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Lease vs Buying experiences

Discussion in 'General 4Runner Talk' started by bperrault, Dec 22, 2020.

  1. Dec 22, 2020 at 6:00 PM
    #1
    bperrault

    bperrault [OP] New Member

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    Hello friends

    Been looking to start my 4runner journey. Generally looked at new and used SR5 models. Very interested in the new trail models.

    My main debating continues to be the pros and cons of leasing vs buying a new one. Most likely would buy out a lease after term unless new significant changes are made. Have never leased a car but the chance to save a few hundred bucks a month during these uncertain times seems reasonable.

    Thoughts???
     
    Thatbassguy likes this.
  2. Dec 22, 2020 at 6:48 PM
    #2
    Mtbpsych

    Mtbpsych New Member

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    I wouldn’t ever recommend someone to lease a car unless you’ll be planning to get a new car within 3 years. Also, if you don’t plan on modifying it. If you’re unsure of your finances with the current times, smartest move would be to hold off on it until you’re 100% you can juggle a car payment with income uncertainty.
     
  3. Dec 22, 2020 at 7:01 PM
    #3
    ForRun

    ForRun 4Runner

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    I leased one time. traded a year early and didn't lose a penny. Same as a purchase buy low, sell high
     
  4. Dec 22, 2020 at 7:06 PM
    #4
    Thatbassguy

    Thatbassguy New member? Really??

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    Welcome to the forum!

    I think leasing can be good for the right situation.

    If someone wants to get a brand new car every few years, and keep payments low, and doesn't want to modify the vehicle, leasing can be a good deal.

    Leasing with the intent of buying out is a little different. You're obviously going to pay more for the vehicle in the long run. If it's just a way to get the car you want at a monthly payment you can afford, you'll just have to decide if it's worth the extra money to have it now.

    It might be worth researching how much you'd pay monthly and altogether to buy VS leasing and buying out. Of course, it's a bit of a guessing game, because you can't be sure what the buyout will be, or what interest rates will be in 2-3 years.
     
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  5. Dec 22, 2020 at 7:09 PM
    #5
    erfer1

    erfer1 New Member

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    I leased mine, got the deal of the century on the last day before our state went into lockdown in March. I mean crazy great deal.;) Of course I will purchase at the end, and my residual will be crazy low. ( I use to sell cars).Bonus: So low, if the 6th gens look good, the trade in will be thru the roof. It all depends on what you plan to do. I've been thru the pains of a long term Disco build, had that truck 9 years and wheeled the heck out of it, than sold it. I didn't make a profit, but had a helluva great time! Really depends on how long you REALLY plan on keeping it.:yes:
     
  6. Dec 22, 2020 at 7:20 PM
    #6
    caitcards90

    caitcards90 New Member

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    I ended up leasing mine, and putting down a pretty hefty down payment, which allowed me to have the lowest monthly payments. Planning on buying out at the end of the 3 year term. I’ve already modified a bit, and I reckon if I want to resell it I probably wouldn’t lose out much!
     
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  7. Dec 22, 2020 at 8:58 PM
    #7
    Ahdofu

    Ahdofu New Member

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    For a given interest rate and residual value of the vehicle at the end of the lease/purchase term, both leasing and purchasing become identical in terms of total dollars spent. Of course with leasing the monthly payments are less because you're paying for the depreciating value of the vehicle so this fact alone make it appealing to many people. Note that here I started this argument by fixing interest rate and residual value and in real life they are not the same. With a purchase, people have long learned to haggle over the purchase price and perhaps interest rate if money is being borrowed. With a lease and per my experience, many folks do not do this. They take whatever that is being offered to them not realizing that they can still barter over the "purchase price", interest rate and even the assumed depreciation rate and let's not forget the lease fees. Because of this, leasing grows more expensive that it needs to be. It is a money maker for the manufacturers. However if done carefully and especially if you intend to get rid of the vehicle at the end of its term, leasing can be quite attractive.
     
  8. Dec 22, 2020 at 9:40 PM
    #8
    kmeeg

    kmeeg LionRunner

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    I have always leased my cars. But I financed my 4Runner because I wanted to modify with lift and sliders, etc.

    However one of my friend leased a TRD Pro since he wanted to have a very capable vehicle right out the factory and return after 3 years if he doesn't like it as he wasn't sure about Toyota coming from X5 and Tesla Model S in the garage. According to him his 2018 TRD Pro trade in value is little less than $34K at Toyota which is a huge loss for him to go for the 2021 with apple car play, Toyota safety sense, led headlights and all that jazz. I don't remember how much he has to pay to own it after the lease ends.

    I think it would be a good idea to finance a 4Runner if you want to modify it. Still there is a risk as the vehicle is not really yours, it belongs to the financial institute.
     
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  9. Dec 22, 2020 at 10:20 PM
    #9
    bperrault

    bperrault [OP] New Member

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    Thanks for the responses.

    My main concern with a lease is just having to end up paying way more when buying out at the end of term than if I financed originally. If the numbers work out to be not a significant difference then so be it. But the lower payments would allow to afford a newer model say TOR that I know I would buy out and keep for a very long time.

    And my neighbor leased his Taco and has continued to upgrade it knowing he’s just going to buy it out after term end. He also has been scarred from buying a new car and being hit by someone and then losing a lot of money owning a salvage titled car.

    I mean really I know I can go either way with it if the price is right.
     
  10. Dec 22, 2020 at 10:34 PM
    #10
    erfer1

    erfer1 New Member

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    My advice is to remember that even with leasing, you can still negotiate everything from payments to fees. Remember that your residual is tied to the value minus payments, not fees. Toyota usually has a lease deal, and while December is a good time to purchase, floor plan clearance usually begins in late spring / summer, or right before a Covid lockdown.
     
  11. Dec 23, 2020 at 3:48 AM
    #11
    DirigoT4R

    DirigoT4R New Member

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    I purchased a new Subaru 4 years ago. 0% APR. paid it off this month. I checked what vroom would buy the car for. If I sold the car, and spread out my loss over the 48 months, the payments would be low $200s. So the monthly payments for having bought it was significantly less than if I had leased the car with zero down.

    I figure for a 4runner that holds its value well, it would be best to buy it and shoulder the higher payment. Of course if you move around lease terms enough, you can get to a break even place.
     
  12. Dec 23, 2020 at 9:32 AM
    #12
    Geene519

    Geene519 New Member

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    My opinion is this, you will pay more in the long run if you lease and buy it out after (very rarely do you break even), but to me leasing makes a lot of sense. Its cheaper up front, you get to test drive the truck or car for 3 years and if you end up not liking the car, you can turn it in and try something else. Also for what its worth, if you are going to buy, buy a new one (around me the price difference between new and used wasn't much). My choice to lease was easy, my payment is $330 a month on a 21 ORP.
     
  13. Jan 10, 2021 at 3:51 PM
    #13
    lidz

    lidz New Member

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    Leasing now makes sense as the 6th gen is coming in 2023.
    am I right?:yes:
     
  14. Jan 30, 2021 at 11:42 AM
    #14
    RoxToy00

    RoxToy00 New Member

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    ok, leasing is an involved question, and been many years since I've signed one.
    Yes, you only pay for use, which includes depreciation, but you are not paying to own the residual value/building equity, so the payment is lower. ALWAYS negotiate a buyout figure option that you can exercise at the end of the lease (look at vehicles now that are the same # yrs old as yours will be at end of lease, compare its new sticker to its current asking, figure percentage lost, add 2 per cent and figure your residual from your negotiated price, and negotiate the buyout figure lower from there, should get you in the ballpark). If the retail at the end of the lease is significantly higher than the buyout, dealer will pay you to walk away so they can keep vehicle (happened to a buddy of mine with a 2014 FJ).
    Then you get into modifying your leased (read: borrowed/not owned) vehicle. So suppose you spend $10K on bumpers and trick suspension and other fashionable mods, "just in case" you gotta store those parts, because you may have to reinstall the originals or take a hit on an "unauthorized changes"/"intentional depreciation" clause that is like going over the allowed mileage. And most dealers don't really like modified vehicles, too many liability issues. And what good are those used parts to you if you don't want to take a hit on "intentional depreciation" and change the original parts back in? Yes, you can sell, but what's the market for used parts, and whats the chance they will work on your new ride?
    Finally, yes, dealers carry "gap insurance" (if you don't know what that is, look it up, kinda important in the leasing world), so any damage you do off-roading may (or may not) be covered, full disclosure may be required, telling the lessor of the intended use, getting it written into the lease, or that "intentional depreciation" bit may bite you in the ass.
    IMO, if you want to modify it, if you want to take it off-road, buy one coming off lease, or an older one where the mods are more or less catching up deferred maintenance, and go play. My 2cents worth. Free advice is worth every penny you pay for it, lol.
     
  15. Feb 5, 2021 at 5:58 AM
    #15
    DGP1961

    DGP1961 New Member

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    Me and the wife have leased twice before a Honda for the daughter and a Nissan she drove. Both leases went ok I would say no real issues. Some people feel it's a waste of money cause you don't "own it." Nobody can answer that question for you that's a personal decision. If you don't mind the payments leasing is nice to just drive the thing and hand over the keys when your finished with it. In (most cases) you never really deal with much more than oil changes and maybe a brake job now and then. Hell seeing as it's not "yours" you really don't even need to change air or cabin filters if you really don't want to. You do need to consider and drive the vehicle as if it's borrowed from say another person, leases cannot be handed back in all dinged and scratched. Oh and the big thing is your mileage if you typically do 20,000+ miles (for instance don't quote me) a year a lease would be a real issue for you. They are a cheaper way into a new car I also never went with a money-down lease that to be is a waste. Financially I'm in a different place now and will probably buy going forward but it truly is a personal decision...
     
  16. Feb 5, 2021 at 7:26 AM
    #16
    E Man

    E Man New Member

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    economically speaking, leasing is simply a terrible deal. With the money required to be put down, the payments and at the end you haven't any equity in the vehicle. Leasing is appealing to people because they technically should have no investment for repairs or even maintenance in most cases today. The dealership where I bought my truck has free oil changes for any new car they sell or lease. Leasing is only good if you are fine with knowing you'll have to come up with a few thousand dollars every year, always having a car payment and mileage isn't an issue.

    I've leased 3 vehicles and had to buy all three at the end because of the mileage fees I would have had to pay.
     
  17. Feb 6, 2021 at 4:23 AM
    #17
    RoxToy00

    RoxToy00 New Member

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    Yes, mileage is the kicker, In my prior "rant" (as my loving wife characterized my prior post here), negotiate up front if your mileage is expected to be greater than the 10K or 12K mile normally offered - BE SURE TO CHECK, overage fees can make leasing a financial nightmare and a truly bad deal!!! And if you drive 18-20-25K miles a year, if you negotiate that into the lease up front, your residual value will be lower, and your lease payment correspondingly higher, making the lease option less attractive. EMan is right, may make more sense to purchase residual than pay overage fees at end of lease, but be prepared to negotiate hard, dealer knows he has you tied to a contract, and probably already has a buyer lined up.
    I still don't like the idea of modifying a leased vehicle, or taking a leased vehicle off-roading, where too many "character boo-boos" occur, lol.
     
  18. Feb 6, 2021 at 4:33 AM
    #18
    RoxToy00

    RoxToy00 New Member

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    Imagine renting a 4runner for a week, taking it off-roading, and bringing it back for the turn-in inspection with various scratches and dings in it, similar situation at lease turn-in time. Although all dealers handle turn-ins similarly, some do it a little differently, I suggest talking to someone who has leased from the dealer before, and that's no guarantee; policies change, people change. Just imagine your worst case scenario, and hedge against it.
    So, bperrault, did you make a decision on how you will proceed?
     
  19. Nov 28, 2023 at 12:55 AM
    #19
    leidalinck

    leidalinck New Member

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    I totally understand your dilemma! I went through the same decision-making process. I ended up buying it because I wanted to own it outright and customize it. Leasing can save you money in the short term, but owning gives you long-term freedom. Also, my advisor (Mortgage Broker Sheffield) told me it's a better way. Good luck!
     
    Last edited: Dec 13, 2023
  20. Nov 28, 2023 at 8:55 AM
    #20
    tacoduck

    tacoduck New Member

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    Leasing protects the buyer if the value is ever impacted by a wreck or other unfortunate event like the car being keyed and the paint gets screwed up.

    I leased a taco, drove it For 3 years, and sold it for 5k less than sticker. A lease is nothing more than a series of payments with a balloon on the end. I did hear where now if you want to buy the truck from Toyota, you have to go to a dealership and the dealer gets a doc fee for taking the check. They pulled that crap on my parents, and my dad damn near when nuclear. 800 doc fee to cash the check and mail the title. BS.
     

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