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Toyota Venza Lease Questions

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  • my3rdrxmy3rdrx Posts: 167
    If you're interested, this is the most helpful information on how to arrive at a monthly lease payment that I've found: http://www.leaseguide.com/lease08.htm
  • No problem, md_outback.

    Car_man
    Host
    Prices Paid: Buying & Leasing Experiences Forum
  • A reporter from a large finance magazine is looking to speak to Toyota Venza owners. If you are interested in speaking with the reporter, please respond to ctalati@edmunds.com with your daytime contact information by Wednesday, January 14, 2009.

    Karen-Edmunds Community Manager

  • thanks this was helpful
  • Ok, thanks.
    I'll gather the info. there must be other charges not disclosed.
    The quotes I have been getting do seem very high for this vehicle.
  • You could lease an X5 for less.
  • I calculated the Venza lease assuming a 2,9% interest rate a residual value... That was the funniest post I've read around here in months!

    When has Toyota ever had a lease rate in the 2.9% range??? 99% of the time they are at an un-leasable 7%. I would estimate an MSRP $32,000 Venza will probably lease at around $579 with zero down for 36 months.

    Ridiculous considering you could buy one for $40 less per month.
  • Actually, Toyota lease rates vary quite a bit, depending on the vehicle AND the geographic region your dealer is in AND your credit rating. Could be you are in a region that can command higher rates due to local competition and other factors. In my area (Baltimore/Wash DC) I've seen money factors equating to lease rates below 2%, but these are typically on vehicles in high supply that Toyota needs to move quickly. As long as Venzas are in short supply, lease rates will be higher than on other Toyotas. This could change as supply goes up if Venzas are not moving as quickly as Toyota hopes.
  • stoopystoopy Posts: 105
    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.
  • 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.
  • 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.
  • Md_outback,
    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.
  • stoopystoopy Posts: 105
    "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?
  • 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.
  • sam_ksam_k Posts: 113
    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.
  • kyfdx%40Edmundskyfdx%40Edmunds Posts: 25,876
    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..
    kyfdx

    Moderator - Prices Paid, Lease Questions, SUVs

  • md_outbackmd_outback Posts: 185
    sam_k,
    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.
  • sam_ksam_k Posts: 113
    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.
  • md_outbackmd_outback Posts: 185
    sam_k,
    I agree that if that is the way Toyota is calculating their leases it will ultimately raise the monthly payment and may lose some business. It really makes no sense for them to do this for "factory-installed" options; Lexus doesn't do it and they use the same financing company. Honda does this for the "dealer-installed" options, but that makes a little more sense since the dealer doesn't install $7000 worth of stuff. On the other hand, it will reduce your buy-out at the end of the lease, so you could turn a small profit if you sell the car yourself or trade it in a few years. Maybe this is a new tactic that Toyota is trying so they get more cash up front and not have consumers complain that their vehicle didn't hold its value by the end of a lease. But that is pretty misleading, imo.
  • sam_ksam_k Posts: 113
    md_outback,

    I think Toyota does this to push people into buying instead of leasing. A lot of car companies don't like to lease anymore because it seems that the cars always end up being worth less than the residual value. Like you said, it you're buying the car at the end, then you either can pay for the options through the lease or just pay for them later but I always return my cars at the end of the lease so it's not worth it to me.

    Most car companies make you pay for 100% of dealer installed options/accessories in the lease and that make sense since they won't recoup any of that money back when they resell the car after you return it but Toyota should residualize the factory installed options. According to Car_man, Nissan residualizes factory installed options and most dealer installed options which makes it a lot better to lease a Nissan than a Toyota. I was considering leasing a Toyota Camry or Venza but it looks like they're off my list.
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