Leasing vs Buying for aftermarket changes (ChadeMO, seats)

[BerkeleyGirl]

I am going to get a new 2014 Rav4 EV very very soon. I just need to decide whether to lease or buy. I did the math. With current incentives leasing is a slightly better deal than an outright purchase (I will most likely buy the car after my 3 years are up). However, I suspect I will want to add the aftermarket kit to enable fast charging, and may also want to upgrade with aftermarket leather seats. Can I do these things on a leased car without getting penalized? I don't get a straight answer from the dealer when I ask if adding the kit to enable ChadeMO will void the warranty.

 

[miimura]

Tony has stated that the CHAdeMO mod will be completely reversible. Therefore, I would not worry about the warranty in that respect. Worst case, if something serious happens to the EV system that needs warranty work, you would just have to pay some labor to have the mod removed. I would expect that a dealer is not capable of giving a good answer about this because it's up to Toyota (and their lawyers) to make the final decision about what voids the warranty.

The leather seats are clearly an improvement to the car, so the dealer would have to be really shady to penalize you for that modification.

 

[fooljoe]

I did the math. With current incentives leasing is a slightly better deal than an outright purchase.

You might want to check that math; my understanding is that leasing is a much better deal - it should be no contest whatsoever. With a purchase you get $2500 Toyota cash back and $7500 from the feds and $2500 from the state so $12.5k total off the roughly $50k purchase price. With a lease you get $16.5k Toyota cash back, $0 feds, and $2500 state, so $19k total.

The leases Dianne has advertised have basically 0 money factor (i.e. interest), so I can't imagine it's possible that there are enough extra fees or anything like that to make up the $6500 difference between leasing and buying. Long story short, if you really want to own the car outright, you should just buy out the lease - it'd be much cheaper than a traditional "purchase." But of course if you're going to lease you might as well not do that, as you'd just be forfeiting your right to hand the car back to Toyota should its resale value have tanked to below the residual when the term is up.

EDIT: Here's Dianne's thread for reference. If you've gotten significantly higher quotes for either leasing or purchasing from other dealers they're just ripping you off, as the incentives available are the same regardless of dealership. If you look at the lease prices quoted and multiply by 35 months (1st month payment is covered by the incentive) then add the residual and take out the state rebate you see that the effective purchase price from buying out a lease is $32,600 - $33,000. Contrast that to the purchase price after incentives of $37,188.

 

[BerkeleyGirl]

Thanks Fooljoe for the tips. Leases are a very new animal for me, and I'm nervous about signing up for one when I ultimately plan to buy the vehicle. After a little Google searching, I calculated the dealer must be using a money factor of around 0.0024 (I believe this equates to 6% interest). If there are similar lease rebates out there with much lower interest, then I will need to shop around before closing this deal.

Here is my math for anyone who cares to look. I didn't figure in the CA $2500 rebate, because it's the same in both cases. With the dealer rebate of $16,500 (plus a small $300 rebate for having recently rented an EV from the dealer), I was given a quick estimate for a lease payment of $565/mo over 36 months. For a residual value of $19,422 (for 12,000 annual mileage limit) and a local sales tax rate of 9%, I figured I'd end up paying a grand total of around $41,500 by the time I bought it at the end of the lease [($565 x 36) + ($19422 x 1.09)]. If I bought the car up front (for the same sales price $49,484), I would get the federal tax credit of $7500 and the smaller dealer rebates ($2500 & $300). Assuming my purchase costs for tax, license, and registration come to around $5000, I came up with a total out of pocket around $44,200 [$49,484 - $2500 - $300 - $7500 + $5000]. Leasing is cheaper. Though maybe it could be even better with lower interest...

 

[BerkeleyGirl]

on a side note - apologies. I think this post is not in the correct section of the forum but I didn't know how to designate that.

 

[riderbike37]

You should be able to get a much better lease deal. My total cost from Berkeley Toyota with a $0 down unlimited mileage lease is 487.27 x 35 = 17053.75. That includes all taxes/title/fees/first monthly payment, I literally signed my name and drove off with the car. Add the current residual of $18,429x1.09(tax) = 37141.36. The lease was calculated with a negotiated purchase price of $48,665.

I think the money factor applied was something like .0011 or $19.99 for the 36 months. The exact figure varies based on your credit.

Leasing also gives significant protection in the event your battery degrades in a manner not covered under warranty or the car is worthless after the next battery technology comes out.

Oh, if it's helpful, my lease buyout at this moment is $34,592.09. I haven't paid a cent yet on the car, so I believe that represents the effective purchase price.

 

[miimura]

Also, if you're planning to buy out the lease, go for the unlimited mileage lease. It will increase your monthly payments, but lower the residual. The net effect is that you pay a small amount as a security blanket just in case you drive more than you think you will AND you end up giving the car back instead of buying it out.

 

[fooljoe]

Yup, sounds like whatever dealer you've talked to is just trying to rip you off; you need to shop around. Dianne's pricing at Carson Toyota basically sets the standard for what Rav4-EVs should go for, so if they can't match that go elsewhere or even buy from Dianne and have it shipped. I think Dianne mentioned in an earlier post that her money factor was something like .00001, but perhaps that could've changed or could be dependent on individual credit, etc. Riderbike37's deal looks even a little better than Dianne's so I'd definitely try Berkeley Toyota (if it's safe to assume your name implies your location. )

Whatever the case it's clear that leasing (especially from an honest dealer) is the better deal, and it comes with the added benefit of being able to turn the car in if it may have a lower resale value than projected. By the time your term is up Tesla should be out with the Model III and could possibly also lower prices on the Model S and X so you might decide you want to go that route rather than keeping the Rav. And I wouldn't worry about adding the CHAdeMO adapter when/if it's ready or making any other mods - worst case you can just buy the car, which you plan on doing anyway.

 

[BerkeleyGirl]

Thank you all for great advice.

 

[rickrides]

Call Gim Chu or Damien Burns at AutoNation Toyota in Hayward and tell them you want Dianne's deal. That's what I did. No hassle.

Rick

 

[jimbo69ny]

You should be able to get a much better lease deal. My total cost from Berkeley Toyota with a $0 down unlimited mileage lease is 487.27 x 35 = 17053.75. That includes all taxes/title/fees/first monthly payment, I literally signed my name and drove off with the car. Add the current residual of $18,429x1.09(tax) = 37141.36. The lease was calculated with a negotiated purchase price of $48,665.

I think the money factor applied was something like .0011 or $19.99 for the 36 months. The exact figure varies based on your credit.

Leasing also gives significant protection in the event your battery degrades in a manner not covered under warranty or the car is worthless after the next battery technology comes out.

Oh, if it's helpful, my lease buyout at this moment is $34,592.09. I haven't paid a cent yet on the car, so I believe that represents the effective purchase price.

Damn! I wish I could buy one for $487.27/month. My PIP payment isnt much less than that. I live in Ithaca NY and there is no way to buy a new one. grrr

 

[BerkeleyGirl]

Call Gim Chu or Damien Burns at AutoNation Toyota in Hayward and tell them you want Dianne's deal. That's what I did. No hassle.

Rick

So many good suggestions, but after calling Dianne to make sure I understood the details for her deal, I just decided to get the car from her directly. Signed all the papers and fedexed them this afternoon. Very excited - I may even have my car by Friday! Now if I can just figure out how to create a signature on this forum thingie...

(IT challenged but soon to be the lessee of a) 2014 Rav4 EV / Shoreline Blue / VIN# 3022

 

[Syrinx]

Call Gim Chu or Damien Burns at AutoNation Toyota in Hayward and tell them you want Dianne's deal. That's what I did. No hassle.

Rick

So many good suggestions, but after calling Dianne to make sure I understood the details for her deal, I just decided to get the car from her directly. Signed all the papers and fedexed them this afternoon. Very excited - I may even have my car by Friday! Now if I can just figure out how to create a signature on this forum thingie...

(IT challenged but soon to be the lessee of a) 2014 Rav4 EV / Shoreline Blue / VIN# 3022

Congratulations! Welcome to the club

 

[Tadol]

Good call - tried pretty hard to buy mine from Berkeley Toyota ( just like the last 4 Toyotas I've tried to buy from them ) but once again, they just weren't interested - couldn't even get a return phone call. Dianne made it super easy, and had my car super quick. The next mistake I made was to take it to Berkeley for its first service. Ended up not getting any update - not even sure they checked the tire pressures - they had a dead unit in the shop, said the update was buggy and problematic. Next service is going to Walnut Creek - I've read a couple good things about their service - hope its true -