First of all, I wish I had found this forum earlier so I would’ve gone into my lease with more knowledge. Took a friend’s advice that leasing through my company is the way. I honestly can’t tell if it was the correct move or not.
Leased my first vehicle in California, which was a '22 Toyota Tundra hybrid 4x2 1794 edition. I leased it through the company as it was a work vehicle but planned to buy it out once the lease ended. This made getting talked into their warranty upgrade at the platinum level easier. I kind of wish I hadn’t paid the extra 3k for it.
My residual is 44k. I put 10K down and my payments were just under 1k a month. I would consider it a low-mileage vehicle as I only have about 24k on it, and the lease is about to end in a little over 2 months. KBB shows trade in value at 43.6k-48k. KBB shows private sale estimate at 46.7k-51.2k. The dealer appraised it at 43k. The truck is very clean with no damage except for an inch-long scratch, which is visible if you know where it is on the rear passenger side door. Other than the scratch, I’d say the truck is in great condition both inside and out. Additional upgrades on my dime were OEM tonneau cover bought from Toyota and ceramic tinting on all the windows.
I guess my question is two-fold in wanting to know if I screwed anything up on the original deal and what mistakes I made so I could avoid them in the future. The second part would be to ask the veterans what the best move would be in moving forward. I’d be happy with either a buyout or a new lease but would appreciate any feedback on what the best financial move would be in terms of value. Thanks in advance.
Is this the same dealership from which you got the car? While you lease the car 3 yrs ago, I think you might want to try getting a quote from another source. Here are (lots of) ideas:
Was your total lease cost ~$49K (incl down payment and the warranty upgrade)? An internet search indicates that base MSRP for your model was ~$60K. Assuming this is correct, I think you either chose a model that doesn’t (didn’) lease well and/or were horribly ripped off by the dealership.
I would suggest taking some time to read through Leasing 101 to learn the basic concepts involved in leasing and consider working w/ one of the highly-rated California brokers in the Marketplace her (there are also broker/dealer reviews in another section), since 2 months is not a lot of time to learn this info.
I think you should consider buying the vehicle at the end of the lease if you can write off the cost as a business expense. Otherwise a new lease makes more sense. You may still want to buy the truck and sell it privately. I don’t think there is any tax incentive in CA for trading in a leased vehicle against another lease since taxes are paid monthly on the lease payment.
For legitimate biz purposes there may have been a small benefit for leasing as opposed to financing … assuming you got a good lease.
But you didn’t.
The first thing to understand about “writing something off” is often just a misnomer for an expense. What other expenses does one mentally think of as just writing something off and not costing anything—salaries and wages? Cost of goods? Supplies, hardware or software?
Expenses are expenses. They reduce profits. Treat the vehicle expense as the same as any other expense.
For your next vehicle see if the annual expense is higher on buying the vehicle and owning for 8-9 years vs consecutive leases for the same time period.
Well for starters you paid nearly 400 a month in interest alone if this was a 36 month lease, based on the rent charge. You either picked a car that had a horrible rate to begin with, had the rate marked up to the absolute legal limit by the dealership, or most likely both
Nothing you can do about the past. If it were me I would be getting as many dealer quotes as possible (buying and selling it yourself in CA has always been a no go for me). If you don’t get an offer that yields you a good chunk of equity I would just buy it and ride it out for a few years.
Well 2022 was a bit high for vehicles, so your deal wasn’t too bad per se…
If your Tundra is in great shape-just buy it and keep it, it will last a very long time plus you still have that extra warranty for it. The MMR should be around $45K-$46K
You can sell it third party Carvana, Driveway, Carmax whoever gives you the most $$$ and then contact @Cody_Carter for your next one in SoCal
Yea, I see that now. That’s pretty steep. Could I have negotiated that amount in a normal scenario.
Hate to make excuses but I got the truck at a time when there was barely any inventory on the lots, and it was a 8 month wait to get this one. The fear of having to wait another 6 months is what pushed me into it. Is the rate checker app where I can see if a vehicle has a horrible rate to begin with?
If the rate was marked up you could have attempted to negotiate it. RateFindr will give you the base money factor (interest rate) for the leasing programs in a given month. It’s shown in a decimal format (0.00035 for example). Multiplying that number by 2400 yields your interest rate (0.84% in this example). For a good lease you want to see as many zeros as possible before you see a crooked number in that money factor.
