How to Lease a New Car: Leasing 101
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- เผยแพร่เมื่อ 28 พ.ค. 2024
- Want help knowing how to lease a car, benefits of leasing, and concerns about leasing.
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I don’t know why people get so “anti lease” you don’t “own” the car you financed until you make the last payment. How many people stay in their 60-72 month loan for the long haul?
I've never really understood that one either. I get what people are trying to say though. You want to "own it" and not "rent it." However, if you skip 3 finance payments, the "real" owner (the bank) will make sure your car is taken from you. According to statistics from Southeast Toyota, the most common finance term before trading in or buying it is between 33-36 months. This feeds into the logic of leasing. People want to upgrade to the newest technology, body styles, and safety features.....
Practically everyone who buys a Toyota; they're built to last.
I have always been anti lease, but I'm the moron who traded in 4 vehicles and have had negative equity more than once. I should have been leasing.
People who are anti lease probably just buy the car without financing ,and that pretty much my way of doing it, (that's probably due to high interest rates over here though)
Too much pride lol
Great video. Thank you for the tips!
Thank you. Extremely helpful.👌🏼
Thanks for shedding clarity on this subject. I have never leased before but wanted to know more about it and now I feel better prepared to make a decision.
thanks for this video it answered a lot of questions I had when I go trade in my car . this video was very helpful
Thank you! Very helpful
I appreciate this video great knowledge
Thank you. Very helpful.
Very good information cleared up every question I had get straight to the point
Very detailed explanation on leasing options. Thank you for the clarity!
Thanks for the compliment! It's really tough to explain leasing. The benefits are really things like lower monthly payments than traditional financing, and choices at the end of your lease. It's not for everyone, but for lots of people, especially those that enjoy a new car every few years (for many different reasons), it's a really solid choice. It's just a scary choice, since a majority of people just haven't ever done it before. Thanks for watching and hopefully subscribing...Jeff
Yes, thank you Jeff. Unlike the "chevy dude" who says we shouldn't negotiate the money factor because the dealer needs to make money. So, If I have a 800 credit score, I should just let them give me any number they want smh
There is only one legitimate leasing option: buying.
Thank you!!
Exactly what I wanted to know about leasing, and a clear and well-organized presentation! Thank you!
That was an excellent explanation and presentation of what to expect when you lease a vehicle.
I must say being a person who ask a lot of questions and do my homework on everything I'm purchasing your rite on target with what your explaining to consumers.
The moral to this story is if your gonna lease you must do two important things that will give your pockets a piece of mind at the end of your lease term and that is to purchase the protection plan and unlimited mileage if the dealer offers it or just don't go over the miles and you'll have no worries at the end of your lease.
great video! thanks!
Great vid thanks !
Thank you so much...Wish I could work with you. I love Camry...Don't have too many people that try to work to build a ongoing relationship.
Great explanation , I'm thinking of leasing a car now actually. Now i know what questions to ask. Thank you!
Great video 👍👍
You’re awesome to listen to! You should be a teacher. You explained this so well! Thanks will def stop by.
Thanks so much Serena Williams.....I appreciate the compliments.......good luck with tennis! Jeff
Thank you this video helped a lot. Now I'm more confident with leasing a car.
wow, that was great
Thank you so much. I want to lease an BMW X5 and don't know much about leasing...Thank you. I will still research much more.
You're totally welcome Archie! Thanks for watching and I'm glad you got something positive out of it! Good luck with your BMW that you get :)
Toyotajeff where are u located? looking to trade in my 12 Camry se and possiblky lease a new car?
AMAZING VIDEO!
Appreciate your advice,so it makes sense to just get the basic 12 k annual mileage if I know ahead of signing that I’m going to either buy My trd Tundra or trade it in for a newer Toyota model at the end the lease.
Great video! lots of helpful information. I am thinking about leasing a new MINI Cooper and I was wondering how the sales tax and registration works on a leased car?
You nice man sir thanks
Good video!
YOU SHOULD MAKE A VIDEO ABOUT HOW TO GET OUT OF A LEASE INTO ANOTHER LEASE AT THE SAME PAYMENT
This is a REALLY good suggestion! I'm putting this on the list of upcoming videos...thanks a lot!
Yes please!
Realtime Reviews : I'm leasing a Vehical right now that the residual value at the end of the 3 year is 29,000. what are my option because I don't want to finance that money so I would like to trade it in but what dealer is going to break even with that amount.I'm only leasing about 10,500 on a 2015 BMW 328i xdrive.
Mr. Hitdat71 ... Most dealers will cover all costs (wear & tear, excess mileage and disposition) as long as you're a returning customer and you're near your lease termination...
@@Toyotajeff How about that video? Use a forerunner as an example. :)
video is great
quick question; this would really help me. if im trading in my ACURA lease; do they also forget the overmileage?
Very very good!!!!!!!
We're about to turn in our lease car. I want to lease another make at a different dealership. Is there any problem turning it in at a different dealership than where I leased it from?
great video - one question please: why is the money factor a multiple of 2400? I understand everything else but the 2400 figure
If you up the miles per year does that reduce the residual value of the vehicle?
Whats up Fred. Thanks for the video. Ignorant us needs education on this leasing matter.
Not really so much ignorant. I work with these numbers and scenarios every day and week. Most people only get new cars every few years at the most. Some don't buy a new car but every 10-15 years. A lot of mystery around leasing. I'm making an updated "leasing vs. financing" video in the next couple weeks. I hope it helps...jeff
You forgot to factor in a very very important factor, which is the equity at the end of the term. After buying for 3 years, you can sell it for, let’s say, 10,000 instead of paying 10,000 to buy the rental. This is huge.
So I have a tc that i finance about a year and half ago, in that case is it possible to lease for a frs even if I still owe towards the tc? Toyotajeff
Hello Jeff. I recently bought a 2021 Toyota Highlander XSE in NYC. I was able to use the First responder rebate and enter the Toyota shield program. It helped somewhat but I still think the lease was hefty. I am paying 450 a month for 12,000 miles for 36 months and gave 3500 down. I felt I could have gotten cheaper but I went to many different dealers in the northeast and see prices up to 490 a month. After hours of negotiation, I got 450.
Hi Jefferson! Congrats on your Highlander!! My advice is not to even think about the deal you negotiated with your dealer. Nothing good will come from second-guessing yourself. Enjoy your new ride!!! Jeff
@@Toyotajeff I agree I checked a lot of car dealers and different prices. I think the car doesn't have the JBL but it was 43K in total. It did have the weather package but don't know about the key start only the remote app.
@@jeffersonperez1525 sounds great!!
@@Toyotajeff The only thing I wish the XSE highlander would have the better rear view camera and better third-row other than that great drive. also saw the XSE video learned alot.
the problem with Leasing is (for me anyway) is that I drive 15K to 20K miles a year and lease are no good for that type of scenario
Not true Lee. Actually if you drive 20k or even 35k per year, you SHOULD Lease. Just buy the miles up-front. Remember, your car depreciates the same with miles no matter how you pay for it so why not mitigate the risks.
Leasing is great for a lot of people. I think the way he portrayed the "who owns your car" question with a little bit misleading, though. The point of financing is, after however many years it takes to make your last payment, you own the car and have totally eliminated a recurring monthly payment. Congratulations, you can now use that money for something else more productive than paying for a depreciating asset.
Great video..new to leasing so learning a lot. Can the taxes, government fees and others be included in the monthly lease payment? Advertisement of car dealership says "$$$ down is required " - what does this consist of?
Some car brands are not worth buying. I own a car but I def will lease my next car. It just make sense for me and my family. I don't really mod my cars anyway. Tint and maybe some new wheels and that's about it. These cars are just not work buying. Great information.
Hey There ! I’d lease a Highlander almost a year ago , now if i want trade it in with another vehicle before my lease ends , how do these things works ?
Thanks so much for the information. We ended up leasing our 2018 Camry last week. We keep our cars in excellent condition and average about 10,000 miles a year. . However we signed up for 15,000 a year just to be safe . We leased a Camry LE my monthly payment is $297.00 for 36 months well below our budget if we purchase it would have been about $379.00 . Thanks again for your advice. By the way this is our first lease. .
Mickey PH!: Just keep in mind, you are not necessarily 'being safe' by purchasing that many more miles (more than what you anticipate using). What you are basically saying is that this car will be worth LESS at the end of the term (because it will have more miles on it) therefore driving the residual value down and increasing your monthly payment. You can never get that money back. What you might want to do is look in to what the market value is at the end of the lease with the miles on it (lets say you drove 9k miles per year for 3 years - your car has 27k miles on it) compared to the 45k miles you paid for. If the market value is greater than the residual value, you can sell that car, pay off the lease and obviously pocket that difference. Otherwise, you are just giving that money away.
What is the GAP insurance do?
Thank you for making it simple and step-by-step. Question: can you put a down payment on a lease with a credit card even if you have excellent credit?
Hi Nancy and great question! The short answer is YES! The longer answer is that each dealership has their own rules on how much you can put down on a credit card. For example, my dealership allows up to $2000 on a credit card. Thanks for watching and subscribing....have a great day! Jeff
Woo hoo! Thank you for your prompt reply. One more question, if you don't mind: does your dealership do deals online strictly and do you deliver cars after completing a deal?
Hi there! We do a combination of both walk-ins, phone-in customers, service customers, and internet customers. Nearly all of our deals are completed at our dealership in Raleigh. In rare instances we can deliver to our customers :)
THANK YOU FOR THIS VIDEO I WANTED TO BUY THE MAZDA CX3 BUT I CULDNT AFORTH THE MONTHLY PAYMENTHS UNLESS I DO LIKE A 6K DOWN WHICH I DIDNT WANT TO .
BUT THE LEASET IS PERFECT NOW LOW DOWN AT SIGNING AND LOW MONTHLY PAYMENTS . I WILL JUST MAKE SURE TOO BUY THE. CAR AT THE END OF THE LEASE SINCE AM SURE I WILL GO OVER THE MILLAGE
THATS my thoughts, that WAS my thought, I leased a 2019 Prius last year with payments of $191/mo for 36 months, the residual is around $16K, which in 3 years I was going to just buy...but a steel beam came flying off a truck in front of me and the car spent 6 wks in repair with $7K of damages. I'm wondering if I can negotiate the residual down now that the car has damages IF I want to buy a damaged car. My point, ask how much your residual will be if you get damages and then ask yourself if you can afford what the payments will be in 3 years if your financial situation doesn't change. I wished I would have kept the car I had and not gotten into a lease. I don't know what is going to happen when I return the car in 23 months.
@@yorkiem0m oh nooo am so sorry to heard that. I hope you don’t have any issues at the end of the lease .
I ended up buying the car not the lease option.
@@chaveznury I think that was wise. Lease is scary.
I traded my lease 2yr mark. Is that bad ?
What if you're like me and you maybe only drive 5,000-8,000 miles per year, will that affect the residual value or is 10,000mi/year the lowest amount that is factored in?
For instance, when doing lease calculations on manufacturer and dealer websites, the lowest possible option I can ever choose is 10-12k miles.
terms are factor set by manufacturer they have them preset so you can choose one.
In Canada the most common lease amortization is 5 years or 60 months. to finance is average 84 months sometimes 96 months. only 2% of Canadians are stupid enough to buy cash.
3:45 this is cap! I got robbed of $6000 because I “gave it back”. I literally asked how I take advantage of that equity an they said I “have to buy a car today”
NO! All I had to do was say “inspect my car an tell me what you’ll pay for this car” That amount, minus the buyout/residual amount, an you have your equity. Which you can choose to use on a new lease or buy purchase or leave with the cash. With 3rd party restrictions you can still shop dealers who want to add that to their inventory. With no restrictions, feel out online sites to see what they will offer an pick best offer. Either way always use that as a guide to know the cars worth before walking in to a dealer oblivious, an never just drop the keys off when you have equity.
Robbed by Kia, not this guy or company lol to be clear
"You are going to be driving your car for the best years of its life! --- TRUE. You're also going to be taking the MAXIMUM hit in depreciation during those three years, then turning around and doing it AGAIN with your next lease. Have fun with that. Don't confuse "lower monthly payment" with "lower cost". Did you notice that even though the money factor was small when the video was made, it's still higher than the APR on a purchase? They don't like to talk about that. Instead, it's always "more car for the payment". Notice how they also always play up the UPSIDE of the equity potential? It's not always going to work out like that. I'm not trying to talk anyone out of leasing if that's what you want to do, but please go into it with your eyes wide open. Have you noticed how many dealers are making videos like this telling people that leases are the best way to go? Ask yourself this: Why would they do that unless if was better for THEM? It's all designed to keep you in payments for the rest of your life. That's a lot of depreciation to pay for, and YOU are the one who's going to pay for it.
Hey jeff, what if a person has bad credit, what is the requirements to be considered for a lease,
Great question thanks! At most dealerships they can give leasing enhancements based on your Credit Rating Tier. For example, most leases you see on TV are either for a 720 score and above but may be down to a 680 and above. At my dealership, we can work with folks who have credit challenges and can usually offer leasing all the way down to a 600 credit score. People in that score range can still get approved for leasing, but it might be at a higher monthly payment due to the higher perceived risk by banks. If you are below that score, leasing probably isn't the way to go just yet. Thanks so much for watching! Jeff
Toyotajeff yes so what if your credit score is bad and you put down around 3,000 ?
great video, thanks! subbed.
Thanks so much Roy! Have a great day!
What about if you have great credit, how does this help you as far as leasing a car,on monthly payments, do you get a lower monthly payment, without putting money down?
hi toyotajeff how come I see some car dealers says 99 dollars per month dollars with 0 down on lease. is that's just to get people to come to the dealer and trick them ?
Hi Ach! Sometimes yes. Always be cautious of any advertising, whether it be cars or electronics or any product. At my dealership we like to customize each leasing deal based on what customers want. In other words, maybe their lease payment will be $300 a month with $0 down.....or if they put $1000 down, their payment will go down to $270. Customer can choose what's best for them. I hope this helps....jeff
He said “I could use all the fans I can get “ 🤣🤣🤣
I would like to lease to 2017 GMC Terrane in Illinois
Sounds great! I hope my video helped you out :) Jeff
So you are about to do two dumb things in one shot - lease and gm.
Good luck!
I have 117,000 miles on my lease. I use it for Uber and put 60,000 miles a year on it
Hi, I know is kind of late but I would like to know how much can be(average) lease a 2018 highlander limited. Planning to put like 3k-4k and see if I can get my payment lower than $400. Really nice channel, thanks
Thanks for the compliment Jose! I’m glad you’re enjoying my channel. I’m on a plane right now so can’t figure out your payments. It will be difficult to get your payment lower than $400 even with 4K down...Highlanders don’t have the most optimal leasing rates for some reason. I will let you know if I’m wrong there....jeff
Here is how you compute a lease payment. It is simple math. You will need:
Capitalized cost. This is the selling price (which you negotiate) plus any other items like sales tax you wish to include. This will be reduced by any down payment, but a down payment on a lease is ill advised. For example, the cap amount is $30,000. Always negotiate the price of the leased vehicle. To the dealer a lease is just another sale. They sell to the leasing company (usually the manufacturer's captive finance like Honda Finance) at the price you negotiate.
The residual value. This is set by the manufacturer as a percentage of MSRP. For example, MSPR $32,000 and residual percentage of 55% equals a residual value of $17,600. This is not negotiable. But always ask the dealer to show you the actual numbers.
The money factor. This is the interest rate divided by 2,400. For example, .0009 which is an interest rate of 2.16%. This may be negotiable. Always ask to see the manufacture's lease rates. Dealers like to increase the money factor which means more profit.
The lease term, usually 36 months.
With these numbers, the lease payment would be:
Cap cost less residual value divided by the lease term. So, $30,000 - $17.600 = $12,400/36 = $344.44 a month.
Cap cost plus residual value multiplied by the money factor. So, $30000 + $17,600 = $47,600 X .0009 = $42.84 a month.
This makes the total monthly lease payment $387.28 ($344.44 + $42.84).
Knowing and using this math will ensure you do not get scammed by the dealer.
William Vann Hi William! Great summary. Glad you wrote it out this way....jeff
Also, a basic rule of thumb is on a 36 mo./12k per year lease, you should be able to take the MSRP and divide it by 100 and that's your payment. That would be a good deal. And, why would you settle for anything but a good deal? So if the MSRP on the Highlander you want is $40k (which I don't think it is), then it should be about $400 with no money down (that is except for 1st months payment, acquisition fee, doc. fee and reg fee). Your payment decreases by about $30/mo. for every $1k you put down. So, in your scenario, if you put $3k into it, roughly half of that would be your down payment. So that would impose your payment by about $45. So it is feasible, for you, to lease a Highlander with an MSRP of $41,500k for $400 per month with $3k out of pocket/due at signing. (I think a Highlander Limited is more than that though...you'd have to find a dealership that is willing to discount the vehicle as well as and/or some manufacturer lease incentives)
If I decide to keep the car at the end of the lease, can I negotiate the residual? Thank for the video. Very informative.
Great question and thanks for watching. The residual is set by the manufacturer (Toyota, Ford, Hyundai) when you first lease it and that stays the same. It isn't a negotiable factor. Have a great day!
The residual will stay the same, but he “forgot” to mention that you can negotiate the price of the vehicle before you sign the papers.. don’t get suckered
Very clear video.
I been learning a lot about leasing , can be a very viable option.
Winks
Lisa
Lisa Lovely LPA what are you thinking about leasing?
Jeff, just another question: What about the $ amount due at signing. Some dealers just ask what amounts to 3k to 4k. What happens to that amount? Is that negotiable?
Great question Aldo! This is the part where there is confusion and miscommunication a lot of the time. You can really customize the lease how you want it. For example, you can put $0 down and your monthly payment might be $330, but if you put $1000 down it will be $300 a month, and if $2000 down it will be $270. With Toyota, this monthly payment difference amounts to just about $30 per thousand you put down or don't put down. I hope this helps....Jeff
The other part that is confusing is the car manufacturers' national lease ads.....ie. $199 a month with $1999 down!!!! Those ads never take into account extra fees like sales tax, DMV fees, and a dealer documentation fee. It usually ends up being something like $199 a month with $3500 down OR $250 a month with that exact $1999 down.....just an fyi
Toyotajeff in Raleigh thanks! I will subscribe!!!
Thanks so much! It's nice having you in the "channel family!" Feel free to post with topics you'd like me to cover in future videos. For example, I'm considering making a video series called "how to buy a new car"...it will have multiple parts. What things would you like to have covered, or what questions would you like to see answered? Jeff
A lease includes several parts. These are the capitalized cost, the residual value of the leased vehicle, and the money factor.
The capitalized cost is the selling price of the leased vehicle less any down payment plus any additions such as registration. You should always negotiate the price of the leased vehicle exactly as you would if you purchased the vehicle. To the dealer a lease is a sale. The sale is to the leasing company at the price you negotiate.
You should never put anything down on a lease unless your credit is poor and the leasing company, not the dealer, requires a down payment. You can look this up on GOOGLE.
The residual value is set by the leasing company and is not negotiable. It is typically a percentage of the MSRP and does not change due to the selling price.
The money factor is a sketchy issue. It is no different than an interest rate if you were to purchase the vehicle. In fact the money factor is simply the interest rate divided by 2,400. As with an interest rate, you should always demand the dealer F&I manager disclose the leasing company's money factor. Dealer F&I managers usually like to pad the money factor a bit to increase profit. This is called dealer reserve. The way dealer reserve works is the leasing company (Honda Finance for example) will provide a money factor for the buyer. This will be based on the buyer's credit profile.
For example, the leasing company may offer a money factor of .0009. The Dealer F&I manager my pad this to .0011. Guess you earns the extra interest as profit? Right, the dealer.
Is this correct GAP insurance is covered standard for toyota leases?
yes that's correct, at least in Southeast Toyota region where I'm from. GAP is included by law in leases. Thanks for watching and hopefully subscribing! Jeff
Not in NYC.
@@Solosmooth yeah man must be all regions are different with that....take care! jeff
What if I leased a Toyota vehicle and I am at the end of my lease but I want to trade it in for a different brand, can I do that? Or does it have to be a Toyota name?
How would refinancing work with the lease end residual value?
Find the best loan rate, and pay it off...or, better yet, end your lease, and get a new problem free car as a replacement, with all maintenance paid for...start a business, and write it off 100%, as a "rental".
Do not put a down payment on a lease, ever.
You left out that any down payment put down on a lease is taxed. Most dealers have a lease termination fee attached so you have to pay to terminate the lease.
Term fees are typically $250-$350. just check the contract. you will only pay that if you dump it off too. not likely you'll do that as most dealers and manufacturers have pull-ahead programs that will get you out of the car 3-6 months early at no added costs.
Good video. So let me get this straight. The dealer quotes the residual value? So in your scenario the residue value is $13,000. I'm Throwing numbers up, At the let's say 33rd month on a 36month lease the payoff if I desire to trade the car which the payoff is $11,000 and my car is worth $15,000 that would put me to have equity. So my question to you is do I have $2000. Or $4000. In equity? If so please explain that scenario? I might be explaining it wrong so I apologize. There's not many videos out there that explains the equity part of a lease, residual, payoff etc.Thanks
Thanks for your comments and compliment! Great question. With 3 payments left on your lease, you have 2 main choices if you are getting another car (take it as a trade-in or you can include the final 3 payments into your next lease/buy deal) -- I like to go with whichever option works out best for a customer's budget. If we take it as a trade, with the payoff being $11,000 and you said the appraisal we do is $15,000, then you have $4,000 in positive equity to use on buying/leasing your next car. Let me know if that helps!
And you're totally right -- I watched a lot of leasing videos, and either they didn't include the main terms or they did and they were just so confusing it wouldn't help anyone. I hope mine is a good mix -- it's actually a pretty tough video topic to make :)
Not sure I understand your question. How would your payoff be $11k? in the 33rd month of the lease, you would owe the final 3 monthly payments of the lease as well as the agreed upon $13k residual value. If you wanted to sell your car at that time, (let's say your monthly payment is $350) your obligation would be $14,050 (the remaining monthly payments + the residual value). Also, most manufacturers now have a disposition fee. Essentially, a fee when you turn your lease in. Usually around $400. So, in total, you're obligation would be $14,450. If your car is worth $15k and you can sell it for that, yes, you can and you would make $550.
Thanks lots of great info. You covered purchasing extra miles on a lease, but is there monthly savings on a lease if you stay under the standard 12,000 miles/year?
snakemonkey555 that is an excellent question. Technically no you don't save any money back from the manufacturer. However if you trade in your car at the end of the term it will be worth more because it has less miles
Toyotajeff Thanks Jeff, not only do I appreciate but respect Yoytubers that reply to a comment. The reason for my question is that 90% of our driving is city and we average about 8k miles a year. And we've never leased. But seriously going to this time.
Yeah I totally get that! Good luck with your lease!! Jeff
Toyotajeff thanks. BTW which state are you located?
Anytime...I'm in North Carolina in Raleigh....you never know...maybe we're close!
I know I’m late but I had a question:
Can I trade in a car that I’m currently financing? I know the value I owe won’t go away, but will that affect my Monthly payment on a leased vehicle? I’m paying way too much for a older car and would rather lease a newer car for less. Thank you.
That's a really great question and it's never too late to ask questions. Yes you can trade in a car that you're currently financing. Let's use a couple scenarios: Let's say without a trade, your lease payment on a new car will be $300 per month. If you trade in a car that you have positive equity on (your car is worth more than you still owe the bank), then your payment will go down from $300. If you have negative equity (your car is worth less than what you still owe the bank) then your payment will go up. A good generic rule is that for every $1000 in a lease deal, that's about $30 in payment. In other words, if your payment will be $300 with $0 downpayment, then with $1000 down it will go down to around $270 or $240 with $2000 down. Thanks and let me know if you have other questions...Jeff
Toyotajeff in Raleigh Thanks for the response, I’m assuming each dealer is different but is there a limit to the down payment amount you can put down? Also I wanted to know your perspective.
Im currently financing a 2013 Hyundai Elantra for $198 bi weekly. So roughly $400 a month with many miles than it should have. (Reason for this was I had no credit when I financed but have a average 700 credit score now) But was wondering, what would be better. Keep financing the outdated 2013 car that i don’t really want to keep or trade it in for a newer car I can finance? I probably have negative equity as it’s only been a year I’ve been paying it. Thanks I’d like to know what you think.
I'm putting thought into this as I write. I always feel people should get what they want, and it sounds like from what you wrote that you are ready to move on from the 2013. You more than likely have some negative equity from your trade...however, maybe the dealership you work with can discount the car enough to compensate for your negative money. For most companies, Tier 1 leasing rates are at a 720 or more score, but some have Tier 1 all the way down into the 600's. I say research the cars you want and test drive them and read reviews to see what you want. Then, have a couple dealerships give you numbers for leasing based on your trade and etc. Unless you have a good relationship with 1 dealership and trust they will give you a good deal, it doesn't hurt to have 2 competitors bid against each other for your business as long as you are comparing the same vehicle and price at each place. See how the monthly payments work out, and if acceptable, I say go for it! I wish you lived near Raleigh. I'd love to help! Thanks again.....by the way, if this helped at all, then please watch a few ads on my channel all the way through....that's how I get monetary benefit from my viewers :) Jeff
Toyotajeff in Raleigh okay thanks and will do with the ads👍🏻
@@jmon3y582 -John stick with the Hyundai till you built up your equity or balanced it out. Trust me, you DO NOT want that negative equity added to your new ride. I made this.mistake years ago, worse mistake of my life! I was paying $500mo for what should have been about $350 and it hurt my finances every month. So glad I paid it off and got rid of it!
Thank you so much for your valuable time and effort in this short and straight to the point video.
Question, is true that the dealer in general would call you towards the end of my lease to see If I would like to buy extra miles at a lower rate?
for instance, I just leased a BMW X5 BRAND NEW 2017, but they gave me 10k / yr. for 36 months. on my contract it says I am responsible to pay 25 cents/mile after the end of my lease if I passed the total of 30K miles.
But they told me that they will contact me couple of months before the end of my lease to offer me 16cents / mile!!!! is this possible??? Is true???
Please Jeff help me out here
Thanks for your question. I don't know of adding miles during the course of the lease. I feel that they will call you near the end of your lease, but they will be giving you end of lease options. You can keep it by re-financing it for longer term, you can trade it in for another BMW or another brand, or you can just give it back to the manufacturer. Watch out for giving it back, though, as it sounds like you will have to pay 25 cents/mile that you have gone over....good luck!
Increasing the annual mileage will lower the residual value, which in turn, will raise your payment.
Hey Jeff is it possible to lease a car with $0 down payment and little to no credit?
It's a possibility Alex yes. Depends on certain situations. Sometimes companies have first-time or college grad programs that let someone lease or buy with the best rates as well... Jeff
I have a question. I live on the east coast and am going to lease a car for the first time, but I intend to move to west coast in a year or so. I probably won't want to drive the car across the country. Is there a way I'd be able to turn it in to the dealer here on the east coast and get a different car on the west coast for the remainder of my lease?
Sorry Naught I’m positive no manufacturer would let you do that. I see and feel for your situation though. Thanks for your question and please keep following! Jeff
Thanks Jeff. Great video, by the way.
Anytime!
I just thought of something else. If I lease -- let's say a Toyota -- on the east coast but drive to the west coast to stay, I should be able to turn the car in to a Toyota dealer on the west coast at the end of the lease, correct?
Correct. You'll just have to call your bank that you're financing with...Southeast Toyota Finance, for example....and make arrangements and they will instruct you on what to do. Most banks understand that people move around and relocate. Good question! jeff
Can you bump up your miles on a lease after you have already purchased the lease
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I'm confused because some people say you don't need to put any money down when you lease. But every commercial I see say 2,999 due at signing plus tax and tags and dealer fee. So which is it?
Thanks for writing Hemi! EXCELLENT question!!! Here is the answer: You can put any dollar amount down that you want. There is a direct correlation between how much you put down and your monthly payment. Every car company would rather advertise payments at $199 or $249 (with more money down in smaller print) than to advertise on TV that payments are $349 (with $0 down). I PERSONALLY HAVE FOUND THAT FOR EACH $1000 DOWNPAYMENT, PAYMENT GOES DOWN AROUND $30/MONTH. This doesn't make it a bad thing, but customers just need to decide if they'd like to put $3500 down and have $179 payments, or $0 down and 284 payments, or somewhere in between, like $1500 down and $239 payments. I hope this helps.....it's a popular question and it probably deserves a video all on its own....hope you subscribe to my channel AND watch a few ads before my videos if you liked the content haha...Jeff
Toyotajeff Thanks for the reply. I have another question I'm trying to get from under rolling over negative equity every time I purchase a new vehicle. Is it possible to cover about 10k of negative equity with zero down in a lease. Without paying $1000 a month?
Tough question. You can roll negative equity from your trade-in into your lease....yes. However, just remember that for every $1000 of negative equity, you will have "approximately" $30 in payment added in. So, if you have 10k in negative equity that might add in 10x30=$300 in payment on top of your new car's payment. Also, the bank might be hesitant to approve you for 10k in negative equity because it will push the amount borrowed vs. the actual price of the new car you're buying to higher than normal. That's a tough one to get approved, but that's the answer!
Toyotajeff Thanks for a clear and honest answer.
they only show money down to get to a lower payment. it's never a wise idea to put money down on a lease. the actual interest savings is barely anything thus you're not saving anything and are actually doing the opposite of the intentions of a lease and that's to keep your money in your accounts working for you. you also put that money at risk if you total the car as gap insurance will cover the cost of the lease but you will not get that money down (cap cost reduction) back. it's gone. also, if you exit the lease early that money (which can be broken down per month) is not going to be reimbursed or pro-rated back to you.
never go in with money down. if you have $1k-$3k to put down you have that money to make the higher payment.
Is Insurance and Registration the same full coverage?
Yes it's pretty much the same. I'm sure each state is different, but you will register your car the same with a finance deal and a lease deal. You are required to have full coverage insurance per your state's laws. One nice thing about leasing is that includes Gap Insurance. Gap Insurance pays off the car should it be in an accident so you're not on the hook for it......
about how much is basic full coverage
100anti sorry no way I could tell you how much your car insurance costs. As you know, every person had different factors that affect their premiums. Thanks again!
Toyotajeff in Raleigh is the gap insurance automatically included in the lease payment through Toyota financial or do you have to purchase it through the dealer ? because they offered it to me and I said I would get it from my Allstate insurance
I wish you were in the DMV. I'd like to know can I lease a (let's say a 2015 , 2016 ) Toyota Camry with a tax ID and $3000 down payment? Hope to get an answer from you . Regards
Thanks for your questions. I am guessing when you say you'd like to lease a 2015 or 2016 Camry, that means you are looking for a used car. Used cars cannot be leased. They can only be purchased out right or with a normal loan. I know in NC, you cannot lease a car using special leasing rates with a tax ID number. You would have to have a SS# and a credit score of at least 600. The $3000 down might help you though! :) I hope this gives you some guidance and good luck to you!
Toyotajeff Thank you so much for the quick response. I didn't know you cannot lease an used car , I've learned something new (yay).... Thank you 😊
You are WELCOME :) I'm always here to help people. Thanks for watching and for subscribing to my channel !!
$6
When I bring the car after the lease end up should the car be like brand new car?
No. Read your contract. Dings and dents and scratches are okay if they are within reason.
At the stealer's discretion. And you know they only look after your interests, don't you?
My car (2011 535I BMW) is worth 10k, I owe 20k, been paying it for three years on time ($700 a month) and have had my credit score go up to where I refinanced my car from a 21% in the second year to 2.5% ($520 a month). So I'm upside down. Question: Can leasing help me get out of this (assuming I think leasing is a best fit for me)? Or should I just pay the principal aggressively to where I'm not upside down and then lease? Any help would be appreciated it.
Victor Nazario that is a fantastic question. The easy answer is yes leasing can hide all of that negative equity. The problem you have based on your scenario is that you have $10,000 negative equity. There may be a certain percentage Where you cannot have more negative equity than the price of the car. My best suggestion is to put some money down payment on a new lease and not worry about paying it down.
Victor, typically there's limit of about 10% of the new car that you can roll into a lease as negative equity. Best bet in your case is to pay it down to the point where you are in a break even point and then make the move.
Is your question..."can I roll my negative equity into a lease?" Of course you can. But why? You're still paying for it either way. Don't be tricked into thinking that you're not.
Does it matter if you put less than 10,000 miles a year?
Hi there! Nope it doesn't matter. Most leases have a minimum of 12,000 miles a year. I suppose some companies might have 10,000 miles a year minimums but I'm not sure. Thanks for watching!
No. You can go for a low mileage lease of say 7,500 per year. The residual will be higher and thus your payments lower. MF/Rate may change with that so the details matter but in general you should be good.
Man, selling to someone else is my plan... never carry over old debt into new lease... so far I liked leasing although I haven't ended it and flipped to new just yet
It's a good plan if you can sell your vehicle to someone else. Usually you get more in that transaction than if a dealership takes it in on trade...jeff
Are you in NJ?
I wish I was! Nope in Raleigh, NC. Let me know if you ever want to take a drive down here and I'll help :) Jeff
I wish you were up here to bro by far you the first transparent dealership representative I have ever listen to everything you've explained was clear as day
If I buy out a lease with 7 months for $589. Can i just pay off all that remaining balance in one payment?
Sure. But are sure that's what you're talking about? So if you want to own that car now free and clear, you would need to fulfill your obligation of the lease (7x589 = $4,123) and then pay the agreed upon residual value of the vehicle that is stated in your lease agreement. You can do that if you want. You can do that at any point in the lease if you wanted to.
What's the money factor??
Thanks Jeff, very helpful info. I am currently in the second year of a 5 year lease on a 2020 corolla. I am really into camping and kinda wish I had of went with a Rav4 instead. Just wondering if it would be possible for a dealership to buy out my corolla and get me into a Rav4 lease at such an early stage of my lease agreement? The corolla has very low km so it would have good resale value for the dealership.
Wish they'd teach you this in school...
when is the lease over do I get my downpayment back or not?
No. Rule of thumb for leasing is you NEVER put money down in the form of a down payment or capitalized cost reduction. It defeats the purpose of a lease which is to keep your money in YOUR accounts not that of a lender.
What is an acceptable lease payment for a 50k car?
That's a great question but it's also not a question that has a clear answer. Based on leasing rates, you might pay $500 for a 4Runner with 15k miles a year, or you might pay $572 for a BMW with 12k a year. Each brand has different leasing rates. I'm not sure how to answer this one sorry. So many scenarios with diff payments. jeff
now does any of these things apply to Lexus
kool-Aid Man yes definitely. You can apply all of these principles to any car manufacturer and they will all be basically the same Concepts
What is the average credit score to get approved for leasing a new car?
700 score
Why would the residual on my 4Runner after 3 years be $22,900?? Three-year-old 4Runners with 36,000 miles on them easily go for 30+K...I'm going to have at least $5,000 equity in it! why would they set the residual so low?
T4rTrail not sure but good question. It depends on a lot of factors like what is your monthly payment and how much money did you put down and the leasing rate. I would probably suggest selling it on your own or trading it at the end of the term for most equity possible. 4runner has the best resale value of any vehicle in the whole United States right now
Toyotajeff in Raleigh I put down $4,000 and my monthly payment is $300 even... that is mostly why I did it, to get that payment (plus its my favorite vehicle) so low and also, 22,900 for a three year old 4Runner, I figured was an amazing deal!💪
The banks gotta eat first that’s why !!
Leasing is only seems good for vehichles like mercedes which depreciate like crazy.
I was wondering the same thing on leasing a 4runner. 23k seems like a great deal if you sell it at the end of your lease.
Send toyota a check for $22,900. Pocket the rest.
The general idea of leasing is to let a customer use a car a little bit for 3 years and make him pay 60% of the car's price. After getting the car back the dealer can easily sell it for 55-60% of its original price and put 15-20% in his pocket.
Hey Samuel. Good insight. Actually it's kind of the flip of what you said. For example, if a Tacoma has a leasing residual of 72%, which it often does, than customers will pay for 28% of the car's price (100%-72%) over the 3 years. Usually when customers turn in a lease, the dealership will call their leasing company, Ford or Toyota or Hyundai, to come get it and take it back. We can take the vehicle in on trade as well from the customer instead of them giving it back. I work with whichever scenario works best for customers. Thanks for your comments...jeff
Lease all the way for me(money factor has to be @ good level), the factor that most forget to factor: depreciation!!!! and not the phony make you feel fuzzy inside number. Real trade in value, the amount where you want to punch the sales man in the face for shhhhhhitinnnnnn or your car...... this is where the money is saved.....Also when comparing apples to apples make sure to factor in the amount of maintenance to own the vehicle....that's when the aaahaaaa moment sets in.
$317 for a camry is ridiculous and its only 23k in price. 320s range is reasonable for a car in the 30k range. AND camry has really good resale value no reason for the lease to be that high.
Thanks for your feedback. Have a great day and thanks for watching
Amir Amir i think thats the price for a person with terrible credit and didnt put any money down
YoungBlaze Of Chitown the price of the car doesn't depend on the credit lol. In this case you have to research the actual value of the car and bring the value of the car down obviously..
Tommy well give more insight obviously you leased before
Tommy credit plays a significant role in money factor, which can add a decent amount to the monthly payment.
Seems like continuously trading a lease is just a way to keep making car payments forever.
yes/no. so long as you're driving you will always have a cost-to-drive per month thus nearly forever. regardless of how you pay for your car this will exist. make sense? Take an average $35k vehicle. If you pay cash for it on day one (not a good move) but if you do, you won't have a car payment but you still have a cost per month to drive it. Let's say it cost you $37k all-in OTD and home in your driveway. 60 months later your cost to drive will have been $616mo. If you had leased it your payment would likely have only been $400-425mo. Still make sense? You'll have to keep the car 92 months to hit the same $400 cost per month.
Now sure, after 8 years you'll begin to save thus why buying used for less than $35k and driving it for a long time is the most cost effective way to drive. That said, how much lower than $400mo. makes sense and is of a real "Value" to you as the owner? What I'm trying to say is are you targeting $200mo cost-to-drive? If so, keep in mind you'll be in that very same car for about 15+ years before you hit that point.
Think about it....is that worth it? YMMV. to me, no. I'll take a continued $200-400mo payment to ensure I'll always be benefiting from all that comes with a new car every 3 years / the very best years and miles of the vehicle I drive. I spend about 1-2hrs in my car per day give or take my schedule, etc. so I put a higher value on it. Again, YMMV.
@@ms3er396 Sure, I get it. I suppose it's just a different perspective. I bought my new 26K Toyota Rav4 about a year and a half ago, and I'm working vigorously to pay it off as soon as I can. Then I plan to keep it 15 or 20 years after that since they're very reliable. I don't always need new things, and I'd rather put an extra $400 a month in savings or investments than a new car every 3 years. I see what you're saying though.
@@betrix3000 Gotcha. Sounds like a plan. The extra $400mo in savings will certainly help.
Nice video one of the better ones on TH-cam BUT your residual explanation is off residual dose not guarantee what it's going to be worth in 3 years no one knows that it's an estimate some cars hold better then others I work for Toyota I know this look at the C-HR that is way less then residual and Yaris too maybe Camry Rav 4 and Tacoma and Tundra hold value but not all of the line up holds.
why don't you mention the 3 k down payment in leasing?!!!!