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Toyota Tundra, Car Leasing, Truck
Aug 13, 2008 (7:37 pm)
I am looking to do my first lease and I am still a little unsure how to know if I am negotiating a good deal;
I am between a '08 Tundra and '08 Tacoma;
I am located in Milwaukee, WI 53227, Tax rate 5.6%, and fall into a Tier 1 credit rating
The 2008 Tundra I am looking at is as follows;
CrewMax 4x4, SR5 w/ Off-Road Package
MSRP: $39,700 w/ delivery
Can anyone tell me what money factor and residual will be on this truck; I'm looking at doing a 3 year/36K mile lease and hoping to walk away with just 1st month, taxes, and registration.
Let me know what you think the best possible deal I can walk with this truck is. The dealer said they have a $1000 rebate through August and an additional $1500 if I can register it under my business name.
I was told this month is the best month of the year to lease a Tundra. Thanks for your help!
#186 of 235 Re: [endlessmoto]
Aug 14, 2008 (2:58 am)
With resale value down in the pits, I'd think Toyota being conservative would make it difficult at best to lease. Other manufacturers have walked away from it completely.
Aug 14, 2008 (7:44 pm)
If you're gonna' lease, definitely do it now! Toyota Financial Service's money factors are insanely low right now!! When you find the exact vehicle you want, ask the dealer what the residual value is - they will more than likely be truthful with that figure as it's set by the lender. TFS residualizes each vehicle differentley based on options, but depending upon annual mileage allowances, anywhere between 51-54% on a 36 month lease.
Rates also vary by region, but should be between .00015 - .00075. Unlike the residual value which is already set, the dealer can and probably will want to "mark up" the money factor. Since you have a ballpark of where the rates are, request those numbers from your dealer by asking them what the residual and "buy rate" money factor are? Or, ask them what that tier 1+ base rate is? If you're 720+, you're tier 1+ with TFS.
As for a selling price/cap cost, $500 over - $500 below invoice + any additional incentives in your region. Or, a dealer discount of ~$3500-$4500 + additional incentives.
#188 of 235 Toyota Tundra 2008 Lease SR5 V8 5.7
Aug 15, 2008 (12:27 pm)
I am interested in leasing a new Tundra and I am tired of getting the run around. I have been to a few different dealerships and I am confused.
I have a 734 credit score and I keep getting told to get the vehicle I have to put money down and still have a payment of atleast 450 - 500 a month. I know that there has to be better deals. They keep telling me I have to pay the MSRP for the lease.
What is the break down on how this works. Do I really have to pay MSRP or how do I talk them down? What is the cap and invoice price mean? Also, I have been looking on other posts and see stuff like 00016 and 00075...what does that mean? I am in Tennessee with great credit and would like this truck for 350 or less.
Please help....TUNDRA V8 4X4 5.7
#189 of 235 Re: Toyota Tundra 2008 Lease SR5 V8 5.7 [alicia33]
Aug 16, 2008 (1:14 am)
At 734, you qualify for Toyota Financial Services' top tier credit rating, otherwise known as Tier 1 Plus.
Invoice is an approximate amount that the dealer paid the manufacturer for a particular vehicle.
The Cap or Cap Cost is just another word for Selling Price, but when leasing the term is known as the Captitalized Cost.
The numbers .00016, .00029 and .00066 are known as the money factor. In simplest terms, it is the interest/fee you pay to the bank/leasing company. To convert the money factor into an interest rate (apr %), simply multiply it by 2400 (i.e. - .00016 x 2400 = 0.384% - yes, less than 1%!)
Trying to sell you that vehicle/cap the cost at MSRP is an absolute joke! I realize that 4x4's and CrewMaxx's are in higher demand, but there is no reason that truck should not be had for any more than $500 over invoice.
Again, I am not in your region and the leasing sources I utilize are in Southern California and the Midwest, however, my previous post listed a range of money factors that you should find across the country. Also, TFS sets a residual value for each vehicle independently and depending on which options it's equipped with could raise, or lower the value. With that said, don't expect anything higher than about 55% or lower than about 49% (depending on mileage allowance) on a 36 month lease.
With most lending sources, you'll obviously have the highest residuals based on the shortest terms and lowest mileage allowances (i.e. -24 mo/10k miles/yr).
Find out the residual value and "buy rate" money factor from your local dealer (ask a few to confirm). Then, negotiate the price just as if you were purchasing the vehicle - this agreed upon value will be the cap cost. It's really simple, the difference between the price you negotiate and the set residual is what you pay for during a lease.The difference between these two numbers is known as the depreciation. Now, you would take the depreciation and divide it by the number of months you plan to lease (24,36, 39, 48, etc). This will be your base monthly payments. Btw... the best term on a Tundra right now is 36 months.
But, we're not finished, then you have to calculate the interest on the loan. You take the residual and add it to the cap cost, then multiply it by the money factor. Add that amount to the base monthly payment, then add in your local tax rate and you have your out-the-door monthly payments.
2008 Toyota Tundra CrewMaxx 4x4:
Assume a 36 month/12k-mi/yr lease:
Dealer Invoice: $36,500
Cap Cost: $37,000
Residual: $20,760 (53% of MSRP)
Money Factor: .00016
$37,000 - $20,760 = $16,240 (Depreciation) / 36 = $451.11
$37,000 + $20,760 = $57,760 x .00016 = $9.24 (Interest)
$451.11 + $9.24 = $460.35 + tax (assume 7% = $32.22) = $492.57/mo.
Now, in many regions, there is additional cash available on leases. In Socal, if you lease through TFS, you get the low money factor and an additional $1000 bonus cash. This money should be used to lower your cap cost in addition to what you already negotiated. Going back to our example, we stated a cap cost of $37,000. If bonus cash is available, the new cap cost would now be $36,000 and thus would lower your payments even further.
Large rebates such as the $5500 available in SoCal are not comaptible with leases through TFS. They are for purchases only. You could take it if you leased through an outside bank, but you'll find that the the residuals and money factors will be much higher.
Hope this helps?
#190 of 235 Re: Toyota Tundra 2008 Lease SR5 V8 5.7 [ocautoseeker]
Aug 16, 2008 (12:00 pm)
Thanks so much for the information. It reallys helps!!!
Alright, I understoof all that you were saying but I got another questions. What about the admin, deliver charges, process and handling and dealer fees? Those fees can add up to a couple of thousand of dollars. Are thos fees that I should pay or is that just another way they make more money? Which fees could be waved or which fees do I have to pay regardless?
Also, when I ask a dealer for their invoice price..should I ask before all the fees...(ie. like the fees noted above) or will the give the invoice of all fees included?
Also, is the dealership required to give me the invoice price and residual value or a truck or is it private information meaning they have the right to give it or the right to keep it private?
Thanks for all your help...you are so smart!!!
#191 of 235 Re: Toyota Tundra 2008 Lease SR5 V8 5.7 [alicia33]
Aug 17, 2008 (3:23 am)
Typically, when you lease, there are usually drive off fees, sometimes called inception fees. These usually include your first mo. payment + tax, your dmv fees, perhaps a documentation/processing fee (in socal, dealers are capped at $55, but some states try to charge as high as $600!), and a lease acquisition fee/bank fee.
The acquisition fee, which I believe is $550 on Tundras is a non-negotiable fee that is charged by the lender(TFS), not the dealer. It is usually capped into your lease payments, meaning... that $550 would be added on top of the price you negotiated.
Going back to our example, if they agreed to sell you the truck at $37,000 and you wanted to cap the bank fee into the lease rather than pay it upfront as part of your inception fees, your adjusted cap cost would now be $37,550 and consequently, your monthly payments would rise (probably between $12-$15/mo).
As for fees, every vehicle has a destination/freight charge and it's listed on the window sticker and on the invoice - everyone pays it. Now, if the dealer tries to tack on an additional delivery fee (they shouldn't), refuse it. I don't believe your region charges an admin fee - that's typically only in the southeast region (Fl, Ga).
As for the invoice, Edmund's is fairly consistent with the dealers, however, you may find that the dealer's invoice is a few hundred higher. If so, it is probably their regional ad fee. It's a legit fee, but like anything else, in a buyers market you can always try to negotiate.
When we refer to invoice, we mean the dealer's invoice and since items such as destination, holdback, ad fee, etc are already itemized on the invoice, invoice to you means the total factory invoice including all options. So, your truck could have a base invoice of $34,000, but after all options destination, holdback, ad fee are added in, the total invoice that the dealer paid may be $36,500, and therefore, if you offered $500 over invoice, your essentially offering to have them sell you the vehicle at $37,000. Make sense?
A dealer doesn't have to share any information with you, but if he wants to be competitive, it behoove him to provide you with the info you're looking for. All dealers have different methods, some are very willing to provide info via phone or over the net, where others really won't give you anything 'til they have you on their lot.
#192 of 235 Help! I thought I was pretty savy but leases are...
Aug 17, 2008 (2:36 pm)
confusing to me!
I am considering purchasing the following:
2008 Tundra Crew Max 5.7 SR5. Including extras, it has an MSRP of $34,759.
I was offered a dealer discount of $3500 and a rebate of $7000 if I were to purchase (I obtained a tax ID number to get the extra $2000 rebate to purchase it via a business name).
If I were to lease, the dealer discount is $5,000 and a rebate of $9,000. The tax and docs fees were normal but the lease option added a $550 fee.
I was told if I were to put a $10750 one pay lease payment, we were to have no payments for 3 years and a residual of $15,750, with no cost to relinguish the truck.
Is this a good deal? Can there be any further negotiation? What should I be careful about?
#193 of 235 Re: Help! I thought I was pretty savy but leases are... [grubbs2]
Aug 19, 2008 (2:32 am)
Something seems amiss with the leasing numbers you reported. A dealer discount of $5000 + $9000 in rebates? That can't be right, unless you're looking at a Dodge Ram.
The dealer discount should be the same regardless of purchase or finance - $3500 off seems more realistic. The large rebate is not compatible with TFS leases. It varies by region, but in socal, on leases, you get $1000 bonus cash + super low money factors (based on tier). The $5k rebate is not compatible on TFS leases - not sure about the biz cash, sorry.
Your one pay lease works out to less than $300/mo. Great deal!
#194 of 235 Re: Toyota Tundra 2008 Lease SR5 V8 5.7 [ocautoseeker]
Aug 19, 2008 (8:19 am)
Alright, I have another question. What about this .... the dealer says he paid 30,000 as his invoice but there is 2,000 in options...not including admin fees, dealer fees, dmv, process and handling. So does that mean I pay the invoice and the options. I feel I am getting had on this...I thought they bought the truck from the manufactor as is...so...if they say there is 2,000 to 3,000 in options on it should that be in the invoice or MSRP...or is that added on in the end. The dealer said the MSRP was32,000 with 2500.00 of options....and than all the other fees...what do you think?