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1Gen-TundraGeneral discussion forum for the 2000 to 2006 Toyota Tundra.
This is a discussion thread titled "High Milage Lease?", within the 1Gen-Tundra forum, part of the Truck Forums category.
I love the Tundra and need to cash-flow a vehicle. Buying a new one is probably not an option. I read some of the lease deals and decided to get a quote myself.
My problem is that my RT commute is 85 miles per day. So I called my freindly Toyota dealer and got a quote for a 24,000 lease on an '06 Tundra DC Limited.
MSRP: 38246
Invoice: 34662 **based on this amount
Rate: .00025
Residual: 23720
Est Mi/Yr: 24000
Acq Fee: 400
Tot Init Pymnt: 501
Adj Residual: 21020
Monthly Payment: 429.85
$501 down
No one has talked about high milage leases other than to stay away from them.
If I purchased it it would cost: $694/mo for 5 years ($1104/mo for 3), and it would have approx 120,000 mi on it.
When I'm done with the lease it will have approx 72,000 mi. on it and it will be 3 years old.
I still think this lease is a good deal, but I wanted to get some feedback on it as I am new to leasing.
Toyota leases are set up at either 12, or 15,000 miles per year.
When you ask for a 24,000/yr lease you are paying the same per mile penalty in your payments as you would if you just waited till the end, and then paid for the excess. If you leave it at 15K, then you would be paying for the excess in 2009 dollars.
You can pay monthly, or just pay at the end, or maybe private sell it at the end to reduce your expense.
Toyota leases are set up at either 12, or 15,000 miles per year.
When you ask for a 24,000/yr lease you are paying the same per mile penalty in your payments as you would if you just waited till the end, and then paid for the excess. If you leave it at 15K, then you would be paying for the excess in 2009 dollars.
You can pay monthly, or just pay at the end, or maybe private sell it at the end to reduce your expense.
Not true. Added mileage is always cheaper to buy up front on a lease than waiting until the end. It's usually cheaper by a nickle a mile or more buying up front. 18,000 nickels is $900. You are much better off buying up front if you know what your mileage average will be. Another good reason to buy your miles up front is the added expense is spread out with your payments and not due all at once. If you wait, it will be a lump sum payback for the added miles at the higher rate. Ask any F&I manager or leasing specialist and they will tell you exactly what I just did.
As far as leasing compared to buying, this is a long debate. If it's right for you, go for it. One way to look at it is if you purchase and want to trade in three years, you will owe more than the trade-in value with the high miles considered, so you will definitely be married to it until it's almost paid off. With the lease you have lower payments and you walk away from it after the three years with no inequity.
Phil
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Be careful when you use the word 'always'.
At best your interest expense will be slightly smaller because you are covering a little more deprceciation in your payments.
As for paying more during your payments, you may as well buy it. The whole purpose for a lease is a LOWER payment.
Be careful when you use the word 'always'.
At best your interest expense will be slightly smaller because you are covering a little more depreciation in your payments.
As for paying more during your payments, you may as well buy it. The whole purpose for a lease is a LOWER payment.
Wow, don't get your panties in a twist. As a matter of fact I am a 7 year Toyota Pro Certified Sales Consultant that has moved on to upper management as well as being the current Administrator for our Toyota store, among other franchises we sell. Along with that, I also have a deep understanding and knowledge of leasing and F&I.
By the way, I was one of the very first Sales Consultants in FL to pass all of the certification necessary to sell the Prius before it was first released in the U.S. in 2000 as a 2001 model.
Now back to the subject at hand. A lease is NOT just to lower your payment. There are a number of good reasons to lease IF it is right for the customer and the payment is just one of those reasons. Others include a set trade time at three years(or the length you choose) without being upside down (owing more than it's worth), almost always under warranty, and you are paying taxes on only the depreciation, not the entire initial value of the vehicle.
The other thing you said was if your going to pay more for a lease, you may as well buy it. Didn't you read the original post by ac3100? He said with the added mileage figured in, the payment for the lease was $170 less per month than if he chose to purchase. That means he would need to have over $6000 equity after three years if he purchased instead of leased for things to be equal in his situation. That isn't going to happen.
Cool you jets priusseller, I am not here to prove anyone wrong but I will correct someone giving the wrong info to a member asking for advice.
I think a lease is probably the right thing to do if you are one that's inclined to stay in a newer vehicle...if you KNOW you are going to be in a new rig in 3 years, it is definately worth it to lease. Okay, maybe not definately, but probably in most cases. If I did not plan on keeping my truck for a long time (my last truck was 13 yrs old when I finally let someone else take her...still going strong) I would probably lease as well.
When the dealer gave me some leasing options just for info, I believe the pre-buy mileage was ten cents, vs. 20 cents at lease end for any over. I would not want to fork over $2000.00 for every 10k I was over in miles. I know too many people that lease and are ALWAYS - yes ALWAYS watching their miles and stewing over that issue. Who wants to have to rent a car to go on a trip 'cause you are "getting up there" on your lease mileage?!?
I will say that if you do the math, a lot of times you can buy at the residual value for far less than that same truck is going to sell for if you give it back to Toyota.
Biggest problem with leasing, in my opinion, is the miles and the whole "do I do this mod and spend the money on a truck I'm giving back in three years?" thing.
Some people in sales or business want to be in a nicer vehicle than they can really afford to purchase. Figure out a way to deduct the lease payments and drive something nice if that's what you want.
Just don't over-extend yourself, no matter what you do.
Wow, don't get your panties in a twist. As a matter of fact I am a 7 year Toyota Pro Certified Sales Consultant that has moved on to upper management as well as being the current Administrator for our Toyota store, among other franchises we sell. Along with that, I also have a deep understanding and knowledge of leasing and F&I.
By the way, I was one of the very first Sales Consultants in FL to pass all of the certification necessary to sell the Prius before it was first released in the U.S. in 2000 as a 2001 model.
Now back to the subject at hand. A lease is NOT just to lower your payment. There are a number of good reasons to lease IF it is right for the customer and the payment is just one of those reasons. Others include a set trade time at three years(or the length you choose) without being upside down (owing more than it's worth), almost always under warranty, and you are paying taxes on only the depreciation, not the entire initial value of the vehicle.
The other thing you said was if your going to pay more for a lease, you may as well buy it. Didn't you read the original post by ac3100? He said with the added mileage figured in, the payment for the lease was $170 less per month than if he chose to purchase. That means he would need to have over $6000 equity after three years if he purchased instead of leased for things to be equal in his situation. That isn't going to happen.
Cool you jets priusseller, I am not here to prove anyone wrong but I will correct someone giving the wrong info to a member asking for advice.
Phil
Thanks for the response Phil, but first of all I don't wear panties, and if I did, they wouldn't be twisted, because as a professional, I don't take business things personally.
I was incorrect in thinking that the way Toyota Financial Services works in California is the same as in every other state. Within the past 12 months, TFS HERE changed their high-mileage lease charges. They now have us deduct the same per mile charge up front, as they would if it were paid at the end.
This lease special is based around two factors- a subsidized lease rate, and 24 month residual on a 36 month lease. With an all-new 07 Tundra coming, it's a pretty safe bet that every one of these leased Tundras will be coming back upside down relative to the lease end values.
Now, if I were going to get into one of these leases, I'd make sure I had gap insurance. If I were a high mileage driver, why pay up front? What if my truck got stolen, or wrecked? My gap insurance would also be paying for my excess mileage, so why should I pay ahead of time when I may not have to pay later?
What if I changed jobs, and didn't drive as far I figured? I'd be wasting money. Due to inflation, the dollar I spend today will go farther than 2010 dollar.
As for your payment comparison, using rough calculations, if he were to buy out the lease he'd have a payment around $ 1100/mo. vs $ 694 on the purchase.
Please don't assume that I have jets, or that they need cooling.
As a seasoned professional like yourself, youve probably found that using the word "always" rates right up there with "this car has everything".
i CAN SAY THERE ARE MANY PEOPLE WHO LEASE BECAUSE WELL, (sorry 4 the caps) they have a friend with a pc who seems to make milage just roll back, in fact there is a lineup down the street to visit that pc. Anyways it is a untold truth, I certainly would never buy any used vehicle.
I am new to this post. I have been reading all of the helpful information that all of you posted in regard to the lease option. I was wondering if anyone could offer me some advice in regard to a lease that I am already in.
Just a little background (please bear in mind I was pretty stupid I guess when I signed into this lease). Anyway, I have a 2004 Toyota Solara that I am currently in a 5 year lease with. I bought 15,000 miles which at the time was perfect. Within a few months after I leased the vehicle I took a new great job which requires me to make 1 trip a week that totals 500 round trip miles. Long story short, I now have 94,000 miles on a 2004. At the end of my lease, I should only be at 75,000. At my current rate, I will be near 140,000 miles at the end of the lease and the buyout is $9,000 (lease is up in June of 08). Unfortunatley, I work in the two cities of which I commute, so moving is not an option.
Can anybody give me some advice? TFS recommended I stop by the dealer who then really quickly tried to sell me a new car. I just am trying to figure out what the best solution is to loose the least amount of money. Should I pay off the lease with another loan? Should I get into a new car that is cheaper and have someone pay off my lease early? Can I change a lease to a buy?
I am new to this post. I have been reading all of the helpful information that all of you posted in regard to the lease option. I was wondering if anyone could offer me some advice in regard to a lease that I am already in.
Just a little background (please bear in mind I was pretty stupid I guess when I signed into this lease). Anyway, I have a 2004 Toyota Solara that I am currently in a 5 year lease with. I bought 15,000 miles which at the time was perfect. Within a few months after I leased the vehicle I took a new great job which requires me to make 1 trip a week that totals 500 round trip miles. Long story short, I now have 94,000 miles on a 2004. At the end of my lease, I should only be at 75,000. At my current rate, I will be near 140,000 miles at the end of the lease and the buyout is $9,000 (lease is up in June of 08). Unfortunatley, I work in the two cities of which I commute, so moving is not an option.
Can anybody give me some advice? TFS recommended I stop by the dealer who then really quickly tried to sell me a new car. I just am trying to figure out what the best solution is to loose the least amount of money. Should I pay off the lease with another loan? Should I get into a new car that is cheaper and have someone pay off my lease early? Can I change a lease to a buy?
Any advice is so much appreciated
For starters, I am not in the car business so for what its worth... Look at your lease papers. What is the residual value of the vehicle when you get ready to trade it in? Is it worth it to take a loan or pay it off? Will you get that much more use out of the car to make it worthwhile?
If you turn it in with say 140K on it, how much of a hit will you take in extra charges? How does this number compare to just buying out the vehicle at lease end? Keep in mind, that putting miles on the car costs money, whether you pay it now or later on another one. If you trade it in now, and get another vehicle, you are going to pay for the future miles one way or another. Put it down on paper so it makes sense.
Option 1: Buy out the lease at XXXX / ### miles = cost per mile
Option 2: Pay the extra charges at XXXX / ###miles = cost per mile
Option 3: Trade the vehicle now, at XXXX + Cost of new vehicle / #### miles = cost per mile.
You can go by the cost per mile as the ultimate factor, but its really up to you as to what you want to pay to drive. If I was in the drivers seat that much, I would want to have a certain level of comfort and safety and performance so it would be a somewhat subjective decision.
First off, I would like to thank you T100 2 Tundra for your response. You brought up a number of good points. I did some number crunching today and also checkout out some options. I also checked out my lease and called TFS as you recommended. At the end of my lease the buyout is $7,100. I will owe more than that in miles, so I have come to the conclusion that this car is mine no matter what (which actually isn't a bad thing because it has been the most reliable car I have ever owned). I am a member of a Credit Union and was able to obtain a loan for my remaining balance on the vehicle of 12,200 (plus tax and title) at 5.9% for 3 years. That is the total amount left to get the car off the Toyota lease at this point...which actually ends up not being that bad. Seems like the longer you wait and more miles you have, the harder it would be to acquire a loan for a car. I crunched the numbers and it looks like I will save about a thousand dollars taking care of it now rather than waiting until the end. Should have bought this vehicle from the beginning. I will NEVER lease another car again. Big waste of money. Thanks again or your ideas.
First off, I would like to thank you T100 2 Tundra for your response. You brought up a number of good points. I did some number crunching today and also checkout out some options. I also checked out my lease and called TFS as you recommended. At the end of my lease the buyout is $7,100. I will owe more than that in miles, so I have come to the conclusion that this car is mine no matter what (which actually isn't a bad thing because it has been the most reliable car I have ever owned). I am a member of a Credit Union and was able to obtain a loan for my remaining balance on the vehicle of 12,200 (plus tax and title) at 5.9% for 3 years. That is the total amount left to get the car off the Toyota lease at this point...which actually ends up not being that bad. Seems like the longer you wait and more miles you have, the harder it would be to acquire a loan for a car. I crunched the numbers and it looks like I will save about a thousand dollars taking care of it now rather than waiting until the end. Should have bought this vehicle from the beginning. I will NEVER lease another car again. Big waste of money. Thanks again or your ideas.
High Milage Lease?
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