I’m a Southern California buyer looking to lease a 2023 Prius Prime SE and then buy it out. I’m particularly interested one at MSRP and getting the $4,500 Toyota Lease Cash EV tax credit pass-through and, perhaps, the CVRP if it’s still funded.
As somebody in my late 20s, I’ve never purchased a new car before. This is very exciting to me, but I’m concerned I may get taken advantage of by a scrupulous salesperson or unknowns on the paperwork.
That said, my question would be: How much money am I saving by getting a lease and immediately buying it out vs paying cash outright? Are there fees and interest that eat into the $4,500 and cancel it out?
Your help means a lot, and any information you can give would be tremendously helpful. From what I’ve read from @Cody_Carter on a similar thread, it be residual plus aqc+plates+doc. How much is that actually on a $34,000 MSRP car when the lease is all paid off? Also, is every lease from TFL the same in this regard? What will the process look like step-by-step?
Thanks @anon65069371 - so for example, on this lease:
Get $319 for a 36 Month Lease on a 2023 Prius Prime.
Qualified lessees can lease a new 2023 Prius Prime 2WD 5Dr. Sedan SE Hybrid CVT-F Model 1235 for $319 per month for 36 months with $2,999 Due At Signing. Based on 12,000 miles/yr. Security Deposit waived. Lease includes $4,500 cash incentive and excludes tax, title, license, registration fees, and dealer options and charges.
Terms available on approved credit through Toyota Financial Services (TFS) at participating Toyota dealers. Not all customers qualify. Lease example based on 2023 Prius Prime 2WD 5Dr. Sedan SE Hybrid CVT-F Model 1235 with **TSRP of $33,779, net capitalized cost of $27,371, and a lease end purchase amount of $21,619. $2,999 Due At Signing includes $2,030 customer down payment, first month’s payment of $319 for 36 months, and $650 Acquisition Fee. Security deposit required with exception of prior Toyota Financial Services (TFS) financing history and/or TFS credit rating in which a security deposit may be waived. Tax, title, license are extra. $4,500 cash from TMS must be applied as a capitalized cost reduction (down payment) that is excluded from due at signing; no cash back option. Dealer contribution may vary and could affect lease payment. Individual dealer prices, monthly payment, and other terms and offers may vary. Must lease from participating dealer’s stock and terms are subject to vehicle availability. Lessee responsible for maintenance, excess wear and use, and will pay $0.15 per mile for all mileage over 12,000 miles per year. $350 disposition fee is due at lease end.
Why is the net capitalized cost $27,371? Is it basically $33,799 [MSRP] - $4,500 [Rebate] - ($2,030 [down payment] - $319 [first month]) = $27,588?
Let’s say I get the car: I pay the $2,999 which covers the down payment, first month, and Lease Acquisition fee. Do I still then have to pay $316 x 35 months + $21,619 Lease end purchase amount?
My net spend would then be: $2,999 + $11,060 + $21,619 = $35,678, right? Is the $4,500 lease cash baked into this price already or would it be subtracted from this (making total spend $31,178 + tax).
I doubt that you can lease the Prius Prime SE or $316/mo, my guess would be maybe $5xx+ as these don’t go for MSRP but a bit over and that $4500 is a wash pretty much… you won’t pay the $316x35 months if you buy it out immediately as that number would include rent charge and would be less or whatever the residual, fees, etc will be when you buy it out (in month 2 per se) plus CA tax.
As for CVRP it is on hold and you will be placed on a standby list as of Sep 6th
Thanks @BYGFEET - I may have a lead on an MSRP Prius Prime… let’s see what happens.
So, does this sound correct for total price for the Prius Prime?
Down payment: $2,030
First month’s payment: $319
Acquisition fee: $650
Lease buyout price: $21,619 ← is this the same as residual?
California tax + DMV fees
Disposition fee: $350
$2,030 + $319 + $650 + $21,619 + $350 = $24,968
With California tax: + $1,935.52 = $26,903.52
This seems a bit low when the standard MSRP - $4,500 is $29,279 before tax. I didn’t add any of the lease payments as you mentioned I won’t pay that? Instead of 35 x $316, is there another cost in its place that doesn’t have the rent factor included?
I’m probably missing something… thanks to anyone helping tackle this.
You still owe that “hypothetical” $319x35 months or $11K but it would be less rather, because of the calculated rent charge-which you don’t pay if you buy out the car (only the rent charge is not paid) the rest you still owe something like $34,000-$4500+all fees and taxes, yes close to $30K would be the RV balance if you decide to buy out within month 2
Lease buyout price: $21,619 ← is this the same as residual? THIS IS YOUR BUYOUT AT MONTH 36, YOU NEED TO ADD ALL PAYMENTS NOT MADE TO THIS NUMBER
If you have all the info from this MSRP “deal” plug it into the calculator and see what you get
So with my guess what the payment should be according to your numbers as close as I can get-the depreciation is roughly $195/mo and Rent Charge is $159/mo plus tax
Do check with edmunds forums for more accurate MF and RV on the car with your ZIP code
@BYGFEET That’s very helpful. It seems like after the lease acquisition fee (-$650) and Disposition fee (-$350), I’d still come out around $3,500 ahead buying out the lease and financing that, vs financing outright.
Total cost after everything, like you mentioned, would then probably be around $34,000-$4500 + all fees and taxes = around $32,500-$33,000. I think that’s reasonable for a Prius Prime!
Are there any other typical fees to know about here (i.e. destination fee, etc?)
Also, has anyone that sees this done this to capture the ev tax credit?
If you can get one without MARKET ADJUSTMENT over MSRP then yes, it’s not a bad deal to lease for the credit and buy it out immediately
As for ev tax credit, if you’re referring to Federal tax credit-Prius doesn’t qualify.
Hopefully it can happen at MSRP. That’s realistically the only way I’d do this.
That said, I’m specifically referring to the EV tax credit lease loophole - Toyota gets the Federal tax credit on the Prius, even though it’s not built in the USA / have USA sourced batteries, since it’s considered a commercial vehicle at the time it’s owned by the leasing company. They voluntarily pass part of the savings to the consumer in the form of lower capitalized cost on the lease and lower lease payments.
Without the EV tax credit, the 2023 Prime loses most of it’s value proposition over the normal Prius, but with the money off it’s a much better deal. They seem to be periodically renewing the $4,500 off, so hopefully it continues.
Yes, for leasing the $4500 incentive is that fed. tax credit from TFS but when you purchase it doesn’t qualify, you only get this when leasing as you stated above… so lease then buy out
Again, I don’t think you will accomplish this at MSRP but hopefully you will good luck
Hi @Jrouleau426 - good to know that is the case. In my situation, I won’t be able to buy for another few weeks at least. The current lease cash offer expires October 3rd, but it has expired before and Toyota seems to be continuously renewing it. If it’s renewed until November that might be the chance.
I don’t know why they’re even offering it in the first place. Not really hard to sell these. So I could def see it getting discontinued, I didn’t think it would continue this month but it did.
@lolamir Great to see you’re going down that route too. I hope you can find one at MSRP. I’d be very appreciative if you wouldn’t mind sharing the total costs after you pay the lease off.
good luck