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You are in the Prices Paid - Buying & Leasing Experiences
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Toyota Venza, Car Buying, Car Leasing, SUV
#30 of 157 Re: Venza Lease [md_outback]
Jan 22, 2009 (4:47 pm)
I agree with IndianaJohns. Here's why...
According to this forum here are the Toyota money factors in APR form:
2009 Prius 7.08%
2009 Rav4 6.6%
2009 Corolla 3.92%
2009 Camry 3.24%
2009 Avalon 7.08%
2008 FJ Cruiser 6% (info from 09/07
2009 Highlander 7.08%
2008 Matrix 6.84% (from 04/07)
2008 Sequioa 2.016% (from 08/08) Low money factor because residual was 46%
2009 Sienna 1.8% (45% residual)
2009 Venza 7.08%
My first point is 7 of the 11 are over 6%. The low money factors are low just to compensate for low residual so they can move cars. Historically, even the low ones were 5-7% before their residual values tanked. My second point is Toyota's standard money factor for Tier 1+ credit is 7.08%!! What is their Tier 2??? Don't want to even think about it. Yes, they do occasionally lower them here and there to move cars and to try to match the competition's lease rates but to have a standard lease rate of over 7% is laughable to me. In my opinion, I don't think it is financially beneficial to lease any car if the lease rate is over 4% (0.00167). Might as well buy it.
#31 of 157 Re: Venza Lease [stoopy]
Jan 23, 2009 (10:53 am)
Statistically, you agree with me, since IndianaJones stated: "99% of the time they are at an un-leasable 7%." And you showed 7 of 11 (64%) examples under the 7% mentioned by Dr. Jones.
My point was that Toyota lease factors have often been competitive when taken into context of the overall market. When a new model first comes out, the lease rate will be high. When they have a huge supply of a vehicle, the rate will come down. When it's late in a model year, the rate comes down. When they are trying to move more Camrys so they can say they outsold Honda Accords, the rates are better - for Camrys anyway. Toyota is a smart company and they recognize that in today's financial environment, leasing is a risky business, especially with a brand new vehicle. Who can predict what anything will be worth 3 years from now? So their response is to stay on the safe side and offer higher lease rates and/or lower residiuals for a while. However, if they find that Venzas are moving too slowly because no one has the cash for a $35K car, they will massage the lease numbers cautiously to drive up demand. Toyota, like nearly every car manufacturer is struggling right now and they face difficult decisions: Do they take measures to increase demand by lowering profit (i.e. reduced lease rates), hoping it results in enough increased sales to justify, or do they keep a reasonable unit profit at the risk of overall lower sales, meaning plant shut downs and layoffs. Toyota still has a strong balance sheet with around $100 billion in net assets and will continue leasing. Other firms like GM (with more than negative $60 billion in net assets) can no longer afford the uncertainty of leasing.
#32 of 157 Re: Venza Lease [md_outback]
Jan 23, 2009 (10:05 pm)
Okay I admit I exaggerated the 99% of the time statement. I agree with Stoopy though about the ridiculousness of Toyota's base lease rate of .00280.
#33 of 157 Re: Toyota Venza Lease Questions [md_outback]
Jan 29, 2009 (2:58 pm)
I have a lease offer for Venza 6cyl FWD, with adjusted cap cost of $29,740.00; money factor of .00275.
Cap cost is dealers invoice, plus destination charge, minus holdback.
Lease is for 36 month, 25k miles per year for $648.83/month.
This still seems high to me even with the extra yearly milage. So far she has not given me a residual figure but I figure this lease should be around $540/ month. Am I way off the mark?
Thanks for your thoughts and ideas.
#34 of 157 Re: Toyota Venza Lease Questions [gensherman]
Feb 01, 2009 (11:49 am)
"This still seems high to me even with the extra yearly milage."
Do you think $650 a month on a 3 year lease is a TAD high??? You could PURCHASE this car at $30K, 60 months for $579 per month. $497 for 72 months.
So, yes $650 is very ridiculous even with the extra mileage. Why would you not just buy it anyway if you are going to put so many miles on it?
#35 of 157 Re: Toyota Venza Lease Questions [gensherman]
Feb 06, 2009 (9:02 am)
Sorry I didn't reply sooner, I'm out of US and Internet is not readily available. I agree with another comment that you'd be better off buying instead of leasing. The money factor is nothing special and the residual for 25K miles will be very poor. Leasing is usually not the way to go if you drive a lot of miles per year - best if you can stay at 12K miles per year or less. The numbers they have quoted you do not seem out of line, but you really need the residual to perform a true lease calculation to confirm this.
#36 of 157 Does Toyota residualize factory installed options on the Venza?
Mar 16, 2009 (5:45 pm)
When I've looked at leasing Toyotas in the past including the current Camry, from what I read, the residual value of many (if not most) Toyotas is based on the base price, not the bottom line sticker price including factory installed options. What that means is that you're paying for 100% of the cost of the factory options in the lease which makes the lease payment really high. I know that Lexus does not calculate leases like that. The residual value for a Lexus is based on the bottom line of the sticker price, not the base price.
The reason I'm asking is because if you want to lease the 3.5V6 AWD with the premium package #2, navigation package and sun roof, that's $8K in options and if you have to pay for 100% of the options in your lease payment, it will be very high, probably higher than a comparably equipped Lexus RX350.
Does anyone know how Toyota Financial Services calculates the residual value? Maybe Car_man or what of the other hosts can help me out. Thanks in advance.
#37 of 157 Re: Does Toyota residualize factory installed options on the Venza? [sam_k]
Mar 16, 2009 (7:21 pm)
Toyota does calculate it's residuals differently.... Not all options are residualized at the same rate as the base car.. I don't think it's quite to the extent that you describe, but well-optioned Toyotas do tend to have lower effective residuals on a percentage-basis than the base models.
It's fairly convoluted.... enough so, that each vehicle has dollar amount residual, so that the dealer doesn't have to calculate it.
So... a higher MSRP unit will have a higher residual than the lower MSRP unit, but as you've noted, not on a straight percentage.
Bottom line? Highly optioned Toyotas usually don't make for very cost-effective leases.
Hope that helps..
#38 of 157 Re: Does Toyota residualize factory installed options on the Venza? [sam_k]
Mar 18, 2009 (7:13 am)
Toyota’s residual calculations are not all that different from many manufacturers that have several “trim” levels. Good examples are an Audi A4 that has a lower residual on the loaded “Prestige” level compared with the basic “Premium” level. Also the Nissan Murano has a top-of-the-line LE model with a residual 5% lower than the mid-range SL model. And since the Venza doesn’t have trim levels like the Camry (i.e. base, LE, SE & XLE), the residual calculation must look at the option packages installed on a particular car. These variable residuals are based on the economic realities of the used car market. When buying a 3 or 4 year old vehicle, consumers are not likely to pay a huge premium for a navigation system or a high-end stereo system. Thus the cost of those expensive options depreciates more quickly than the rest of the vehicle.
#39 of 157 Re: Does Toyota residualize factory installed options on the Venza? [md_outback]
Mar 18, 2009 (7:43 am)
md_outback, you make valid points. I understand that after a leased car is returned and is put on the used car market, consumers won't pay a lot more money for a used car with expensive options such as a navigation system but it seems that Toyota Financial Services doesn't simply reduce the residual by a few percentage points based on the options or trim lines, in my past experience they want you to pay for 100% of the cost of the options in the lease. That's ridiculous, especially if you're giving the car back at the end of the lease. They're basically treating the factory installed options as other companies treat dealer installed accessories.
Many years ago I went with an ex to lease a Toyota 4Runner and the Toyota dealer gave me the money factor and residual percentage so I plugged them (along with the MSRP and cap cost) in my lease calculator on my Palm handheld. I calculated a monthly payment that was $150 or $200 lower than theirs. After the sales rep went back and forth into the finance office several times to get clarification I finally got fed up and followed him in there and the finance representative explained to me that the residual value was based on the BASE price on the window sticker not the bottom line price including options which meant their calculation included financing the thousands of dollars worth of options in the lease. Some of you might be asking how can the payment be so drastically different. If you get $6k or more worth of options and finance them over 36 or 39 months, it can easily add $150 or more to your monthly payment.
I'm actually curious to get the lease details on this car and the Camry SE V6 so I might stop by a Toyota dealer and ask someone to explain to me their lease calculation.