SilverRiver
New member
The purpose of leasing is to make the car dealers and manufacturers a lot of money. It is the profit center of the operation, along with the service center. They hardly make any money on new car sales.
Why is leasing a new 4runner bad? Is buying and financing better?
- Thread starter alext72888
- Start date
The purpose of leasing is to make the car dealers and manufacturers a lot of money. It is the profit center of the operation, along with the service center. They hardly make any money on new car sales.
adoihcj
New member
Very good advice here, and want you to know what everyone is saying is true.
I chose to lease my 4R. Why, because the last two Toyota's I leased worked out perfectly. In both cases (Venza & RAV4), I received a call from the dealer one year before my three-year lease expired. They claimed they wanted the vehicle, and need more used Toyota's on their lot (certified used to be exact).
While I know this is a ploy and makes them money, at the same time I was able to drive a brand new vehicle for two years, and then get another brand new vehicle.
One of the biggest reasons is, I cannot afford this vehicle if I bought it. Honestly, I shouldn't have bought/leased it since I can't afford it, but I consider it a luxury item I'm willing to spend more on in the long run than at the present time (looking at a monthly payment standpoint). Yes, I could have purchased the 4R by spending about $200 more per month, but it would have been tough to make that payment.
Lastly, I'm not a mod'er. I don't like making changes to a factory vehicle as I like to keep it in new condition like it was when I bought it. That's just me. Trust me, I get jealous when I see all these mods going on here, but I can't afford to make them, and not mechanically inclined to do them.
If you can afford it, buy it. But if you're like me, and you want to drive something you can't afford, lease it.
I chose to lease my 4R. Why, because the last two Toyota's I leased worked out perfectly. In both cases (Venza & RAV4), I received a call from the dealer one year before my three-year lease expired. They claimed they wanted the vehicle, and need more used Toyota's on their lot (certified used to be exact).
While I know this is a ploy and makes them money, at the same time I was able to drive a brand new vehicle for two years, and then get another brand new vehicle.
One of the biggest reasons is, I cannot afford this vehicle if I bought it. Honestly, I shouldn't have bought/leased it since I can't afford it, but I consider it a luxury item I'm willing to spend more on in the long run than at the present time (looking at a monthly payment standpoint). Yes, I could have purchased the 4R by spending about $200 more per month, but it would have been tough to make that payment.
Lastly, I'm not a mod'er. I don't like making changes to a factory vehicle as I like to keep it in new condition like it was when I bought it. That's just me. Trust me, I get jealous when I see all these mods going on here, but I can't afford to make them, and not mechanically inclined to do them.
If you can afford it, buy it. But if you're like me, and you want to drive something you can't afford, lease it.
flyrv9
New member
There is a finance term called NAL (net advantage to leasing). In a perfect world with no other issues and just doing the math, leasing a vehicle is better money wise. However, this is a very slight advantage - maybe a few hundred dollars. Anything that goes wrong during the lease period eats up that advantage: exceeding mileage, damage, etc.
With leasing you do get a lower payment, so you can "afford" more vehicle. Like others have said the high residual on a 4runner could also be a problem. If you want a new 4runner every 3 years, never want to mod it, and don't mind the "what if there is a problem" then leasing might be for you. Also you better read that lease agreement VERY carefully.
With leasing you do get a lower payment, so you can "afford" more vehicle. Like others have said the high residual on a 4runner could also be a problem. If you want a new 4runner every 3 years, never want to mod it, and don't mind the "what if there is a problem" then leasing might be for you. Also you better read that lease agreement VERY carefully.
jwkilgore
New member
If you can't afford it, buy used. That new-car lease payment you will be making for the rest of your life could easily cover the full monthly payment of a 2-3-yr-old used model. Then after a few years it's paid for, and you still have 5-10 years of "like new" usable life with zero car payments in a vehicle with Toyota's reliability record. Even longer if you take care of it like you claim.
Use the money you previously spent on perpetual lease payments to go on a nice vacation, or even better, put it in a savings account to pay cash for your next vehicle and/or the rare repair work.
If your finances are such that you cannot afford a new car but you choose to drive a new car anyway, then that explains why your finances are like that.
SilverRiver
New member
Sorry to be blunt but if you can't afford it then you sure as heck can't afford to lease it. Buy a cheaper vehicle you can buy with cash. You'll thank me later. :cheers:
MLA
New member
I don't why you consider the fact that you were financially responsible embarrassing.
Total cost of ownership will depend on the length of ownership. I am in the "buy it" camp myself for the reasons cited above. Depreciation is the largest cost of ownership, and if you hold on to it long enough, you'll save much more than continuously leasing new vehicles.
Of course you could hold off a few more years for a new 6th gen. I hear it will come standard with a V8, full time 4wd, 6 speed manual and a flux capacitor
If you plan to seriously offroad it, I would not get a lease, because you will suffer some bruises and you will pay for them at the end of the lease. Mine has 4k miles on it and it already has a scrape on the front bumper from a rock I hit off-roading.
And yeah, there's nothing wrong with old cars. I'd still be driving my 2008 Jetta had some ******* not seen fit to run a red light and total it for me. Old, paid off cars build wealth. New, expensive cars don't.
And yeah, there's nothing wrong with old cars. I'd still be driving my 2008 Jetta had some ******* not seen fit to run a red light and total it for me. Old, paid off cars build wealth. New, expensive cars don't.
stamonkey
New member
While I do and agree with everything you said, dealers won't make you any deals and don't care if you offer cash. They make their money on financing, leasing, and warranties. Paying cash is obviously still the way to go, just don't count on any deals if your looking at new or certified cars.
stamonkey
New member
Pun intended with the user name. :wink2:
This is somewhat embarrassing, but for the past 9 years (through college and a few years after) I've been driving a passed down old 1992 volvo 940 while building up my income and career. She's treated me well, and now I'm ready to make my very FIRST car purchase. That purchase will be a black 2014-2015 4runner trail edition with KDSS.
This means I'm somewhat of a newb when it comes to buying cars.
Now I understand these vehicles maintain their value very well.
I'm interested in total cost as being the #1 deciding factor on if I should lease or buy.
If the price of leasing a vehicle for three years and purchasing it after far exceeds the price if simply financing the vehicle for whatever number of months you choose, than buying is a better option.
if the difference is only a few to several hundred dollars, but allows me to spread the payments across seven years to reduce overall payment amount, this for me makes more sense.
Why are people so against leasing THIS particular vehicle?
Secondary question:
Can some one give me a breakdown of all the typical fees and taxes that one must pay when leasing or buying a car? I know they are different everywhere. I live in CT. If someone here lives in the same area, please respond or PM me with the list. I would greatly appreciate it.
As a former car salesman I'll give you a few reasons why you should not lease and then you can see if they apply to you.
1. Mileage limitations - can you stay within the mileage limits set in your lease agreement. If you go over you will pay extra for the miles you go over the set limit.
2. Are you planning to modify the vehicle. Most lease agreements do not allow for modifications so if you plan on doing a lot of mods then I would skip the lease.
3. Are you going to do a lot of hard off road driving? Vehicle condition is very important when your lease term is up. If your generally hard on your vehicles or plan to do a lot of off roading then a lease may not be a good idea.
4. Don't forget about extended finance terms. You can do a straight finance for 72 months on most cars now, especially the 4Runner with its strong resale value. In some cases you may be able to push the finance to 6 1/2 years.
Leasing is generally used by people who like to have a new vehicle every few years, don't drive too many miles and are able to stay within the limits of the lease, keep their cars in good condition, or just want a nicer vehicle than what a "buy" finance would allow. If you plan to buy the vehicle out when the lease term is up keep in mind you will pay more than MSRP for the vehicle. How much over will depend on how much you agree to lease for.
A little negotiating tip, only disclose your intention to lease AFTER you agree on the price of the vehicle. :thumb:
Kennyr44
New member
Yes you never tell them you are paying cash. Finance dept makes the most money in the whole dealership. Cash is the kiss of death to a car dealer. Their biggest profit margin is selling you high rate financing and getting kicked back the percentage spread from the bank. I know it sounds like it should be illegal. They will try to sell you this high rate interest and not even offer you the manufactures interest incentive till you ask for it . In the 80s I bought a car at the dealer who had signs hanging in the showroom from the ceiling with this manufacturers low cost interest rate. In the closing booth the lady was trying to give me interest twice as high till I asked her about the signs hanging all over the showroom. She said oh did you want those rates? Mother ****ing crooks. It's 30 years later and nothing has changed since they tried to do that to me last year. When I bought the 15 the finance guy asked me to purchase the extended warranty no less than five times after I kept telling him no he kept coming back to it. He asked me at least three times if I would give him a perfect score on the satisfaction survey they would be sending me. At the dealership I worked at a fellow mechanic bought a one year old pickup from our lot. We asked him what rate he got and he said I dont know. He then got his paperwork out and his employer charged him 16%. He then called his bank and they told him used car loans with his good credit was 8%. He was so pissed he listed and sold the truck that week instead of refinancing.
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Weyland-Yutani
New member
I really hate it when people say bring cash and you will get a deal on the car. If you're buying new they don't give a crap cause you are already paying cash either through their finance or some other one. 0% is a no brainier as you can put the cash into something else to make interest.
A car is by far the worst investment you can ever make cause it eventually is worth nothing but what scrap sells for to the junk man.
I saved more money by driving 4 hours out of state, calling ever dealer and using Amex True Car.
A car is by far the worst investment you can ever make cause it eventually is worth nothing but what scrap sells for to the junk man.
I saved more money by driving 4 hours out of state, calling ever dealer and using Amex True Car.
Hellamatic
New member
This!!
Buy what you can afford. If you can't finance a vehicle and have it paid off in 3 years, OR just pay cash outright, you can't afford it. Leasing is only really beneficial if you're writing it off 100% for business. At least that's true where I live.
Hellamatic
New member
why would anyone who can actually afford to save 40K in a reasonable time wait to purchase a car with next to negligible financing? you're simply not living in the real world. i would say 0.000000000000001% of people can afford to save up for vehicle of any real value in a reasonable time. plus you gotta drive something in the meantime right? put that in the expense side of the equation while you save up those thousands of dollars.
it would take a person who can easily afford a 40K vehicle just as long to save for one as pay it off plus the modest cost of borrowing fee. you must have large windfalls falling in your lap and be completely out of touch with reality.
i can't even understand how you managed to type that out without accidentally stabbing yourself with a fork or something.
DesertCanyons
New member
Interest rates going up
Pay cash if you can. Finance to buy if you need to. If you can't afford to pay it off in 3 years, consider waiting until you have a larger down payment.
I'm going to be paying cash for my new T4R very soon. I've saved for it in under a year and that beats paying a loan off for 36 to 60 months. I don't want a big car payment. Being a fairly new independent consultant and having gone through the Great Recession, I know my budget for car payments and other big expenses can fluctuate from month to month.
This is not what the OP is asking about though. He's considering a lease or a purchase with financing.
The interest rates are going to rise in the near future. The Prime Rate is set by the FED Reserve Board and they are about to raise the rates. Best guess is the Prime Rate will go up in September or December. Shortly after that happens real estate mortgage rates and car loan rates will go up too.
If you want to finance a new car now is the best time, not later. If you plan to lease and renegotiate the purchase when the lease is up, the finance rate will be higher then.
Pay cash if you can. Finance to buy if you need to. If you can't afford to pay it off in 3 years, consider waiting until you have a larger down payment.
I'm going to be paying cash for my new T4R very soon. I've saved for it in under a year and that beats paying a loan off for 36 to 60 months. I don't want a big car payment. Being a fairly new independent consultant and having gone through the Great Recession, I know my budget for car payments and other big expenses can fluctuate from month to month.
This is not what the OP is asking about though. He's considering a lease or a purchase with financing.
The interest rates are going to rise in the near future. The Prime Rate is set by the FED Reserve Board and they are about to raise the rates. Best guess is the Prime Rate will go up in September or December. Shortly after that happens real estate mortgage rates and car loan rates will go up too.
If you want to finance a new car now is the best time, not later. If you plan to lease and renegotiate the purchase when the lease is up, the finance rate will be higher then.
SilverRiver
New member
If the OP would supply some "buy" and "lease" numbers, I would crunch the numbers just for fun to see how bad of deal it is.
Weyland-Yutani
New member
If you say you are going to pay cash, the price is still the same. Toyota dealership has nothing to do with fiance because they are for the most part separate companies. The TFS sets rates in areas and dealer incentives. They hope that the 0% interest people will miss just one payment to screw them out of 100's if not 1000's of dollars in fees and bloated interest rates. The more cars the dealership moves the cheaper the "dealer invoice" is for them to buy other cars. Go buy a Prius right now, they are trying to give them away because the premium isn't worth the cost of a new Corolla.
I got a loan from my credit union for cheaper rate 0.5% cause the 2015 4Runner doesn't have 0% (in my area) only 2.9%. For all purposes they have no idea where the cash comes from all they care is that you pay for the car.
Really it comes down to your negotiating skills, bluebook, and what the dealer has already in the car. Add how in demand the car is to someone. A new 2015 4Runner TRD pro isn't going to move in price cause you have cash.
Bring in a envelope of cash Soprano style and see what they will sell you the car for and come back and say you will finance it. Nothing in the price will change.
I am only talking about new 4Runners not about used or a 3 cylinder GEO metro someone had stored for 20 years in hopes of getting more money.
I still love you and you can buy me OR a car any time for cash.
op2:
So what's your suggestion when they offer 0% financing? Why would I give them a pile of money when I could pay them a monthly payment at no cost and I get to keep that pile of money I've saved.
Did you pay cash for your house too?
