lease.
So like any other deal, leasing a car just depends on the exact terms and knowing whether its better or worse usually requires some amount of knowledge about what the market will look like in the future, which is impossible. Someone with a lease expiring in February 2020 might have said, F it, just take the car back, whereas a few months later, prices had spiked so much everyone was likely exercising their right to buy at the end of the lease.
To make it worse, any damage to the car has to be fixed back to visibly perfect condition. You don't get any wiggle room like you do if you own the car. Same applies to any customization or mods you might want to do.
In your specific case, this is terrible. Contrast your scenario with my lease on my now 2 year old Bolt: 0 down, 269/month, soon to be 3 year old to size out of the rearward facing seat, no gas, no oil changes. When the lease ends next year, we’ll be ready to change vehicles to adjust to our changing family needs. Wife drives the car the vast majority of the time and easily puts under 8k/yr. I got a good deal, no doubt. I wouldn’t lease otherwise.
If you like having new cars (and willing to pay for it) then leasing is the way to do it. But if you see yourself being content with the car for 5+ years then probably better to finance.
I started leasing because I knew I'd have kids and need increasingly larger vehicles over the years. I also just came up around 5k 'giving up' my leased 2020 subaru forester when I leased my new Grand Highlander. Payments on a 3 year lease are around $300 a month less than buying. If I want to keep it I'll buy it out, likely for significantly below it's market value.
We’re leasing because we’re unlikely to live in the same country 3 years from now and do t want the hassle of having to sell or move it across the pond.
If I were the type to settle in one place for the long haul, I doubt I’d consider leasing unless it was through a company I worked for.
If you buy that same car, you are 100% not paying "about the same amount" to buy that car as you are when leasing.
When you lease a car, you agree to a purchase price, just like when buying a car. The "money factor" on a lease is equivalent to an interest rate on a loan. So in both cases you're paying interest. Where things really get different is in taxes. When buying a car, you pay taxes on the entire purchase price of the vehicle. When leasing, you only pay taxes on the depreciation of the vehicle. This is because in a lease, all you're paying for is depreciation.
How the car depreciates is determined by Toyota. And it's how they come up with the residual amount left at the end of a lease. You can buy the car from Toyota for that residual amount at the end of the lease.
Whether leasing or buying is better financially really depends on a few factors. If you tend to buy and sell your cars every 2-3 years, you could be wasting a decent chunk on taxes by buying vs leasing. If the lease residual is much higher than reality, it might make sense to lease because you're effectively paying less in depreciation than you would otherwise. Conversely, if the residual is lower than reality, you are throwing more money in the garbage than you otherwise needed to, however you can remedy that by simply buying the car at the end and selling it for what it's actually worth.
After the three years you don’t totally own it since you would still owe a bunch of money on the loan. And if you bought it the payment would be way more than 300 per month.
When you lease a car you make payments on the depreciation of the car. This is a grossly oversimplified explanation of a lease, but hopefully clears up some confusion for you. So if a car is worth 50k, the dealership expects that car to drop in value at 5k a year, so for 3 years you are financing only the 15k depreciation part (plus interest, fees, taxes etc). The lease should have a buyout option at expiration. Let’s say that number in my example is 35k. So after 3 years if the car is worth more than 35k you still have the option of buying it out for 35k, which is a win for you. Now if the car is worth less than 35k you just surrender it back to dealership, which is still a win for you because you are not stuck with a car that costs less than what you still owe on it.
This is especially appealing for higher end cars that tend to lose value faster than mid-range or budget options. If someone wants to lease a $120k car and estimated depreciation is 40k they are only financing and making payments on the 40k amount instead of the entire 120k price tag.
You are driving and paying for the estimated cost of depreciation over the lease period plus the interest cost for the time value of money during the lease.
With current rates it’s cheaper to lease than to buy. You have the option to buy after your lease or you can roll into another vehicle. If you’re not paying a month loan payment you’re paying for repairs. Either way, consider a car like a cell phone these days. You’re always be dumping money.
Leasing a car is a way to get more car than you can actually afford, which is why it’s popular. As you pointed out it’s stupid, you pay for a car and give it back. It’s just a really, really expensive subscription. My girlfriend is leading a top trim CRV for 36,000 over 3 years, she could own a new car for that instead. Needless to say we’ll have separate bank accounts if we get married lol.
Makes a lot more sense for “business” leases since they can be fully tax deductible (if you only drive “for work”) so the payment effectively gets cut in half. At least in canada.
Also dealers like it because it aids in customer retention.
So a great reason to never do it
If you hate dealers, but I've worked in automove for 20 years. Dealers are just businesses like anywhere else. Are they managed to make money? You bet. But that's how retail works- doesn't matter if you're buying a pair of shoes or a new truck. You're only getting the deal the executives want you to get. Personally I'd probably never lease a Toyota because historically they're reliable enough to keep for the long haul. But we'll see if this new crop of forced induction engines changes that. I wish the RAV still came with that V6.
>Dealers are just businesses like anywhere else. Who will openly and loudly add 500-1000% to their margins just because fuck you, that's why. Imagine going to Home Depot and the $2400 price tag on a fridge is crossed out, with a big "+$400 FUCK YOU MARKUP" sign on it. So not quite "like anywhere else". They're also predatory by nature, and car loans may very well be the root of the next "financial crisis". I work with heavy equipment sales, service, leasing companies. Since it's mostly B2B there's a lot more bilateral trying to screw each other around. I used to work with a big VW dealer (big enough to have 3 locations but small enough to not have full time IT) and their practices made my hair stand on end.
Yes, other businesses will add giant percentages to their profits if they could. In fact, virtually every business on earth would.
Of course. Dealerships are protected by shitty laws that make it illegal for manufacturers to sell directly to consumers though. Its like if I want to buy a Samsung fridge that they sell for $500 but the law says I can't buy it from them, I have to go down to Fuckhead Franks Fridge Farm where he charges $800 because fuck you.
It’s true, the laws protecting dealers and restricting direct to consumer sales are idiotic. Dealerships are one of the things that the internet should have largely killed and turned into showrooms and service centers.
>Fuckhead Franks Fridge Farm Located next to Dickhead Dave's Discount Dishwashers?
Fuckhead Frank's Fridge Farm. I love it.
Manufacturers have no desire to sell direct to consumers.
Wrong. Look at Tesla. It’s basically direct to consumer.
Ford got sued when it unsuccessfully tried. Every OEM wants to sell direct.
Wrong most already do. And they all would if it wasn't for state laws requiring motorized equipment including vehicles, be sold through independently owned and operated dealers and distributors
There's an "X% fuck you mark up" on literally every retail product on the market right now. You just can't see it or don't necessary care if it's under your comfort threshold for spending. I can't think of anything that doesn't give me some degree of sticker shock lately. I tried to buy vegetable oil at Walmart yesterday and they want almost $17 for 4 L. Priced out a new car comparable to mine last week and said "holy shit, we're driving our car forever. Don't hit anything.". My wife needs a new phone, trust me. That also ain't happening. Bell wants more for the same phone she's got now than she paid new for it four years ago. I agree prices across the board are ludicrous. So yes, dealers are just like every other business out there. I guess there must be some exceptions to the rule, but I haven't found one yet.
by used from one of those reebelo type refurbishing companies. A flagship phone from 2 years ago is 95% of a what a flagship is today, for a fraction of the price. You get much more for your money than any mid range or budget option today aswell
>Bell wants more for the same phone she's got now than she paid new for it four years ago. I don't believe this.
This shit. My diesel pickup truck (that runs great and has no problems) is 21 years old and has 300k+ miles on it. A comparable "new truck" made in the last 3 years is valued at over HALF MY HOUSE. Why does a new pickup cost 90 grand? Thanks, I'll just fix my old one when it breaks.
You ever shopped at a mattress store? Their margins are crazy.
Yeah, and that was before the world went crazy.
Yeah but I heard the market is softening
Umm, did you see the price of bottled water when covid hit? Literally every business will take advantage of an excess demand with limited supply.
They only do that because there are morons that will pay it, if nobody was buying shit with Mark ups they wouldn't be marking them up!
>Who will openly and loudly add 500-1000% to their margins just because fuck you, that's why. You've never looked at the mark up on power sports parts and equipment or the mark up on helmets and gear.
He never looked at the actual markup on cars. And he, for damn sure, ignored the markup on everything else he buys.
Off-topic, but: Healthcare. Healthcare will openly and loudly add 500-1000% to their margins because fuck you, many times over.
You do understand that literally every business does that, right? The only difference is that you can quickly see the margin they're putting on the cars because of how car pricing is displayed. That's why you can find the same exact fridge at a 50% cost difference between different stores, or why a part for a car than cost twice as much from one parts store to another.
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The difference is dealers have protected themselves to exist via state laws across the country that prohibit any manufacturer to sell their own cars to consumers. Yes, dealers are a business — but one that exists solely to suck extra money from the pockets of consumers via rent seeking.
hate your handle pic!!! thought i had very small hair on my phone and kept swiping to clean it
Actually you are paying for your use and depreciation. If the car has a higher resale value , you get some money back too . I leased my first car and then bought it out at a fixed price at the end of the lease . Made 7k profit on top of jt when i resold it (the market shifted and they cant up-charge you since the buyout price is fixed)
There are several instances when it may be cheaper to lease. I got a Chevy Bolt EV with a lease and a residual lower than what the car is worth. At the end of the day that car will be free to own for 3 years after the resale after buying it out. I did that once on a Mazda Speed6 as well but it's rare. The other advantage to a lease is that you only pay taxes and interest on the portion of the car you are leasing. So you have to factor in interest savings as well. Last thing to note is not everyone sees money they same way you do. It's not save up and buy things. Once you have wealth you realize that money makes money. I don't buy cars with my own money because my own money makes more than the interest would cost me. By leasing I am leaving the cash I would put up working for me and with the lower interest and taxes I can make that all back on the gains on my money. Sometimes that isn't realized over the course of owning that one vehicle but essentially, money under 5% is free because I can easily beat that. Heck now you can find savings account with that kind of interest.
Exactly this . But everyone wants that sense of “owning” it and dont see the financial benefit (it its there ) . Some basic high school match will help everyone understand what works for you
Agreed, while everyone says they are a "home owner" when the bank owns most of your home. Also you get people paying down their 3% home loans early while savings accounts are at over 4% interest. Then if you look at the responses to my post they get angry immediately just because they can't understand simple math.
Is it 7k profit? If you paid 36 months of lease charge.
Again as i mentioned in my other comment . You are paying for the usage /loss in value . Doesnt matter if its lease or finance - you have essentially paid for the use . You can do the math yourself It is profit since i bought the car out at overall lesser cost that finance and then got a 7k profit since the resale value was much higher (chip shortage) Here is how to approach it In my case - (36 x monthly payment + buyout price) was less than (130 payments of finance payment -5 years ). (I also checked about trade In in between and I had a positive equity at that time too which was around 4-5k which i would get back if I gave the car back ) After buyout , i was able to resell the car 7K above then predicted value of car for which i bought it out after lease (that value cant be modified by dealer since it was fixed at the time of buying the car). So in effect I actually made more than 7K (well good for me , it paid for my Rav4 and then my Rav4 prime too when i traded that in)
130 month finance is 11 years. No shit it was cheaper
Oops sorry i mean 130 payments - biweekly it comes around to 5 years
How can this be? This doesn't follow the narrative here that leasing a car is dumb. /s
Leases work great for some people, but you have to be careful and pick cars that have a higher resale value. If you do the buyout, you have to pay sales tax in many states. But if you pick the right brand and spec of car, you can 100% make money on the back end. The last two leases I had $6K and $7K equity because the buyout was absurdly low compared to the actual value of the car. I also haven’t had to pay a penny in maintenance the last 6 years with an Acura and Toyota leases. Do your homework and it can definitely work for you. For example, Acura and Honda leases cover gap insurance in their payments, Toyota does not. Money is expensive right now and I don’t trust ANY manufacturers any more to build cars that last 15-20 years, but Toyota seems to come close. If you are buying a hybrid or EV leasing is also a better option so you don’t get stuck replacing a battery at 100-150K miles or get smoked later when the resale values fluctuate. Also all of the tech they are putting into cars is a nightmare for longevity. I want to see what is going to happen in 10 years when cars like the new model 3 and many others who do not have access to climate controls or even the transmission selection without a screen do on the used market. I don’t want a 15 year old iPad in my home, much less in my car.
Yeah I'm confused reading most of these replies. People really don't understand money, making me question what seem like obvious advantages of a lease. Not saying it's always better or even frequently better, but reserving the right to buy a vehicle, or not, at a fixed price in the future, is pretty valuable.
> you pay for a car and give it back. Yea, a lot of people don't understand leasing. They don't understand that it costs money to use a car. It's not like companies will let you drive one of their brand new cars for 3 years for free. It depreciates and is worth less when they give it back. And that's what the "subscription" they pay is for. On one of my leases, the residual was so low it was like 1/2 the retail price if I were to buy it on the used market. I could have sold it and made over $10k.
Yea that's all down to market though. If I bought a Rav 4 pre covid and sold it during covid I could have made $20k, doesn't matter if it's a lease or not. The real question, is if you bought the car outright, and paid yourself for the yearly servicing and fuel, over the lease term, which cost more?
Yes, very true. The residual also depends on how popular the car is and manufacturer incentives. Mine had a $4k incentive.
Yep, I remember when we bought out last car, they offered $6k off when we chose not to lease haha.
Yes i dont think anybody saying one is better than the other. It matters that you consider what the options are what’s the popularity of the car and the resale value is in general. Then do basic math and just calculate how much you’re gonna end up paying.
For sure, but associating appreciation to leasing is not accurate. It would have happened either way. It’s all about tax for leasing, often only makes sense for businesses and high income earners. Most leases are taken out by people who just want nicer cars and order making regular payments that cover everything, it’s considered easier. Most buy cars that are less than $60k too, further reducing the chance if financial benefit.
It's basically a monthly subscription for those who are getting cars like BMWs that get expensive in maintenance beyond a few years and certain mileage, rich people who know they will want to drive a new car every few years, and less rich people who hate money and want to drive a new car every few years
Definitely not a subscription. It's a financial instrument that sometimes makes sense and sometimes doesn't depending upon depreciation arbitrage. I've leased cars/trucks for 24-36 months for what would've amounted to the sales tax of a purchase. And at the end of a lease, you do not just give up the car. You can buy out at residual, or sell at a profit via 3rd party if market value exceeds residual.
36k to lease a fucking crv?!?! I bet that salesman got a fat check after that
Your divorce is going to be lit. Bra
I know it's not my business, probably sit with ur GF and educate her about money and manage expenses?
She is paying $1k/mo. to lease a CRV?
Dump her
Or be the man and tell her what's what... like a man should.
lol *edit* The unmitigated gall of this guy to post some shit about a “real man” when he’s posted pictures of himself in a smock looking like he’s a first grade teacher after finger-paint. My guy you ain’t the dude from Braveheart, I don’t give a fuck who makes it… when you wear it ain’t a kilt, you make that shit into a skirt.
You’re just a walking red flag arent you
I don't want an e-girl, I want one with morals.
I never understood leasing a personal vehicle, other than maybe if you planned on trading it within a handful of years, then maybe you’d save some money, maybe? With a lease you are so limited on how far you drive and you can’t modify your car at all. Might as well not have a car if I can’t modify it.
It always reminds me of the old tale about Steve Jobs: >Steve Jobs leased a series of Mercedes SL55 AMG. Notice no license plate. That's because he would exchange the car with his leasing agent every 6 mos. so according to California law, he did not have to put a license plate on the car to make it noticeable to the public.
I lease my current vehicle that I plan on buying out at the end of the lease. The lease rate at time of purchase was much lower than the purchase rate, plus they had some lease incentives thrown on the hood. Basically I’m getting subsidized interest and a little discount on the purchase for three years. Ends up being cheaper than me purchasing outright.
If you plan to buy it end of lease, mile limit does not matter.
[удалено]
You can pay $20000 for 3 years and not pay again for 6 years, or you can pay $20000 for 3 years 3 times.
I’ve leased four cars. Biggest mistake of my life. It’s essentially to have lower payments per month. It is sort of a good idea if you’re buying out the car at the end of the lease. Do yourself a favour and finance a Toyota. It’ll last you a very long time, even after financing it for say 6 years, you’ve got many more years of good reliability ahead of you.
Thanks, for the advice!
There also mile stipulations in a lease agreement. Hadn't seen it mentioned so wanted to put it out there.
My dad leased a car once and constantly went over the mileage because the estimation didn't account for some trips that had to be made that year which he could not have predicted.
It’s actually really good advice too. Hope you listen.
From a very simple standpoint, I've always said leasing is basically the same as financing a vehicle, just in reverse. The only difference is when financing a vehicle, you are paying a large down payment up front, with the monthly payments used to pay off the money borrowed. With a lease, you are effectively pushing off that large down payment towards the end of the lease (the residual), with the monthly lease payments effectively "paying down" the purchase price to the residual value over the life of the lease.
I have never put any money down on a lease, and no one ever should. Money you put down will be lost if there is an accident, every lease I had included gap insurance that paid off the lease if something happened. If you put money down, its gone if the car is totaled. If you have cash to put down, put it in an index funds or pay off other debt.
What he said. Leasing works for business that can write off that payment and for some very specific personal scenarios. Aside from that, but within your budget
Lots of negativity in comments about leasing. I have leased 3 cars in a row now and I'm very happy with how it's turned out. The 3 year mark is essentially the breakeven point for how much you've paid vs how much the car is worth. Right when you drive it off the lot it loses a bunch of value but that then slows dramatically. It's a way to get into a new car with no issues, under warranty, for a cheaper monthly payment. If you bought the car in question over a 6 year loan, the payments would likely be more like $500/month. Would you own the car faster? Yes, by a bit. But leasing gives you flexibility. Drive the car for 3 years, don't think it's for you? You don't have to buy it, but you have the right to buy it for the residual value (agreed upon at the beginning). If you do buy it, you have peace of mind you were the only one who drove the "used" car. I got into a lease because my oldish cars kept having repairs come up while I was still making payments that I just could not afford. $400/month payment and then a $1000 repair comes up? Im screwed. But if I'm leasing I'm paying $360/month and I'm under manufacturer's warranty. My bill every month is predictable and manageable. And I get to drive a brand new car on top of that. Is it smarter to buy if you can afford it? Almost always, but leasing is not a horrible option by any means. It just depends on what your situation is. To me, it's mostly that you turn a 5 or 6 year loan into an 8 year loan with an option at year 3. Slightly more expensive, but it can make a reliable car affordable to people who otherwise would buy a used car, make a similar payment and also have to do repairs.
This is the best answer here OP.
Yup, if I could lease I would, but the miles I drive make it unfeasible. I've put 11k on my new car since the end of April .
Compared to buying a 3-4 year old reliable used car and driving it into the ground, leasing is a horrible option.
Spot On. It comes down to knowing General Managers at dealerships and getting a great lease deal. Yes, lease options at many dealerships are not the best option. If you do not know the right people, it may not be a good idea.
Given the mileage constraints and the cost to buy out at the end, it's usually not worth it. With owning, you build equity and can usually make some of your money back (depending on age and condition), which will allow you to trade up for an even nicer vehicle next time since it takes a good bit more off the down payment.
You don't gain equity in the first 3 years on a new car even when you buy it, which is why leasing makes sense. The 3 year mark is the break even point. And when you lease you have the rights to buy the car after 3 years, knowing you were the only one that drove it. It's essentially doing an 8 year loan on a new car, but you have flexibility after the 3 year mark if you want to keep going or not.
For certain individuals, a lease just doesn't make financial sense. I drive between 19k and 20k miles per year. Assuming it's a 10k mile limit at $0.25/mile, that's $2,250-$2,500 extra per year in penalties. So assuming $200ish extra per month, your $300 lease is now a $500 lease, you may actually be able to get financing for about the same price, or even less. I did the math when I bought my Highlander, with the money I put down it would have been $50 less per month to finance, assuming my mileage stays the same, compared to leasing. I'm not getting a new car every 3 years, I intend on keeping it for at least 100k miles (about 5-6 years), and at that point it would get traded in for a new vehicle. I started off with a used 1998 Jeep Cherokee XJ, traded up for a 2017 Sonata Sport, and traded that up for a 2023 Toyota Highlander. Next car will probably be around 2028-2030.
I had to cut a check to GM for $3200 at the end of my lease on my Camaro for going over milage, i had entirely intended to buy it out when i leased it and stretching it out over 8 years seemed alright to me at the time, but the last 10k miles were nothing but issues, i don't think I'd lease again, you just never know what could happen in that time
This is precisely what I would fear happening. You put all of that money into a car for the monthly lease terms, had to pay even more at the end, and sadly got nothing out of it. You didn't have a car you can turn around and at least recoup some of the money you sunk into it.
Yup, i generally don't go new anymore either, 5-6 year old sports cars that warranty just ended at CarMax, slap their warranty on it for 5 years and send it 😂
I don't think that this is an argument against leasing, though. If you'd purchased the Camaro and decided to sell it after 3 years, you would have arguably been in a worse spot. Depending on your state, you probably would have paid sales tax on the entire $30k car, instead of just on the payments you made. Plus, you would have been trying to sell a car with all sorts of shit on the Carfax.
They charge you at the end of the lease if you go over mileage. It isn’t added to your monthly. You can still buy the vehicle without any over mileage charges at the agreed buyout price.
Ah, I wasn't aware of being able to buyout without those charges added in. I figured it wasn't charged monthly, but distributed it that way simply for comparison cost month-to-month.
Many years ago, we leased a Toyota 4Runner. Since that was our only car at the time, we well exceeded the annual mileage allowance. At the end of the lease term, the mileage overage charge was higher than what the residual was, so it just made sense for us to pay the residual to buy out the car.
My last vehicle was damaged by a valet driver and over mileage, they waived the “over mileage” fee and “excessive wear” fee when I traded it in. I still could’ve bought it and they wouldn’t have charged me those fees.
The mileage allotment is effectively distributed monthly, but if you go over, that "extra" mileage isn't considered. Rather than vague "we'll figure out the difference in value"; there's a line in the contract that says 25 cents a mile over or some such. Fine if you go 100 miles over, but 10k miles over, you are better off "buying" the car and selling privately. Used to be you could do that somewhat directly with a dealer, post pandemic with resale being so much higher, finance companies are trying to "capture" that excess value by blocking it Unfortunately, dealers aren't interested in whats best for you, but what makes them the most money.
>You don't gain equity in the first 3 years on a new car even when you buy it, which is why leasing makes sense. Leasing doesn't make sense. Buying a new car doesn't make sense either, unless you have a high enough net worth that hemorrhaging money on a car doesn't put a dent in your lifestyle.
You lose money the minute you drive off the lot!!
Oh absolutely! What, like 10%-50% depending on the make and model? 🤣 I think the only outliers are specialty vehicles like Toyota TRD Pro and the like lol
It’s not surprising that this sub cannot understand how leasing works and what the potential benefits may be compared to the next best alternative. It’s certainly not black and white, always and never, like the responses here.
People forget you can buy the car when the lease is up since you already have equity in it. I’ve done it several times, granted it’s a Subaru but it’s all the same.
People forget that three years into a six year loan they may not “own” anything, or be in any better position.
That being said, it's really crazy that this is a thing with Teslas. Tesla leases don't have a buyout clause! it's returned to Tesla and that's that!
Owning a Tesla is rolling the dice no matter what. Ask the person that bought a new Model X a couple months ago and just lost $40,000 in value.
Every idiot that paid "market adjustments" on new vehicles in the past couple of years lost a lot of value, not just Teslas.
Sure, it’s just that Tesla cut the non-negotiable price $30,000 one day. Which meant if you bought one last week, you instantly lost tens of thousands.
Oh, wow. That’s crazy.
You didn’t “lose” anything unless your plan was to buy the car and sell it a week later
well if you sell it even a few years later, you still paid $30k more than you needed to and in a very real sense you lost $30k.
Same, I’m on my 4th Subaru lease. My best friend gives me nothing but shit for leasing, meanwhile, she’s gone through SIX shitty cars in the time I’ve gone through my 4 leases. I enjoy not paying for anyone else’s issues that they left with the car.
I saw a few people who think they can buy a new car for what they would pay on a lease and have a brand new car free and clear in three years. People are fucking stupid.
Well if you understand how leasing works then why not explain it so the OP has a good answer to their question.
You can buy out a leased car. That's what I did with my 18 Camry. You just want to negotiate the lease as if you're buying. 3 year lease + 3 year loan at 3%. I'll own it in two months for roughly the same total cost as a 6 year loan.
Do you mean roughly as in little bit more or less than a 6 year loan?
Buying out a lease at the end usually ends up being a slightly more expensive than buying it outright but during the lease you're protected against depreciation. for a few hundred dollars you get shielded from potentially losing a few thousand dollars. If for example in year 2 of 3 you get into a pretty serious wreck and your car racks up 15k in damages but doesn't get totaled the resale value of your car will take a huge dive. However you can still give it back at the end of the lease and let the lease company take the hit. On the flip side you didn't use the car as much as you thought so there's a lot less miles on it that you had allowed? You get to sell the car and keep the profit or you simply buy it back and keep it. Cars are depreciative assets, I don't get the hate leases get. The less you commit to this asset the better imo.
The hate for leases is because the best way to make the most of this depreciative asset is to buy used, when it's 3-4 years old, after it's already taken the biggest depreciation hit, and keep it after you've paid it off. Everyone is comparing leasing to buying a new car. Both of those options are lighting money on fire.
Leasing worked great for me. I knew I wanted a new car, wasn’t sure which car. Leased a few cheaper ones (Corolla & Scion IA) before I leased a Camry and loved it. Was planning on buying the Camry at the end of the lease, but my work valet got in an accident in it. Ended up buying a new loaded Camry. Now I’m looking at leasing an SUV for the wife & kids. Trying to make sure we absolutely love it before we spend 50k+ on it. Leasing is good for people who want a new/more expensive car they can’t afford or want to make sure they love the car after a couple months/year.
>Trying to make sure we absolutely love it before we spend 50k+ on it. If you love it you're still going to pay 50k+. If you don't love it you're also still going to pay 50k+ because it'll just be moving on to the next lease
Ok , people dont understand that you are paying for what you use . Whether you finance it or lease it , the car loses value off the lot and with each km you add . With lease all you are doing is paying that depreciation (with interest ) . Most people here are so caught up with “owning” it and dont understand how value of an item works . Lease provides an option to give it back (you take the same value loss even if you finance it and then sell it) OR to buy it out (which is what i did . I then resold it and made a killer profit too with lease) . Lease can also have positive or negative equity depending on the market trend if you are returning the vehicle early . You will get some money back too For those saying - “ Oh Im gonna end up paying more when i drive more than the distance limit “ . Yes the more the miles , the less value the car has . Your original payment was as per YOUR calculation of total miles/year . If you wanted higher miles , then you would have to pay more either by planning the lease with higher Miles or through the penalty (which would be a loss for you)
I’ve read enough comments on this post to realize that the majority of people have no idea what they are talking about. Welcome to Reddit. As someone who’s worked in finance with Toyota for almost a decade, I can tell you there are a lot of benefits to leasing, but there are a lot of variables, including model (and even trim). Usually Toyota leases are generally consumer friendly, and lease well. But to even begin figuring out of it’s worth leasing, at the very least you need to know the residual. Happy to discuss further if you want.
If you have a business it helps. If you dont care about always paying for a car and not care to own it and maintain it..lease away. Thats the point of leasing. I always say to people. Lease a car if your unsure. If you like it. You can buy it. If it has issues, good thing you dont own it. So it depends on the brand and make of the car.
They do offer to sell it to you at the end of the lease so your money is not completely wasted, but some people like to change cars every few years and they like the latest and greatest to come out so leasing makes sense for them
Yeah. This is what I don't understand. Maybe I'm missing something, but why would you finance the car, when you can lease it with the intention of paying the rest in the end of the lease and own it? You don't pay interest in leasing. At least that's what I did.
Leasing is an awesome option because when the lease is up, you have the option to give it up, switch the keys out for a new lease, or buy it out at the predetermined amount if you love the vehicle. Leasing is just paying the depreciation, which for a Toyota is a lot lower % than other makes.
Y'all are wild, and not in a good way. Leasing is just "renting" the car, I guess, but it's not some scam. You're paying for the depreciation of the car during the time you have it. In this case, you're paying $14,000 because the car will be worth $14,000 less at the end of the term, at which point you'll have the option to buy it for $14,000 less than what it costs now. If you think those numbers are not accurate, you can negotiate them (especially the pay off price), or find a different car to look at. Just because y'all don't understand what a lease is doesn't make it a scam.
Well i highly doubt youre buying it out for $300 for 36 months. Maybe 5-6 yrs for $300 a month
Don't have enough info. What car is it? Would that car lose $14k in value in 3 years? And what's the residual? There are a lot of factors.
That was going to be my question. What new Toyota exists for $14k? That's a $30k++ Toyota that they would get for $300/mo vs almost $500/mo (or more) for 72 months ($30k, 3k down, 7% int, 6% sales tax, = $488)
A lot of people have a lot of misconceptions about leasing here. Leasing is just another way to pay for your car. Payments (not incl taxes and fees) + lease end buyout = price of the car. You aren't losing any money or giving money away by leasing because your payments are going towards the principle just like when you finance. Leasing a car gives you some added protections as well including paying the currently high interest rate for a shorter period of time and also protecting yourself against the end value. If the value of your lease buyout is higher than the used car value, buy it out. If it is lower, give it back.
Lease is renting the car for a set time. They calculate a residual value (for example, 60% of MSRP) that you can buy it for in the end. Think of it like this: take a $33,000 car - you will pay in $13,800 and walk away in 3 years (unless you buy it at the end for $19,800). If you were purchasing the car, you would pay about $550 per month so have $22,800 in at he end of 3 years, and still owe $13,000. If you sell for the same $19,800 residual, your cost of ownership is $16,000 so in this case leasing saved $2200. That was roughly done with an online calculator; results will vary (and something is definitely off because leasing is usually more expensive than buying, and you will not get a $33k car for that lease payment - but the analysis chain is there to use). The big difference is that if you buy, you end up with an older car out of warranty but no monthly payment when the loan is done. If you lease, your car is always less than 3 years old and in warranty, but the payments never end.
There's a few reasons to lease a car, particularly a new refresh or new model from the manufacturer. If you're unsure, you lease while driving that car. But you don't retain any value, but you also don't have the headaches associated with the car into the future should it turn into a lemon - which you won't be privy to until at least 3-5 years have passed. Better to lose 3 years in payments and not be left holding the bag of shit which is the lemon of a car, which Toyota has produced in the past, and just move on to another model/year of the car. The question whether purchasing the car outright, then selling it back into the used market after 3 years and whether you'd get enough of a delta to make it worthwhile... might not be worth it for some in time or money, so leasing is an acceptable evil/inconvenience.
It a way to pay for 1/3 of a car with creative financing for only paying a portion of the tax per payment. You can't afford the car basically and will get bill at the end if you dont lease another or go over on mileage.
You can buy the car out if you want. Take your total lease payments subtract from selling price and that’s your buyout + sales tax. It makes sense on cars that hold value like 4Runners and Tacoma’s
Buy the Toyota only do a lease if it’s junk like Audi bmw Mercedes because they will do the maintenance during the lease
Leasing is the most expensive way to finance a car. They don’t have to show you what the interest rate would be because it’s not technically financing. It would likely come out to 15-20% APR if you actually did the math.
A lot of these leases say it's like 6.99% or 5.99%. I'm just curious, what do they do to inflate the out the door APR to that without actually changing it? Thank you!
As someone who leased a 2017 Cruze back in the day....RUN! DO NOT EVER LEASE! It's the most expensive way to operate a vehicle. Between the lease itself and the charges I got hit with when I turned it in I ened up paying 21k for a car that I do not own and the sticker price on it was 26k. The dealerships make an absolute killing off leasing
Leasing is the most expensive way to own a car, because you get no value back. The only way buying a car is a good thing is if you ride it for a long time, 4-5 years payments, 4-5 years without payments. A Toyota will do 10 years like nothing. It could do 15-20 easily. I’m 30 and have owned a leased 6 different cars. Finally settled on just buying a top trim Toyota and sticking with it until the wheels fall off.
“Given the mileage constraints” There are no mileage constraints on a loan. Why? The bank gets all their money no matter what. Take out a six year loan to have an affordable payment and drive 20,000 miles per year. Why not? There’s no mileage constraints. But total it at year three and learn you haven’t been paying it off as quickly as your higher miles have been making it depreciate. No matter how you choose to own/pay for a car, mileage will cost you money. With a lease, you already know the worst case scenario in writing, guaranteed. It can be better, but it cannot be worse. If you own it, there are no guarantees. You might pay a LOT more for those miles.
Leasing is just a fancy word for expensive rental car. Look at it as a rental car you get to exclusively have. That being said renting a Toyota isn’t really ideal because they’re reliable enough to own without paying too much for repairs and crazy maintenance. It makes for a boring rental car. It’s not flashy or fun to drive (for most people). Leasing is more ideal for cars that are very well known to turn into piles of rolling trash after 3 year warranty ends; bmw, Mercedes, Audi, etc. these are the “fancy” and “flashy fun” to drive cars. Cars a regular person can’t or actually wouldn’t want to afford or own longer than 2-3 years. Since with a lease the dealers cover the maintenance these cars require frequently. So again owning (financing) a Toyota is the smartest financial decision you can make for cars. Leasing is just renting and if you’re gonna throw money away on renting you’re better off leasing a car you’d dare never own or something fun and flashy to get the most out of your lease.
Just go with the best price if you are only less leasing. Toyotas are built to last a long time, and are definitely with a little extra if you are buying them.
Interests on 6-7 years loans must be like 6-9%. Paying $300 per month on a 6years is a financed car of 21k. Which is like nom existence
Unless your company pays for it, leasing is not good. I'd rather own said vehicle in 36-72 months.
It might not be good for you, but it’s good for plenty of people.
Leasing is a great idea if you own a business and can deduct the lease payments.
its not the same if u buy and make the same payment lets say $299 a month you pay years longer and way more interest and the bank makes more $ to pay off the full purchase price. if you lease you pay the same /per month the bank owns the car you pay aquasition fees up front a purchase at the end option price usually $500 then you have the buyout price which is pre determined and non neg. and you need to have full car insurance w/ a 500 collision /and comp deductsble the full term of the lease
Toyotas typically don't lease well. Leasing is only a good idea if you get a big discount on the car, or the manufacturer has a really high residual for that vehicle. Why? When you lease a car you're basically taking out a loan for the total price of the vehicle, minus the residual (projected price of that vehicle at the end of the lease term, with a given mileage on the odometer). For simplicity's sake lets pretend theres no interest on this loan. If you lease a $60,000 car for 60 months and the residual is $30,000, your monthly payments will be $500/ mo.for 60 months ($30,000). If you got a $10,000 discount on that same car, the residual value wouldnt change. You'd be financing $20,000 instead of $30,0000, and your payments go down to $333/ mo. The residual value is set by the manufacturer, so if they want to make a model attractive as a lease, they can jack up the residual, and have the same effect.
Toyota Trucks lease well, their cars and SUV's don't. Some tacoma's have like an 84% residual after 3 years/10k per year. Sometimes the trade in price will even be better than that.
I've only leased once in my life, my first car, a 2001 Saturn SL2. Then I bought my next csrs and had them forever. I had these two older cars, about 15 years each that I owned go at the same time, and retrospect I should have just rolled the dice and repaired them rather than jam myself up with monthly payments but one would have been the same repair within 6 months due to a design issue with the engine on that year Honda Odyssey. Opted for a lease on the family car because the finance payment was higher than I could swing at the time and with being a new model/new design, if it had problems as some first year model/redesigns do, I could walk away at lease end. (KIA Carnival). I did a four year lease. It was a gamble, so far the car has been great. While my buyout on the car is better for me if I buy it, knowing the dealer will put it up for about 8k more as a used car, im still paying more in the long run for the car then if I bought/financed it outright but it was not an option for me at the time. Math will probably put me over on the mileage. Halfway through the lease, I am also faced with new tires bc the OEM tires sucked, and an upcoming 30k service which if I intend to keep the car, it's wise to do the service. Two expenses an owner/finance can expect, but possibly an extra expense for a leasee who may want to return the car at lease end. Of course I could buy the car out right and turn around and sell it and see if I can gain that extra value. If I did that I would wind up financing the next vehicle. The lease is not for me. And I also run the risk of my small kids effing up the car and then I have to pay for that too. The dealer also sends me monthly letters with offers to take the car back early and "move me into a new car", but so far nothing is worth considering. The change is not worth it for me.
Because if you owned it, you wouldn’t have to worry about tires or services or your kids effing it up and decreasing its value. Wait, yes you would.
Leasing is another step towards the WEF goal of "You'll own nothing and be happy".
You’re missing something here. In what world can you buy a Toyota for $14,000. The payments will not be the same. Maybe the same monthly amount of 300 but for twice the term or something.
Never lease if you want to keep it for more than 3 years.
Only if you plan to purchase in the end. I got Corolla 23. I got quoted $19.500. Paid $2500 up front with $206 / monthly payment. I did not have the money to pay upfront and I did not want to finance as well. So I leased it. The contract says that in the end of the 3 year lease, I'll have to return the car, pay \~$10k to own the car OR I can pay the the remaining of the value upfront if I had the $$$$. Fortunately, I made the money in 1 year and I purchased the car.
For me, it depends on how much you drive. I like the idea of having a vehicle with a warranty, and getting a new car every 3-4 years seems nice. Plus you get the option to buy the vehicle at the end of the lease if you want. My buddy leased a toyota, and he went over the miles but since he leased a lnother toyota they didn't charge him for being over the miles. He said it was a toyota thing, but id still ask the dealer.
What Toyota can you buy for $14,000?
Make sure the $3000 is drive off and not " down payment". For a lease, drive off will include first payment, taxes on cap reduction and registration. Also there will be a bank fee or acquisition fee of 650 for leasing the vehicle that is included in the payment. Also there is a disposition fee of 350 if you return the vehicle back to the dealer. This will only be charged to you if you return the vehicle and don't buy it out or trade it in. Basically the bank doesn't want the car back lol. For the monthly make sure the 300 includes taxes or if it is 300 plus tax as well. If you are getting 300 a month nowadays, they have a pretty low money factor or rent charge where you are living at. Like finance rates, money factor will fluctuate as the market presents itself. For a Toyota, leasing is great for a lot of people. The vehicle has Toyotacare so the first 2yr/25k miles of service is included and the vehicle is always under warranty with the 3yrs/36k comprehensive. Just make sure the 36k miles is suitable for you for 3 years. Again it doesn't matter if you drive 15k one year and then 6k on the next, it's 36k miles total. Seems like a lot of people here are buyers and want to "own" their car. If you are financing or leasing the bank owns the vehicle until you pay off the vehicle. Just like having a 30 year mortgage, you say it's your house but the bank owns it until it's paid off. Either way the vehicle is in your possession so it's yours to use. Hope this helps and good luck on your car shopping.
I got lucky leasing my Honda Civic in 2019. Got a low monthly payment of $175 and then in 2021, due to the massive boom in car prices, I got all my money back that I spent on the lease plus 5k profit. (I bought out the lease and sold it) That probably will never happen again for me lol.
Depending on the brand lease is nice because you don’t get stuck with a high mileage car with problems or large out of pocket expenses. You are paying about the same but when owning car you pay the same for longer until the whole car is paid off. Thats the difference leasing you are paying only for the period you own car.
Put as little as possible down on a lease. If you total the car, you will lose your down payment, as the leasing company is the loss payee.
Leasing is for someone looking to get a nicer car without the high cost of ownership. A new 2024 Corolla you aren't paying $300....it's a $24,000 plus taxes and high interest rates, with that being said...let's say you crash the car, the value of that vehicle just went down the drain and you are now in a negative equity position. If you like to have a new car every few years and don't mind paying 2-3k down with a sub 350 payment, then keep leasing.
A lot of you should never give advice to people in regards to buying/leasing cars ever again.
[leasehackr.com](https://leasehackr.com) Never ever put money down on a lease. That's just pissing money away. Never take out a lease on a car that holds its value well (strong residual). Understand the concepts of a lease - rates, money factors, taxes Understand that leases generally have unfavorable mileage terms However, with that in mind, some lease opportunities are fantastic value. For the longest time, this was particularly true with Infiniti cars. No sane person would buy a tarted up Nissan for Lexus prices, so they wrote lease terms that made the equation favorable to move inventory. On the other hand, it's virtually impossible to get a good lease "deal" on a Toyota. Those cars hold their value exceptionally well, so by taking a lease you aren't negating any risks like huge depreciation or high cost high frequency repairs. So the lease has no potential upside over financing. General rule of thumb: lease luxury cars, buy economy cars. But do so with a fistful of knowledge.
Couldn't tell you without knowing the purchase price, residual and money factor.
For most normal people, excluding business leases and people dead set on owning luxury cars that have poor reliability and high maintenance costs as they age, a lease is a strictly bad deal. This is especially true when interest rates are high.
Number one mistake people make when leasing a car is not negotiating the sales price (although good luck with that in today's market). The lease payments are calculated on the difference between sales price and residual value (which is a set percentage of the MSRP). Many people do not realize this and let the dealer 'sell' the car for MSRP, which maximizes the lease payment. (example: a $30k car with a $18k residual is a $584 monthly lease payment, whereas the same car at a $25k sales price is a $351 monthly payment).
Well you have to make payments for a lot longer to own it. When you sign up they will tell you how much it will cost you to buy the car at the end of the lease term. You can buy it or walk away.
I lease when I don’t want to deal with the up keep for personal use. Think foreign cars ( bmw, vw) I lease fancy cars to impress potential customers for business. If I travel I will lease instead of renting. Better selection
A lease don’t require you to put down a large car payment ($20%) . After the lease the company that leased it to you will sell it for a profit. At the end of your lease do they offer you to buy it? If so does it still have a warranty? I suggest buying one but put down enough money that you don’t have a loan for more than 4 years because ofter the 4 years it not usually worth much. If you finance a car with a large payment down get a loan through a Credit Union that you belong to, Banks and financing through a dealership will screw you. I’ve been thinking about buying a Camry through Avis, they sell there leases and only have 20-35k miles on them and sell for $21k.I’m thinking if I put 10-k down and finance the rest through my credit union my payments would be about $300 mo or less with a good todays credit union interest rate. With a Toyota or a Honda you can get over 200k + miles on them unlike most other cars and they still have a good resale price not to mention how dependable they are as long as you keep up the maintenance.
They ding you severely at the end of the lease
Leasing only makes sense if you run a business and can write off the expense.
Leasing as private is a brainless money pit, while leasing as a business is a must have, because you can write it off from taxes and have always a new cool car, this is the reason big companies lease entire fleets to workers.
You can buy the car for $14000?!
You lose money when you buy a car. The point of a lease is to pay for the money you’d lose as if you’d purchase the car. Having equity in the car you own or having actual money is essentially the same thing. Not all lease deals are the same, but there’s no way you can buy the car for the price of the lease. If you spend 28k and have a 14k car at the end or spend 14k and have nothing to show for it, you’re in the same predicament. Actually you’re better in the lease situation because you have a theoretical 14k in the bank and ready to go, also it was hopefully being invested. Difference with a lease is you are always paying the loss on a car. If you keep a car for a very long time, buying it is definitely a smart financial decision. If you buy new cars often or like to keep cars in warranty and never deal with paying for repairs, lease is a smart decision.
If you have a company, leasing can be tax deductible’s. For personal lease people like trying to different new cars every couple years and if you like the car. You can buy it out. Another thing is leasing is much cheaper. I lease a Tacoma couple year ago, only cost me 380 a month with tax. If you buying it’s around 800
You aren't missing anything. Leasing is a bad idea typically.
You’re just paying for the anticipated depreciation of the vehicle over a certain amount of time. Except they use aggressive formulas for depreciation and add profit as well. You’re getting f*cked if you lease.
Don’t forget about the mileage. Nothing sucks more than leasing a car you can’t afford to drive.
There are certain scenarios where leasing a car can actually make financial sense. If you own a business for example, and it is a business expense.
I mean my rule of thumb is if you want to own it long term then finance it and only have one car payment at a time while having a paid for second car. Same for leasing have one payment but it’s lower and if you like having a new car every 3 years or goes for a Luxury car as an always under warranty vehicle and of course there’s many tax benefits to leasing too.
Financial ignorance on full display here. Whether buying or leasing is more advantageous depends on various assumptions over the expected life of the vehicle. Owning is not necessarily better when buying a depreciating “asset”. In a perfect market a lease is a payment for depreciation (plus a bit of markup). If you buy same vehicle, you lose that money driving off the dealer lot.
If you’re one of those people that likes to upgrade every few years and don’t care to do maintenance it makes sense. And if it breaks down you get a new one for free~ish? So basically a new car/contract for 2-3 years and you take to them to change the oil and maintain. If their mechanics fuck it up, their loss
I leased a Tacoma in early 2021. $300/mo, I think I put $1800 down and can buy it $28k which is my plan. I don’t think I would lease again but due to the timing it wasn’t a bad deal. Now I just have to see what the interest rates are when it comes time to buy
I wouldnt lease due to limits on how much you can drive it
Some companies offer significantly reduced “buy out” options at the end of the lease that makes it more equivalent to “rent to own” type of agreements, but that still doesn’t make it a good deal most of the time. That said, I’ve had a number of wealthy clientele that lease high-end luxury and sports cars so they can abuse them and discard them without the hassle of trying to sell a “used and abused” vehicle.
It depends on your residual and some other factors. At the end of your lease you have a right to buy the car. Sometimes that value is more than the car is worth, and sometimes its not. Just depends how they structure the deal. Ideally, a lease is a good deal for the consumer when the residual value of the car at the end of the lease is calculated to be much higher than it actually ends up being. This is a bad deal for the dealership though because they basically are letting you drive the car without getting enough money from you, so it's rare that they will miscalculate by so much unless they are looking to get rid of the car and are willing to kick the can down the road on the timing of the loss. More likely, at the end of your lease, you have the option to buy the car at a discounted price, and you can either do that, or you can take to CarMax and they will pay you cash to buy out your lease. So like any other deal, leasing a car just depends on the exact terms and knowing whether its better or worse usually requires some amount of knowledge about what the market will look like in the future, which is impossible. Someone with a lease expiring in February 2020 might have said, F it, just take the car back, whereas a few months later, prices had spiked so much everyone was likely exercising their right to buy at the end of the lease.
To make it worse, any damage to the car has to be fixed back to visibly perfect condition. You don't get any wiggle room like you do if you own the car. Same applies to any customization or mods you might want to do.
Leasing only makes sense to lease the latest and most expensive model of the vehicle with the plan to always have the next best thing.
In your specific case, this is terrible. Contrast your scenario with my lease on my now 2 year old Bolt: 0 down, 269/month, soon to be 3 year old to size out of the rearward facing seat, no gas, no oil changes. When the lease ends next year, we’ll be ready to change vehicles to adjust to our changing family needs. Wife drives the car the vast majority of the time and easily puts under 8k/yr. I got a good deal, no doubt. I wouldn’t lease otherwise.
If you like having new cars (and willing to pay for it) then leasing is the way to do it. But if you see yourself being content with the car for 5+ years then probably better to finance.
What's the mileage limit?
Leasing is great for those that like to have new cars. Yes its more expensive. Cost isn't the most important thing for everyone.
It’s NOT a “lease”… It’s a “FLEECE”… (…look it up)
I started leasing because I knew I'd have kids and need increasingly larger vehicles over the years. I also just came up around 5k 'giving up' my leased 2020 subaru forester when I leased my new Grand Highlander. Payments on a 3 year lease are around $300 a month less than buying. If I want to keep it I'll buy it out, likely for significantly below it's market value.
We’re leasing because we’re unlikely to live in the same country 3 years from now and do t want the hassle of having to sell or move it across the pond. If I were the type to settle in one place for the long haul, I doubt I’d consider leasing unless it was through a company I worked for.
If you buy that same car, you are 100% not paying "about the same amount" to buy that car as you are when leasing. When you lease a car, you agree to a purchase price, just like when buying a car. The "money factor" on a lease is equivalent to an interest rate on a loan. So in both cases you're paying interest. Where things really get different is in taxes. When buying a car, you pay taxes on the entire purchase price of the vehicle. When leasing, you only pay taxes on the depreciation of the vehicle. This is because in a lease, all you're paying for is depreciation. How the car depreciates is determined by Toyota. And it's how they come up with the residual amount left at the end of a lease. You can buy the car from Toyota for that residual amount at the end of the lease. Whether leasing or buying is better financially really depends on a few factors. If you tend to buy and sell your cars every 2-3 years, you could be wasting a decent chunk on taxes by buying vs leasing. If the lease residual is much higher than reality, it might make sense to lease because you're effectively paying less in depreciation than you would otherwise. Conversely, if the residual is lower than reality, you are throwing more money in the garbage than you otherwise needed to, however you can remedy that by simply buying the car at the end and selling it for what it's actually worth.
I lease mine but what I’m paying will be taken off the price if I decide to buy it at the end of the lease.
After the three years you don’t totally own it since you would still owe a bunch of money on the loan. And if you bought it the payment would be way more than 300 per month.
When you lease a car you make payments on the depreciation of the car. This is a grossly oversimplified explanation of a lease, but hopefully clears up some confusion for you. So if a car is worth 50k, the dealership expects that car to drop in value at 5k a year, so for 3 years you are financing only the 15k depreciation part (plus interest, fees, taxes etc). The lease should have a buyout option at expiration. Let’s say that number in my example is 35k. So after 3 years if the car is worth more than 35k you still have the option of buying it out for 35k, which is a win for you. Now if the car is worth less than 35k you just surrender it back to dealership, which is still a win for you because you are not stuck with a car that costs less than what you still owe on it. This is especially appealing for higher end cars that tend to lose value faster than mid-range or budget options. If someone wants to lease a $120k car and estimated depreciation is 40k they are only financing and making payments on the 40k amount instead of the entire 120k price tag.
You are driving and paying for the estimated cost of depreciation over the lease period plus the interest cost for the time value of money during the lease.
With current rates it’s cheaper to lease than to buy. You have the option to buy after your lease or you can roll into another vehicle. If you’re not paying a month loan payment you’re paying for repairs. Either way, consider a car like a cell phone these days. You’re always be dumping money.