I am most concerned about the real high MF here given excellent credit - there is very little payment going to depreciation of the vehicle and high rent charge
My main concern is this wicked high MF. Yes, there are good discounts here, but it seems like the MF is jacked up to recoup the discounts. This lease costs 20,550 Out of Pocket and of that there is only 5,621 going to depreciation, with 11,942 going to rent charge.
Additional question: Can someone explain how capitalized taxes on a lease are calculated? Is it on the depreciated value, or is the rent charge also taxed?
As a traditional lease this will not make sense. The only reason to consider leasing a RAV4P is because you wanted to buy one anyway, and leasing for sub 30 days before buying it was the best OTD number.
In NY you are taxed on the total cost of the lease.
Because that isn’t the determining factor for whether you’re getting a good deal.
A bit of an oversimplification, but it doesn’t matter to you how the manufacturer and the bank account for their respective profits and losses.
For a stretch during covid, this was one of the few bright spots in leasing:
99% RV means almost all of the cost was rent charge. But the trucks were really cheap. It wouldn’t have made any difference if the RVs were lower and the MFs were almost zero if the lease cost was the same.
All that really matters is how much the lease will cost you in total, and there are other key variables (dealer discounts, incentives, not accepting any worthless add-ons, whether the MF is marked up, etc.).
Now… if you could deduct the rent charges from your taxes… okay, then there would be a reason to care.
Yes, Ally is offering $750 more in rebates than TFS. TFS has a lower MF and does require GAP insurance.
The only reason the RAV4P was a consideration was to capture the tax credits. Plan would be to lease to term and have option for buyout at end.
By my math, with taxes included on buyout, Ally total cost is $55,430, TFS total cost is $50,708, if bought out at lease end. Total lease cost for Ally is lower if turned in at the end.
What is the lowest financing rate at your local credit union/your bank for a new car refinance 60/72 months?
I understand leasing these to capture the credit, they are not especially good leases. And you’ve already paid the NYS taxes and reg. I’d do the math and lease/buy-out, possibly with Ally
If you’re going to do a buyout, I think it makes more sense to buy out immediately. I don’t think carrying the lease to term and then doing the buy out makes much sense financially, TBH.
If able to do msds the leases are fine to take to term on prime bc the rate will be lower then you can get financing. If no msds it’s around 8% I believe.residuals are so low on these they have to have a ton of equity at the end unless the market completely crashes
I am in a similar situation, could you explain to me what the difference between buying out immediately vs waiting until the end of the lease? My understanding is that buying out imediately still costs the same monthly payment times the number of payments left + the residual (same amount of rent paid). What am I missing?
@jeisensc similar question as my last post for you as well, can you help me understand the difference between buying out early vs leasing for the full term. TFS (or Ally) gets their [(monthly payment) x (number of months) + (residual)] either way don’t they?
That was my original understanding as well, but the more I dig in the more I find saying otherwise. Everything refers to the “remaining lease payments” needing to be paid, not just the remaining base lease payments without the rent component. (I believe this is one of the reasons they are never really called “interest” charges.) So if you are paying the full amount of rent (which is where the interest is) regardless of when you pay it off, is there actually a benefit? (Besides maybe insurance paying you instead of Toyota if the car is totaled)
Has anyone actually done an early buyout through TFS to confirm this understanding?
