Lease return coming soon?

[cossie1600]

I believe the first wave of people who got in on the Toyota lease special will have to decide on the car's future soon. Has anyone received any letter from Toyota yet? I am curious to see what they are offering. Are they offering discounts like Nissan, financing special like Subaru or just plain return the car or provide the money?

 

[TonyWilliams]

I believe the first wave of people who got in on the Toyota lease special will have to decide on the car's future soon. Has anyone received any letter from Toyota yet? I am curious to see what they are offering. Are they offering discounts like Nissan, financing special like Subaru or just plain return the car or provide the money?

Nope. I don't expect Toyota to offer anything. You either turn it in, or keep it.

 

[Gnasher]

Tony is correct. I am at less than 90-days to return mine and the dealer will not budge on the very high residual, and there are no special offers or incentives to keep it. They really just don't seem to care - or perhaps the corporate folks aren't giving them any choice. Shame as I plan to turn mine in, and then go find another one that has been sitting on a lot for a few months, with a lower price.

 

[Incredulocious]

Tony is correct. I am at less than 90-days to return mine and the dealer will not budge on the very high residual, and there are no special offers or incentives to keep it. They really just don't seem to care - or perhaps the corporate folks aren't giving them any choice. Shame as I plan to turn mine in, and then go find another one that has been sitting on a lot for a few months, with a lower price.

If you don't mind my asking, how much is a "very high residual"?

My lease is not up until October 2016 but my residual is only $19,400. So I'm currently expecting to pay it (rather than forfeit the vehicle) if only to resell it for more than that.

 

[cossie1600]

My question is what would happen if you return it. Will they offer it at or below residual? Let say your buyout price is $20K. The dealer has it listed for like 21K. Could you go in and buy it for 18K

 

[Incredulocious]

My question is what would happen if you return it. Will they offer it at or below residual? Let say your buyout price is $20K. The dealer has it listed for like 21K. Could you go in and buy it for 18K

As Tony and others have said (or found out), no, they won't offer it below the residual or the current book value. Of course they'll want to sell it for as much as they can get.

This is why I think that as long as you can afford to make the full residual payment, it makes sense to buy it and then turnaround and sell it on craigslist for the current market value. Instead of just giving up the vehicle and getting nothing back, you get whatever you can make over the residual – which may well be several thousand dollars. We'll of course see how its market value changes with the introduction of longer range EV's, but still, it's a great vehicle with little competition for anyone who wants an electric compact SUV at a reasonable price.

 

[cossie1600]

Here is the problem, we have to pay nearly $2k in taxes to buy it. It will eat into the profit considerably.

 

[Incredulocious]

Here is the problem, we have to pay nearly $2k in taxes to buy it. It will eat into the profit considerably.

Well, yes. In the end you need to decide whether what you can make on it is worth your trouble. Also, apparently in some states you don't have to pay the remaining sales tax if you sell it within 10 days, only your buyer does. Of course you'd want to line up a buyer before you completed the lease then.

What's special about the RAV4 EV is the huge discounts Toyota put in to finally get them sold (well, leased). It's uncommon to be able to lease a car that ends up being worth almost as much as you paid for it (payments + residual), and with practically no interest! Sweet!

 

[Luckyduckie]

Here is the problem, we have to pay nearly $2k in taxes to buy it. It will eat into the profit considerably.

You mean in addition to the residual amount we pay tax? This is the first time I've leased a vehicle, so not sure what will happen at lease end. I was under the impression that the residual was the TOTAL we had to pay if we wanted to keep the car.

 

[Incredulocious]

Here is the problem, we have to pay nearly $2k in taxes to buy it. It will eat into the profit considerably.

You mean in addition to the residual amount we pay tax? This is the first time I've leased a vehicle, so not sure what will happen at lease end. I was under the impression that the residual was the TOTAL we had to pay if we wanted to keep the car.

Yeah, first time for me too but I did a web search... from California State Board of Equalization:
http://www.boe.ca.gov/lawguides/bus.../sales-and-use-tax-regulations-art15-all.html

(7) OPTIONS TO PURCHASE. An agreement providing for the lease of tangible personal property and granting the lessee an option to purchase the property results in a sale when the option is exercised. The tax applies to the amount required to be paid by the purchaser upon the exercise of the option.

 

[miimura]

That's right. You pay sales tax at the time you're paying for each portion of the car. You pay sales tax on the cap reduction (including an incentives applied on your behalf) at the inception of the lease, you pay sales tax on the lease payment, and then you pay sales tax on the portion that you pay to buy out the lease at the end. Some fees may not be taxable.

 

[Luckyduckie]

So, an additional $1800-$2000 for taxes depending on where you live. Ouch!

 

[burningmay]

You dont have to wait for the lease to be up. You can also sell it before the lease is up. Just look on ebay and/or carmax and see if you have one listed to get a ballpark.

I sold my leased X5 to a MB dealer about a month before lease-up date and made a couple grand on it (actually more because had I kept it I would have had to change tires to keep it safe on the road) and used it towards down payment on another car.

 

[dwvanguard]

How much trouble will they give you for interior carpet stains, scuffs, and exterior chips at lease return?
Do they scrutinize or is normal wear and tear pretty broad?

 

[michael]

In general, when the car company itself does the leasing, they tend to be fair about returns since they want repeat business. Banks tend to be greedy about damage, wear, etc since they don't care if you buy another Toyota or not. So I would hope and expect fair treatment upon return.