New to board and lease question

[soxcited]

Hello everyone,

I am new to the board. Tons and tons of info and good readings here. Looking forward to contribute to the board.

I live in South Florida, looking to lease a 2006 4Runner. Ive never leased before and I have some questions I hope you would not mind answering.

1) First question, do you think the deal advertised on Toyota webpage is a reasonable deal?

"2006 4Runner SR5 V6 - Lease Starting at $289 per Month

$289.00 Payment
$2,199.00 Due at Signing
48 mos. Term

In lieu of customer cash. No security deposit. Excludes tax, tag and state and dealer documentation fees. Closed-end lease on all new 2006 4Runner SR5 V6 model number 8642 with select equipment. Adding options increases payment. $2,488 due at signing includes $2,199 down and first month's payment. $26,743 Adjusted Capitalized Cost based on $2,199 down payment. Lessee pays maintenance, excess wear and tear and $0.15 per mile over 12,000 miles per year. Lease-end purchase option $17,158. Monthly lease payments total $13,883. A Disposition Fee of $350 is due at lease-end. Lease offer only available to qualified lessees through Southeast Toyota Finance.

2) Edmunds gives me $294/month
(tax included, no down) with a residual value of 59% and money factor of .0005 (which corresponds to %1.2 interest rate I think) for fully equipped
4runner.

Do you think I can negotiate with the dealer to get him closer to these numbers? I have 730+ credit score.

3) We are in mid-September. I was told that the best time would be the end of September, Oct, Nov. Do you suggest I wait more for a better deal?

Thanks for your help.

 

[boston_kevin]

See if you can negotiate terms with 1-2 other dealers, then you can go back to the first one and re-negotiate the terms. I did that with mine 2 years ago and only put down $500 with $289 per month for 36 months. After the first year, I bought it out of lease and renotiated the buy out price... My final cost was just above invoice price including all of the initial costs and lease payments ($500 + 11 mos ($3179)... I paid 22,300 after 12 months (renegotiated from 25k).

 

[toto]

Your capitalized cost is $28942 when you include the $2199 down. That sounds kind of high to me for an SR5. What's MSRP?

Also, see what you can do about negotiating the residual value upward. The more it costs to "buy out at the end", the lower your lease payments will be. But if you really think you'll buy it out at the end, buy it now instead to take advantage of financing or maybe cash incentives.

You won't get a better deal on an 06 by waiting. With gas prices going down and winter coming on, SUV's will start selling again.

 

[Jeff Kleb]

I leased my '05 SR5 4x4 and pay just over $260 a month, but mine was for 36 months instead of 48. I am limited to 12,000 miles a year (36k total), which I probably will be well under by the end of the term.

I went to one dealer, from whom I obtained the "Costco Deal" and then shopped two more. When I got an offer for $20 less a month from a dealer farther away, the original dealer matched it.....and here I am.


I have a "closed end" lease, and can purchase my 4Runner for about 19k in January of 2008 - or I can walk away from it and owe nothing. I'm still not sure what I'll do, but I am leaning towards buying it and re-selling it if I can gain a few dollars.

Leasing is nice, as you pay less for the time you own it; but you never build any equity and you must really be careful about the mileage. If you exceed your limit, you are going to get hosed at the end of the lease.

 

[soxcited]

Hi. I got the following quote from one of the dealer:

MSRP $31934
Selling for Invoice $28965

36 month lease with $2000 Rebate and Residual 53% Money Factor 0.00234 12,000 miles/yr Inceptions $2200 at $386 + tax

48 month lease with residual enhancement $56.57% Money Factor 0.00204 12,000 miles/yr Inceptions $2200 at $322 + tax

I told them I do not want the protection plan or the spoiler, and that I do not want to pay anything down, so they adjusted the figures to $397 for 36mo and $332 for 48mo.

I wish I could have around $300 for 36mo, but that seems impossible. Money factor 0.00204 corresponds to %4.89 interest rate. Isn't it too high for someone with good credit?

 

[01silverSR5]

Hi. I got the following quote from one of the dealer:

MSRP $31934
Selling for Invoice $28965

36 month lease with $2000 Rebate and Residual 53% Money Factor 0.00234 12,000 miles/yr Inceptions $2200 at $386 + tax

48 month lease with residual enhancement $56.57% Money Factor 0.00204 12,000 miles/yr Inceptions $2200 at $322 + tax

I told them I do not want the protection plan or the spoiler, and that I do not want to pay anything down, so they adjusted the figures to $397 for 36mo and $332 for 48mo.

I wish I could have around $300 for 36mo, but that seems impossible. Money factor 0.00204 corresponds to %4.89 interest rate. Isn't it too high for someone with good credit?

Not sure on the lease stuff, but I can say that if you where able to get 4.89% on a 60 month loan you are doing great. Interest rates are going through the roof right now. Good luck.

 

[toto]

OK - the cap cost sounds good. I didn't realize the margin between MSRP and invoice was that small.

But a residual value of 53% after 36 months is an insult. It's a Toyota, and one of the top 10 cars for holding its resale value. That's great if you want a "deal" to buy out at the end of the lease, but it's just increasing your lease payments. Edmunds puts the value of a 4Runner at 49% after 60 months - see this thread:
http://www.toyota-4runner.org/showthread.php?s=&threadid=21456

How does the $2000 rebate play in? If you're still putting $2200 down (which probably includes the first payment), and you're paying invoice, then the payment sounds high. It's higher than the first quote you posted!

That's the problem with leasing... there are too many variables, but since most people just shop for a payment, the dealer has plenty of room to maximize their profit.

You've got to get these guys to stop quoting you legal-speak and just lay out the numbers in plain English. No more fine print. You want to know cap cost before money down (which should be darn near invoice price if not lower), term, residual value, money factor, monthly payment, and amount down (which includes 1st payment + deposits + cap cost reduction).

 

[soxcited]

For the same options, Edmunds gives me $27,274 (TMV:$27,586) vs their
$28965 quote.

The options include rear spoiler and
toyo protection plan. I told them I do not want them.

I thought their residual(53%) was too low and their interest rate(4.89%) was too high. Toyota is running a special,
0% financing for 36/48 months, or 1.9% for 60 months. I was hoping to get 59% for residual, 2% interest and no money down, maybe I am not being realistic.

 

[soxcited]

ohh i forgot to mention that they want to charge $650 for processing fee and $600-800 for documentation fee.

What do you think I should counter-offer for these fees?

They also told me that the money factor and residuals are not negotiable. Does this sound correct?

Thanks.

 

[toto]

I've never personally negotiated a lease, so I can't tell you absolutely that those things are negotiable. But I don't see why they wouldn't be... The money factor should be, as the finance rate on a purchase loan is negotiable. I just read a brief article on Edmunds that says the residual value is usually not negotiable, as it's set by the bank that's underwriting the lease and it's based on the model of car you're buying. (Here's that article.)
So in light of that statement, I'd keep shopping around dealers or ask if they have multiple banks that might write the lease.

 

[toto]

A link in that Edmunds article takes you to the American Leasing guide, who posted that the 4Runner is the top-rated midsized SUV for residual value. https://www.alg.com/awards.aspx
Something about that 53% still bugs me!!

 

[Jeff Kleb]

ohh i forgot to mention that they want to charge $650 for processing fee and $600-800 for documentation fee.

What do you think I should counter-offer for these fees?

They also told me that the money factor and residuals are not negotiable. Does this sound correct?

Thanks.

Tell them to take a hike. Yes, there is a "fee" charged by Toyota on leases that the dealership will charge to you (acquisition fee?) - which is fair; kind of like a destination charge. No way around it.

Those other things, though, such as "processing" or documentation fees are purely bogus bullsh*t. In sales, that is known as A.D.P. -- Additional Dealer Profit. While it is unethical in my opinion, 90 percent of customers probably don't complain about it and it is an easy chance for your sales staff to fund their yacht payments. Those schemes rank right up there with the $99 pinstripe that costs the dealer about eight bucks.
:beer: :bash:

Now, as for residual values, I always thought Toyota Financial Services established those parameters and that the dealer had no discretion. I could be wrong, though. Perhaps there might be a Toyota employee lurking here who can help.
:bigok:

Just remember that you may buy/lease a car one time every couple of years. Your dealer does it several times each day. Just who has the upper hand here? Caveat emptor -- Let the buyer beware!

 

[soxcited]

I look at the Toyota's Specials page, and their
advertised deal reads

"$26,743 Adjusted Capitalized Cost based on $2,199 down payment. Lease-end purchase option $17,158"

If my math is correct, this corresponds to 59% residual (17158/(26743+2200)=0.5928) right?

In my area lease is through SE Toyota Finance rather than Toyota Financial Services, but that should not change the fact that 4Runner is one
of the top-rated midsized SUV for residual value.

I was hoping that the dealers would be more
eager to get rid of the 06 models as 07 models are now available, but I guess there is still demand.

I told one of the dealers to take a hike: They first quoted me $333/mo, then retierated and quoted $357/mo for a 4runner with less options.

I am still looking for a fair deal

 

[soxcited]

I also wanted to ask if you know wether the money factor is based on the current APR rates.

Toyota is offering 0%/36 months, 0%/48 months, and 1.9%/60 months, then naively I would assume a tier 1 customer could get close to 0% money factor on a lease.