What can I do to my leased 4Runner?

[intense1776]

Agreed. Leasing is a terrible financial decision except in certain circumstances (fleet vehicles). At the same time, so is buying a new car every couple of years. Especially with Toyotas where long term reliability & resale value is high you don't really need to dump a vehicle every few years. In most circumstances when you buy out the vehicle, you end up paying way more for the vehicle over time than you would have if you just financed it at a mediocre interest rate. But to each their own, everyone has reasons for decisions they make.

I would LOVE to know where you heard this. There isn't a single fact in this paragraph.

My credentials: B.S. in Finance, 12 years in the lending and banking industry, numerous financial licenses, currently managing assets well into the 9 figure range.

Blanket statements like this mislead people searching the site for information. And please don't say "this is my opinion". Its plain wrong.

 

[flyinhawaiian01]

So I'm curious to see real-world numbers, how about you post two sets of numbers for us to see; one for a lease with final buyout at the end of lease, one for a financed vehicle with totals at the end of the loan.

It doesn't need to be someone's actual lease or finance agreements, since you're a finance officer, you should be able to print out this information based on a 2015 4 runner.

You and I both know that you will pay more for a lease in the end! Sounds like an old adage, "If it were cheaper, everyone would be doing it!"

And, even if you don't purchase the vehicle at the end of the lease term, the cost of the lease (down payment due at signing + monthly's for the term) vs. the cost of a purchase (down + monthly's at the average interest rate), base it on 24 months for both, then deduct what you receive back if you either traded vehicle in or sold outright (for the purchased vehicle).

I'll give you this, this theory will probably not work with a cheaper vehicle, say a Kia Rio or anything that will not hold any value after 15 minutes of ownership, but for most vehicles, you still end up paying more with a lease.

But, you may know better than I! I'm just a little, old, graphic artist who does vehicle graphics for a living and definitely not a banker or financial advisor! Maybe I can learn something new today!

 

[intense1776]

So I'm curious to see real-world numbers, how about you post two sets of numbers for us to see; one for a lease with final buyout at the end of lease, one for a financed vehicle with totals at the end of the loan.

It doesn't need to be someone's actual lease or finance agreements, since you're a finance officer, you should be able to print out this information based on a 2015 4 runner.

You and I both know that you will pay more for a lease in the end! Sounds like an old adage, "If it were cheaper, everyone would be doing it!"

And, even if you don't purchase the vehicle at the end of the lease term, the cost of the lease (down payment due at signing + monthly's for the term) vs. the cost of a purchase (down + monthly's at the average interest rate), base it on 24 months for both, then deduct what you receive back if you either traded vehicle in or sold outright (for the purchased vehicle).

I'll give you this, this theory will probably not work with a cheaper vehicle, say a Kia Rio or anything that will not hold any value after 15 minutes of ownership, but for most vehicles, you still end up paying more with a lease.

But, you may know better than I! I'm just a little, old, graphic artist who does vehicle graphics for a living and definitely not a banker or financial advisor! Maybe I can learn something new today!

You raise a fantastic point flyinhawaiian. The problem with blanket statements like "leasing is a terrible financial decision" is that there are FAR too many variables to factor in before an idea can be deemed "good" or "bad".

I will list a few of the variables:

-Capatalized cost (Cap cost)
-Money factor (equivalent of an interest rate on a loan)
-Residual (value of the vehicle at the end of the lease term before any adjustments, such as over/under mileage, damage, modifications, etc.)
-Individual's income/capacity to pay
-Number of miles the vehicle will be driven per year
-Whether the lessor plans to buy out at the end of the term or return the vehicle
-When comparing lease of a new vehicle vs. purchase of used vehicle; the added maint. costs for the used vehicle over the new one
-Amount of money down/trade in

As you can see, there is no "apples to apples" comparison to be made here. Every individual's situation is different, just as every vehicle is different in how it will perform (hold its value) during a loan/lease term. The only way to made an educated and informed decision is to take all of the variables into consideration. You may see this as a cop-out on my part, but I assure you, I spend hours with my clients to reach a decision on this, and every single one is different.

Spoiler alert: My final reccomendation between leasing and financing, given similar interest rates vs. money factor (there is a calculation to compare interest rates to money factors), rarely comes down to more than a few hundred dollars over a 3 year period. The cost is more similar than you would think.

 

[cd121082]

Buy it!

Lol u beat me to it

 

[bythehour]

Leasing makes sense if you want to get into a new car every few years. At best, leasing will put you on par with buying and flipping. Generally, you'll pay extra for the certainty and convenience.

Tax implications play a big part as well. Preferential treatment for monthly payments can make leases attractive to those can write the payments off (as compared to tax depreciation).

My qualifications? I'm a CPA with nearly 20 years experience, certified in three countries. And I don't sell leases or financing products for a living. Lol.

 

[8086bruce]

If mods are important to do to this 4Runner I would go to a bank get a note to buy it out and be done with it. If you have any negative equity then I would ride the lease out and not spend a dime on it.

 

[cjacob316]

So I'm curious to see real-world numbers, how about you post two sets of numbers for us to see; one for a lease with final buyout at the end of lease, one for a financed vehicle with totals at the end of the loan.

It doesn't need to be someone's actual lease or finance agreements, since you're a finance officer, you should be able to print out this information based on a 2015 4 runner.

You and I both know that you will pay more for a lease in the end! Sounds like an old adage, "If it were cheaper, everyone would be doing it!"

And, even if you don't purchase the vehicle at the end of the lease term, the cost of the lease (down payment due at signing + monthly's for the term) vs. the cost of a purchase (down + monthly's at the average interest rate), base it on 24 months for both, then deduct what you receive back if you either traded vehicle in or sold outright (for the purchased vehicle).

I'll give you this, this theory will probably not work with a cheaper vehicle, say a Kia Rio or anything that will not hold any value after 15 minutes of ownership, but for most vehicles, you still end up paying more with a lease.

But, you may know better than I! I'm just a little, old, graphic artist who does vehicle graphics for a living and definitely not a banker or financial advisor! Maybe I can learn something new today!

In the case of a Camry:
$1999 down $199/month 24 months
or $392/month for 72 months

Leasing is $8000 cheaper at the end of 72 months and have had zero maintenance costs. You've had 3 cars and at least 2 different Generations of the Camry as apposed to one and potentially two generation old Camry. You average a savings of $109 a month in payments alone. So unless you end up keeping the car for a long time, leasing can make sense.

That is if you pay the $1999 down each time, I don't know the details on that.

 

[jerseyrunner5]

To be honest leasing a car is not for everyone. At the end of the lease you have nothing. But, for a kid in college, like me, I can make enough money to pay the lease quickly and after 2 years I get a new car and never have to worry about anything. I get in the car, it starts, never have to worry about it, service is free, and its just the best way for me to deal with a car at this stage in my life. I would like to just make my car a little more unique but after reading the comments I guess it doesn't really make sense since i will have left over parts at the end of the lease. And the car is either in NJ or FL. NJ tint is illegal but I like having it, and in FL it is legal.

 

[wpen]

Situation
Owning - I pay my loan off in the 4 years of the term. I then utilize the vehicle for another 4 years. In the 4 "free" years I take the money I would I have spent on a vehicle and invest it.

Leasing - I put money down, pay for a term of 3 years and either pay a price over current value (we all know lease payments don't cover value) or more typically with leases I start the cycle all over.

I will caveat this by saying my company leases our company trucks as it relieves us of hiring two full time mechanics and/or paying inflated prices for service on 60 trucks.

I am not a financial wizard but my broker always advises me to purchase and keep a vehicle for the long haul to invest in the "free" years. When interest rates go higher it may be better to buy a vehicle in cash, but right now money is cheap.

 

[Wookiemonster]

there are obviously pros and cons to each option. When you lease you are essentially paying interest on the depreciation of the vehicle, and in turn on most leases you can, with money down, ensure you have a low monthly payment. Not all leases are created equal obviously, But in the case with toyota, especially with the Tacoma and 4runner, due to the fact that they hold their values so incredibly well it can be very worth wile. Case in point, I leased my 12 tacoma with very little down for about 300 bucks a month, btw it was heavily modded (which made it easier to sell) i was about a year away from the end of the lease when my wife and i found out we were pregnant with our 2nd and decided it was time for something with a bit more room in the back, enter the 4runner. The payoff on my tacoma was around 20K, ( not gonna find a 2yr tacoma modded for that price) sold it back to the dealer for 25500, made what i put down back and then some, they turned around and put it up for 38K!!! not sure what they sold it for but I'm sure they made a decent penny. We leased our new 4runner for a couple of the same reasons, I have great credit and we qualified for a low money factor, and a really low monthly payment with very little out of pocket, at the end of our 2yr lease our residual value to purchase the vehicle is 25K which as you know you be hard pressed to find a 2yr old 4runner for that price. So in theory at the end i will have some positive equity to trade in with or buy out for a great price, i have run the numbers a million times and between the two the diff is negligible. But that being said there are many factors that factor in, credit being one of the most important, and in my case it made sense for us to lease....

 

[wpen]

there are obviously pros and cons to each option. When you lease you are essentially paying interest on the depreciation of the vehicle, and in turn on most leases you can, with money down, ensure you have a low monthly payment. Not all leases are created equal obviously, But in the case with toyota, especially with the Tacoma and 4runner, due to the fact that they hold their values so incredibly well it can be very worth wile. Case in point, I leased my 12 tacoma with very little down for about 300 bucks a month, btw it was heavily modded (which made it easier to sell) i was about a year away from the end of the lease when my wife and i found out we were pregnant with our 2nd and decided it was time for something with a bit more room in the back, enter the 4runner. The payoff on my tacoma was around 20K, ( not gonna find a 2yr tacoma modded for that price) sold it back to the dealer for 25500, made what i put down back and then some, they turned around and put it up for 38K!!! not sure what they sold it for but I'm sure they made a decent penny. We leased our new 4runner for a couple of the same reasons, I have great credit and we qualified for a low money factor, and a really low monthly payment with very little out of pocket, at the end of our 2yr lease our residual value to purchase the vehicle is 25K which as you know you be hard pressed to find a 2yr old 4runner for that price. So in theory at the end i will have some positive equity to trade in with or buy out for a great price, i have run the numbers a million times and between the two the diff is negligible. But that being said there are many factors that factor in, credit being one of the most important, and in my case it made sense for us to lease....

The best option is walking or biking to our destination....but that probably doesn't work for all of us who love our cars/trucks. I agree, to each their own on how they finance their car. Your method of purchase doesn't impact me and vice verse. One thing you can't quantify is the joy you have driving and tinkering with your purchase. Cheers

 

[Volley]

You could get away with Bilstein HD's and also would not have to remove them.

I agree with this. You could put even the adjustable Bilsteins on and more than likely no one will even notice when you turned it in. So that and tires I think would be fine.

 

[PNTRDPROO]

I would talk to the dealership's sales manager and see what they say. I was told by the GM of the dealer where I leased my Nissan that as long as the mods dont cause any physical damage to the vehicle Im fine.

My first mod? Debage....

Hell, he will even mod the vehicle for you before you drive off with it (as long as you pay for it of course, just as you would if you got it done after the fact), and he regularly does things like applies vinyl wraps to the exterior of new vehicles and also installs Katzkin heated leather seats into base model cars and sticks them in the showroom.

He even had a guy come in and tint my front windows and he covered the cost and didnt even charge me for it.

So there definitely are situations where modding a leased vehicle is A-ok... Just speak to the appropriate person at the dealership where you got the vehicle.

 

[intense1776]

Leasing makes sense if you want to get into a new car every few years. At best, leasing will put you on par with buying and flipping. Generally, you'll pay extra for the certainty and convenience.

Tax implications play a big part as well. Preferential treatment for monthly payments can make leases attractive to those can write the payments off (as compared to tax depreciation).

My qualifications? I'm a CPA with nearly 20 years experience, certified in three countries. And I don't sell leases or financing products for a living. Lol.

In regards to the tax implications, I agree. Small business owners or those that are self employed may have different pros and cons than a W-2 worker.

The benefit for a lessor who buys out at the end of the lease is that they will be able to buy out their vehicle at a significant discount compared to similar age and mileage options.

For example, at the end of a lease for a 2011 4R LE, at 36,000 miles, the residual would be around $26-27,000, IIRC. To buy that same vehicle as a CPO today, you would spend around $34,000. You would be "saving" $7,000-8,000 on that purchase (buyout). So, to those who say "you have nothing at the end of a lease", that isn't completely true. If you turn the car in, yes. You are left with nothing. However, if you buy it out, you could turn around and sell it for around $30,000 and you will recoup $3,000-4,000 of your lease payments. Or, don't sell it, and maintain your equity in the vehicle.

I also do not sell leasing or financing products. I help my clients better understand their options, so that they can make an informed decision.

 

[bythehour]

In regards to the tax implications, I agree. Small business owners or those that are self employed may have different pros and cons than a W-2 worker.

The benefit for a lessor who buys out at the end of the lease is that they will be able to buy out their vehicle at a significant discount compared to similar age and mileage options.

For example, at the end of a lease for a 2011 4R LE, at 36,000 miles, the residual would be around $26-27,000, IIRC. To buy that same vehicle as a CPO today, you would spend around $34,000. You would be "saving" $7,000-8,000 on that purchase (buyout). So, to those who say "you have nothing at the end of a lease", that isn't completely true. If you turn the car in, yes. You are left with nothing. However, if you buy it out, you could turn around and sell it for around $30,000 and you will recoup $3,000-4,000 of your lease payments. Or, don't sell it, and maintain your equity in the vehicle.

I also do not sell leasing or financing products. I help my clients better understand their options, so that they can make an informed decision.

Buy it out?

so what you're saying is to use the lease as a hedge?

 

[intense1776]

Buy it out?

so what you're saying is to use the lease as a hedge?

Eh... I see where you're going with it, but it doesn't fully fit the definition of hedging.

 

[Northern 4Runner]

I know this is an old thread, but I just signed a 39 month lease on a 2016 4Runner trail edition (Canada).

Payments are lower and the buy out is only $24,000.

A 3 year old trail edition with 60k (km) on the odometer is worth at least $35,000 where I'm from. Plus I average 10-11k km a year, so it'll be even lower than 60k

So I plan on buying it out, doing a convenience deal and putting that $10,000 downpayment on my next Toyota lease.

New vehicle every 3 years and my payments keep getting cheaper, vehicle is always under warrenty, worry free:lookout:

Just my perspective.

 

[LandCruiser]

SFA conversion
8" lift
ARB front, rear, center lockers
Gut and Herculine interior
Interior roll cage
Skid plates, front and rear bumpers, sliders
Two low end speed T-case (inchworm or the like)

Added value.

 

[kpinthebay]

I know this is an old thread, but I just signed a 39 month lease on a 2016 4Runner trail edition (Canada).

Payments are lower and the buy out is only $24,000.

A 3 year old trail edition with 60k (km) on the odometer is worth at least $35,000 where I'm from. Plus I average 10-11k km a year, so it'll be even lower than 60k

So I plan on buying it out, doing a convenience deal and putting that $10,000 downpayment on my next Toyota lease.

New vehicle every 3 years and my payments keep getting cheaper, vehicle is always under warrenty, worry free:lookout:

Just my perspective.

Dont give this $10k as a down to your dealer. Stash it in a savings account and use portions of it as your monthly payment.

Sent from my SM-N920V using Tapatalk

 

[Seattle206]

Leasing a 4Runner? Where's the fun in that? The vehicle is begging to be taken off the beaten path and you'll get dings and scratches all over. Not exciting at all driving to the mall and grocery store.