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2023 Toyota 4-Runner Limited Lease - Good Deal??

Discussion in 'General 4Runner Talk' started by sarge012572, Mar 17, 2023.

  1. Mar 17, 2023 at 7:12 AM
    #1
    sarge012572

    sarge012572 [OP] New Member

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    I am new to leasing, so thought I would get some advice or insight from others. Looking at leasing a 2023 Toyota 4-Runner Limited. Considering a lease due to several factors, one of which, we like to trade cars every 2-3 years, plus this will be our first 4-Runner.

    I have provided the details of the lease below, and am looking for advice from others as to whether this appears to be a solid lease deal. The residual seems a little high to me, but again I am new to leasing.

    MSRP of 4-Runner: $51,757
    Net Capitalized Cost: $51,905.00 (includes taxes and fees, dealer is discounting 4-Runner almost $3K)
    Lease Term: 36 months
    Lease payment: $699.79 (no money down at signing other than first months payment)
    Residual value: $33,642.00

    With a net capitalized cost of $51,905 and making payments totaling $25,192 over a 36 month term, I would have expected the residual value to be somewhere around $27K-$28K. Dealer is telling me residual will be $33,642.

    I feel it's a good deal given a low lease payment of $699 per month, and no money down at signing, other than 1st months payment, but the residual is what I am stuck on. Given the 4-Runner holds its value very well, I was hoping to possibly purchase at lease end, and sell for a profit, but not sure if the residual is really going to be $33,642.

    Any advice is greatly appreciated.
     
  2. Mar 17, 2023 at 7:39 AM
    #2
    Daddykool

    Daddykool Photography enthusiast

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    It all depends on your finances, or so it seems. If a purchase payment is too high, I get that. But I certainly wouldn't plan to sell any vehicle for a profit at the point of purchase. If you ended up getting a profit, great, but it shouldn't be a consideration at the outset of a purchase or lease.

    I personally have never liked leases (and have never leased) because the main benefit is a lower payment now. So I can get more car now. Maybe there are other benefits I'm unaware of. A couple of drawbacks are mileage restrictions (I drive about 20k per year today), and you own nothing at the end of the lease.
     
    kolter45 likes this.
  3. Mar 17, 2023 at 8:16 AM
    #3
    kmeeg

    kmeeg LionRunner

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    Only problem I see is when you lease you cannot do mods. For me, I have a bad habit for modifying stuff. Even very smaller stuff like changing interior lights, reverse light bulbs, etc..

    One of my friend lease 4Runners. Right now he is on 4Runner TRD Pro and it was very good taking offroad as is. Now its at the end of the lease and looking to claim insurance to fix a bumper damage we had and get another TRD Pro lease.
     
  4. Mar 17, 2023 at 8:16 AM
    #4
    Spare Parts

    Spare Parts New Member

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    I don't know much about leases, but am looking forward to watching the conversation on this. If you were to finance and purchase, what would those numbers look like? From your numbers, it looks like you would lose 8 grand in 3 years, if you stay within the mileage limits. Im not sure the runner would lose that much value in 3 years.
     
  5. Mar 17, 2023 at 8:32 AM
    #5
    siblue

    siblue Well-Known Honda Butt Pirate on GRC forum

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    Toyota trucks are great for leasing
    I’ve sold all my recent leases with money back and never upside down.
    Miles you add will not matter
    Payments are low and you won’t pay taxes for the entire selling price.

    2016 Tacoma sold in 2017 for around $3000 in pocket
    2016 4Runner sold in 2018 $2600 profit
    2019 Tacoma sold in 2021 $8600 profit
    2022 Tacoma sold in 2022(8 months) $3600 profit
     
  6. Mar 17, 2023 at 8:32 AM
    #6
    kmeeg

    kmeeg LionRunner

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    Toyota site can give a rough idea about the payments.

    Lease -
    upload_2023-3-17_9-22-38.jpg

    Finance per Toyota Financial (APR not editable)
    upload_2023-3-17_9-26-8.jpg
     
    kolter45 likes this.
  7. Mar 17, 2023 at 8:34 AM
    #7
    kmeeg

    kmeeg LionRunner

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    Is it 6 months before lease maturity is a cut off time for trade in a lease vehicle? I thought I heard something like that when I trade in one of my lease vehicles. Can't remember exactly since it was long ago.
     
  8. Mar 17, 2023 at 9:27 AM
    #8
    steelevo

    steelevo Not so new anymore...

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    The residual value seems to be low but in your favor if you were to buy out at the lease end and the market doesn’t take a turn for the worse. The higher the residual value, the lower your monthly payment will be. If they set your residual at $27k-28k, your payment would be in the $800’s.

    I would personally do a purchase, especially if I were thinking about keeping it at lease end. Your payment with PenFed at 72 months right now will be about $846ish. At the 36 month mark you’ll owe $28,074ish. You can refinance at that time and re-amortize your loan just as you would do the lease buy out. You can also sell early if the need arises.

    Someone with a better understanding of leases or purchases can correct me here.
     
    Superdave1.0 likes this.
  9. Mar 17, 2023 at 9:47 AM
    #9
    siblue

    siblue Well-Known Honda Butt Pirate on GRC forum

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    That's typically rule of thumb is to sell before 6 mo lease term, but with Toyota's having such high residual value, you can pretty much jump out any time.
    I sold my 22 lease to purchase a 22 Tundra before the first year.
    Back when Honda allowed to sell leases, I lease and sold a 2017 Civic HB after first 5 month to purchase a giant spoiler Civic.
     
    kmeeg[QUOTED] likes this.
  10. Mar 17, 2023 at 10:37 AM
    #10
    RLTW

    RLTW New Member

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    What is your Money Factor (MF)? This determines your overall payment and plays a critical role in leasing. If you don't know please educate yourself with this and negotiate the hell out of this area. Plenty of MF calculators out there to help you understand the decimal percentage dealers use. Make sure this is shown in the lease statement that dealer should be providing you. FYI - they will try their best to hide it so tell you need to see it in writing. Best of luck my friend.
     
  11. Mar 17, 2023 at 12:04 PM
    #11
    erfer1

    erfer1 New Member

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    I leased my Limited and purchased it at the end. I showed several thousand down on my trade in which was also a lease. I usually turned my leases in, but I wanted my 4Runner. Knowing I was going to buy it, I did some minor mods but nothing that was irreversible. My cap cost was $28,000, I went way over on my miles, and then purchased it with less than 30 days to go on my lease. I sold it to the dealership, and then they sold it to me. Your numbers seem a little high, although I know that the value has zoomed into the stratosphere on these vehicles. If you think you're going to buy it, and you're leasing it so you can afford the monthly payment, put some more money down on it to lower your cap cost and your monthly payments some. The money factor is your interest rate that the dealership is charging you for leasing the car. It will be the number in decimals in your financial disclosure. To figure out the interest rate multiply that number by 2400.00, and you'll have a pretty good idea. Also I've never had any trouble trading in my lease at any time, and I usually wait until the last month. Just my two cents.
     
    Last edited: Mar 17, 2023
  12. Mar 17, 2023 at 12:10 PM
    #12
    steelevo

    steelevo Not so new anymore...

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    Based on OP's numbers and a residual value of 65% his MF is about .00204-.00207 (~4.9% APR - 4.97% APR) which is pretty high. The target goal is always closer to .0015 (~3.6% APR) and would bring the payment down to $650. Not sure where the ideal MF sits in today's market.
     
  13. Mar 17, 2023 at 9:19 PM
    #13
    HuskerRunner

    HuskerRunner New Member

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    I'm sorry, $700/month is low to rent a car?
     
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  14. Mar 17, 2023 at 9:41 PM
    #14
    Superdave1.0

    Superdave1.0 New Member

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    Subtract all the payments you made. Didn't profit when considering that. You won't pay full taxes when buying, if you end the loan early by selling.

    To the OP, even if you like swapping cars every 3 years, I'd still recommend you buy. Then you can make modifications, get a scratch or ding, go over mileage, etc and not worry about it. You will still retain a good resale value 2-3 years after purchase.

    I owned a 2018 Tacoma. Sold it for what I paid 2 years later. This was just before the prices sky rocketed, I could have gotten more had I waited. I sold it private party and walked away with $11k in equity. Bought my Land Cruiser outright with that money.
     
  15. Mar 17, 2023 at 9:43 PM
    #15
    Klinsman55

    Klinsman55 New Member

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    Falken Wildpeak AT3W 265/70R17 36PSI. KDSS. Tokico suspension. MTM camera system
    My options from most to least desirable would be:

    Buy a 4Runner outright (especially if interest rates are high)

    Finance

    Buy a used 4Runner outright

    Finance a used 4Runner

    Lease 4Runner
     
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  16. Mar 18, 2023 at 2:21 AM
    #16
    Hans Moleman

    Hans Moleman New Member

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    It’s never a good idea to lease a 4Runner because the payments are so high. Better to buy a new one and sell it 3 years later for not much loss because 4Runner depreciation is very low.
     
    kolter45 likes this.

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