Is this a Toyota Financial Services (TFS) lease or is it through another bank or credit union?
It wasn’t clear during the visit - I think it’s through Ally if I interpreted the salesman’s muttering.
The proportion of the lease cost that’s attributable to rent charge vs. depreciation is the last thing I worry about.
Actually, that’s not true. I really don’t care.
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.
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Complete Lease Newb here: can you explain why?
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.
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Spoke with the dealer again on options with a lower MF - the first deal was from Ally, the following from Toyota Financial Services:
MSRP: 50,328
Selling Price: 45,730
Federal/State Rebates: 7,500
Gov Fees: 170
Dealer Fees: 187.50
Tax Rate: 8.875%, “Capitalized Taxes”: TBD, will report back
Residual: 53% - 26,674
Term: 36 Mo, 10k/year
Acquisition Fee: 650
DAS: 3000
Monthly: 540
MF: .00285
Are you leasing to capture the tax credit and buy out, or planning to lease for the full term?
Do I read right the Ally lease has more incentives? 8250 vs 7500
Ally is +12% higher residual on a 39 month term vs 36
TFS MF is higher, and that lease will require you purchase GAP — check with your auto insurance to see if they offer it.
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.
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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 
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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.
Toyota doesn’t force gap…with that discount I wouldn’t worry about it. But he needs to go through Tfs on this deal for sure.
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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
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That’s a very healthy discount on a RAV4 Prime he’s got.
Just putting that in bold for the OP’s benefit. 
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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?
I don’t think you pay unearned interest charges if you do an immediate buyout.
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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?
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