Hello all,
I’m helping my parents with their next lease. They have a 2018 Toyota RAV4 LE ending in August with a residual value of $17k. They hardly used the vehicle so it only has 6k miles and it’s in excellent condition. Looking at KBB, trade in is at 25k and private party is at 27k. They wanted to just turn in the car to the dealer, but I told them not to because the car has equity because of the low usage. Am I correct? What are my options? Should they purchase the car and resale? Since they’re looking for a new lease, can the equity in the car be used as a down payment for their new lease? TIA.
First option is to find a 3rd party dealer that’ll buy it out. Try carmax, etc
Some of those dealers won’t buy at the end of the lease or have reported issues buying out from TFS. If you want to sell to one of them, you can buy out the lease and then resell. In CA, there is a process for being exempt from sales tax on the buy out if you resell within 10 days. Third Party Lease Buyout
Whatever you do, don’t just turn it back in.
6 Likes
Get a price from Carmax/Vroom/Carvana (use their app)
then go to the local Toyota dealer and see how much they will pay (Do NOT let them try to sell you a car that day, they will bury the equity in dealer shenanigans). If they will pay close, then sell to the Toyota Dealer (Which TFS allows).
Toyota Financial Services (TFS) will not let you direct sell to Carmax without a lot of pain.
2 Likes
What kind of pain is TFS giving you? This is my plan as well as I have 2 months left on my lease and I was trying to get that equity
They won’t allow you to sell to 3rd parties at all.
- You buy it
- You pay sales tax (Except in CA under certain situations)
- You wait for title
- You then sell it for whatever it’s worth after all that time.
That sounds painful to me.
This is false. I recently sold my TFS lease to Shift without any hassles. They only request a 3-way phone call with TFS and Shift for the pay off quote authorization.
3 Likes
How recently? These things seem to change in real time.
GMTV reported a week ago that TFS won’t let them buy.
What they say and what is actually happening can be two different things.
E.g. Vroom are not buying much right now apparently because of their own situation. They tried to blame it on TFS when in reality TFS was still selling to third parties.
Do you have any independent corroboration of TFS not selling to all third parties?
3 Likes
May 20, but I was also hearing the same chatter about TFS. I guess it depends on the 3rd party you are working with.
Thanks everyone for the reply. So it looks like a lease buyout from a 3rd party is the best way to go. I just have to check with TFS and the 3rd party, correct? Negotiating for the equity to be used in the next lease is not recommended?
This is only if you were to trade and lease directly from the same dealer. It’s all in one a bad idea.
Get quotes from multiple 3rd party dealers and make it clear that the bank is TFS. Let them determine if they can work with TFS. If not, the equity might be worth your time buying out and selling again, if Toyota disallowed third party buyouts.
1 Like
No Pain, No Gain. It sounds painful but others have taken advantage of it and the reward seems to be well worth it.
1 Like
Your new lease should be negotiated independent of any conversation about a trade. If, after negotiating that, you wish to see if the dealer is interested in your trade, that’s fine, assuming you’ve already worked out what it is worth with multiple offers. At that point, it’s no different than putting cash down, which has its own pros and cons.
1 Like
This topic was automatically closed 60 days after the last reply. New replies are no longer allowed.