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Toyota RAV4 Lease Questions

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Hi jerhot. Toyota's lease money factors vary by region. I would be happy to give you an idea of what the RAV4's lease program is like right now, but in order for me to provide you with accurate info I need to know what state you are in. For now I can tell you what this vehicle's residual value is. The residuals are the same in most areas. Toyota Financial Services' current 36 month, 12,000 mile per year residual value for a base 2007 RAV4 4WD is 63%. The reason why this resid looks so high is TFS only publishes residual values for base vehicles. It places restrictions upon which options can be residualized, making vehicles' real world resids lower.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Hi Ravee. Unfortunately, it is difficult for me to estimate what monthly payments should be for vehicles leased through Toyota Financial Services. This is because it only publishes residual values for base vehicles. It places restrictions upon which options can be residualized. The calculation of vehicles' actual residual values is so complicated that Toyota provides dealers with lists of the actual dollar residuals for vehicles that they have in stock rather than having them calculate them. My advise is to negotiate as low a selling price as possible on the RAV4 that you want and then have the dealer that gives you that price calculate its monthly payment using TFS' buy rate lease money factor. If you tell me what state you are in I may be able to give you an idea of what this truck's money factor should be like right now.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Unfortunately, Fin, your assumption is incorrect. In fact, Toyota is not providing any lease money factor support on the RAV4 in most regions. The lowest money factor that I have seen for this truck is in Toyota's New York region where it is offering .00236, which is equivalent to an interest rate of around 5.67%. Consumers who want to lease this truck in most other areas will have to pay Toyota Financial Services' standard lease money factor, which is even higher than that, probably more like .00285.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    Hi haewalli. Toyota isn't providing much lease support on the RAV4 right now. Its lease program varies by region. If you tell me what state you are in I will be happy to try to give you an idea of what this truck's current program is like in your area right now. As far as other incentives go, I have not seen any cash or special financing offers on the '07 RAV4 yet this month.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    You're welcome, shatzi. My best advice to anyone who is interested in leasing a new vehicle is to shop around and negotiate as low a selling price as possible on the model that they want. Once you have a selling price that you are happy with, the closer it is to dealer invoice the better, have the dealer calculate your lease payment using Toyota Financial Services' (or whichever bank you are planning on leasing through) buy rate lease money factor. In your area, Toyota's New York region, TFS' current buy rate lease money factor for the 2007 RAV4 is .00236 for consumers who qualify for its "Tier 1+" credit tier.

    Car_man
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  • HAS ANYONE RECEIVED QUOTES ON A TOYOTA RAV 4 LEASE..JUST CURIOUS!!
  • Hi,

    I'm considering leasing a RAV4 4wd 4cyl base with option a ($520). Currently, there is an offer for $249 Tier 1, $2199 due at signing + title,tax,acquisition, and registration. If that is the promotion for Tier 1, what can someone expect to pay with Fair credit standings? Fico 600-620?

    I would like to lease this vehicle for $225/month. I have some case available for upfront fees and down payment. What is the best and realistic options do I have?

    Thank you!!
  • david_opdavid_op Posts: 1
    I walked out of Elmhurst (Illinois) Toyota a few hours ago.

    Black RAV4 base w. V6, 3rd row, towing pkg, roof rack, on the lot. MSRP $24999

    Negotiated $23400 sell then asked to write up 24 or 36 mo. lease.

    Apparently TMCC only does 24 months with 30K miles. Residual around 60%. My other choice was a 36 month 36K miles, residual 54%. In either case, monthly payment looked more like a loan.

    A good portion of my decision to look at the RAV4 were the high residuals from ALG. I don't see these from TMCC.
  • witt168witt168 Posts: 16
    Hi Car_Man,

    Does Toyota has any lease support in Aug?

    I'm looking for a 2007 RAV4 w FE/EJ/CD/RL/SR/CF in Cal.

    Does anybody has just lease one lately?
  • Hi,

    I am pretty clueless when it comes to leasing and was wondering if someone could give me the numbers I am to look for/get for a 2007 Rav4, 4x2, Sport. Looking for at least 3/4 year lease.

    What is invoice?
    What are the money factors?
    How do I calculate what my payment should be with the money factors?
    Anything else I should know?

    Thanks so much.

    Kevin
  • delta737hdelta737h Posts: 603
    Kevin,

    The formula to compute monthly payments is...

    payment w/o tax = MF X (AC + RV) + (AC - RV)/Term (months

    where:

    MF = Money Factor
    AC = Adjusted Capitalized Cost
    RV = Residual Value

    RV = Residual Factor x Adjusted MSRP

    You ALWAYS negotiate Selling price first. This is called the Agreed Upon Value. Next, add to this any amounts you wish to finance in the lease (e.g., acquisition fee, etc.). This sum is the Gross Capitalized Cost. From the Gross, deduct any trade credit or cash down (called capitalized cost reduction). The difference is called the adjusted capitalized cost. The residual vaue is the estimated future wholesale value at lease end. Many finance captives will artificially inflate residuals in order to keep the payment low.

    I suggest completing a one page lease proposal similar to the one below and FAX/email it to your dealer. This will save time, money, and aggravation. Remember, though, that this is ONLY AN EXAMPLE. Tax treatment may be different for your state. You'll need to get pricing data, including MSRP and invoice, from edmunds.com or kbb.com. At edmunds, go to the home page and click on new cars and select the desired car.

    Lease Proposal

    Pricing Information

    Base MSRP 2007Infinity G35x Coupe (3.50L 6cyl 5A)…..…..….……………… 33,950.00

    Premium Package.........................................................................- - - - - - - - - - - ............. 2,150.00
    Navigation Pack............................................................................- - - - - - - - - - - ............. 2,100.00
    Chrome Wheels..........................................................................- - - - - - - - - - - ............... 1,440.00

    Destination Charge……………………………………………………………………… 715.00

    MSRP………………………………………………………………..……..…….…… 40,665.00

    Lease Payment Calculation

    Agreed Upon Value……………………………………………………………..……… 37,202.23

    Acquisition Fee…………………………………….....…………………………………… 595.00

    Gross Capitalized Cost………………………………………………………………… 37,797.23
    Trade Credit..........................................................................- - - - - - - - - - - ........................ 8,000.00
    Adjusted Capitalized Cost………..……..…....………..……..……………………… 29,797.23

    Residual Factor………………………………………………..………………………… 0.52

    Residual Value (Res. Factor × MSRP)…………………..………………………… 21,145.00

    IFS Money Factor…………………………………….………………………………… 0.00195

    Term (months)…………………………………………………………………………… 39

    Base Monthly Lease Payment…………………………………..…………………….…. 321.19
    State Sales Tax 7.00%...........................................................................- - - - - - - - - - - ............. 22.48
    Monthly Lease Payment w/Tax…………………………..………………………………. 343.67

    Initial Lease Charges

    Title, Registration, Plates (estimated)……………..………………………………….. 150.00
    1st. Payment……………………………………………………………………………... 343.67
    Security Deposit.........................................................................- - - - - - - - - - - ..................... 350.00
    Total due at lease signing……………………………..…………………….….……. 843.67

    GAP insurance protection is included in IFS lease.
    No Disposition Fee.
    Annual Mileage Allowance: Residual Value reflects an annual mileage allowance of 15,000 miles.

    ________________________________________________________________________________- - - - _________

    The money factor syntax is 0.00XXX. For instance 0.00195 is sometimes called a one nine five money factor. You didn't provide your resident state and so I have no clue whether your state taxes the payment stream, Agreed Upon Value, total payments, etc. If you live in Florida, then there is no state sales tax.

    Hope this helps.

    John
    Medina, Ohio
  • Wow. Great information. Really, thank you. (In the title, I say Im from Illinois, so yes, there is state tax)

    A few more questions if you have a few minutes:

    When you do a proposal like that, though, do you start with an agreed upon value of $100 over invoice? Where do you start when negotiating that value?

    Where do i find information such as acquisition fee, destination charge, residual factor, money factor, security deposit?

    How do I know what good money and residual factors are? The numbers mean nothing to me so how do I know a good one?

    Thanks again John. I truly appreciate your time and help.

    KEvin
  • Also, if you do not plan on buying the car at the end of the lease, what difference does it make if they inflate the residual value to lower your payment? I mean, once the lease is over, and I have no intention of buying the car, why does it matter how much they inflated it as long as my payments were lower throughout the lease??? Am I missing something?
  • So I am looking at the 2007 RAV4 Sport 4x2, V6 with Mats and Moonroof. It looks like the Invoice is 24,100. Should I actually be shooting for 24,500 and below? What is the ceiling on this car?

    What EXACTLY should I be shooting for as far as an agreed up price (out the door price or the price + TTL, destination, etc), money and residual factors, etc.

    AGain, thanks so much to all. I am pretty much clueless on leases. Thanks.

    KEvin
  • delta737hdelta737h Posts: 603
    Kevin,

    You have asked some very good questions. Let me try to answer them.

    Regarding asking price, it's best to visit these forums to see what other people are asking. Also, check things like invoice pricing, cash incentives, etc., at edmunds.com. You have to get a handle on supply and demand. A few years ago, chrysler sebring convertibles were selling for no less than 115% of MSRP!!! Today, you can get an Infiniti G35 for $1500 under invoice! So, you just have to look at the message boards, research edmunds, etc., in order to get a good feel for asking price. If you're just not sure, always start a few hundred below invoice. It never hurts to ask. You can always go up but you can never go down.

    As far as money factors, residual factors, security deposits, and acquisition fees are concerned, call a few dealers and ask. Always ask for the money factor with 0% reserves. Reserves work in much the same way as points do on a mortgage loan. The fund provider compensates the dealer for writing the lease at a higher rate. For instance, a money factor of 0.00195 + 1% reserves means that the dealership receives 1% of the adjusted cap cost (excluding acquisition fee). A money factor of 0.00180 + 0% reserves means that the dealer receives nothing and so 0.00180 is called the buy rate or base rate. Always ask for the buy rate. Of course, it's also wise to visit the forums to see if this info is available.

    I just mentioned inflated residuals in passing. It's a benefit if you're leasing to lease because it lowers your payment. Residuals are set in stone and are non-negotiable.

    Hope this helps.

    John

    PS: I don't know how I could have missed Illinois!!! Do you live near Evanston??? I went to Northwestern.
  • Not far from Evanston. Grew up in Park Ridge...went to Univ of Iowa so I am fellow Big 10'er (11).

    If residuals are set in stone, how come they can inflate them then?

    Also, searching these forums, I have yet to see any of these figures for the Rav4. Also thinking about the CR-v. Anyway, thanks for the info and ill try and track these figures down. Can I just call a few dealers and ask them?
  • delta737hdelta737h Posts: 603
    Sure, Kevin, you can call a few dealers. The fund provider sets the residuals. Once established, inflated or otherwise, they're set in granite.

    When I say inflated, I should have been more clear. The Automotive Lease Guide (ALG) is the standard by which all residuals are judged. The ALG is the industry standard; a benchmark if you will. Nearly every residual insurance carriers require banks to use the ALG. However, the finance captives generally are free to set whatever residual levels they choose as many self-insure their residuals. Google Automotive Lease Guide and do some exploring.

    If you have further questions, fire away.

    Good luck my friend.

    John

    PS: My son also went to Northwestern and now teaches math at Harper College in Palatine. He lives not very far from Wrigley field.
  • witt168witt168 Posts: 16
    Hi John,

    Thanks for your great input.

    I've got a quote for 2007 RAV4 SPORT W

    JBL/ TONNEAU COVER/ DAYTIME RUNNING LIGHTS/ POWER MOON ROOF/ CARPET FLOORMATS

    MSRP $25339

    QUOTE $22999

    I'm in California.

    Based on Edmund's info, this is $179.00 below invoice. I think $500.00 below invoice is what I'm looking for. Is this unrealistic?

    Based on the info above, what is the money factor? residual factor?

    Thanks.
  • witt168witt168 Posts: 16
    Thanks for your lease calculation formula.

    Here's what I have:

    2007 RAV4 Sport W JBL/Moon roof/Daytime running lights/Carpet floor mats/Tonneau Cover

    Selling price: $23,000

    Residual Value for 36 Months: $13890 (quote by dealer)

    Money factor: 0.00285 (quote by dealer)

    0.00285 X (23,000 + 13,890) + (23000 - 13890)/ 36 months

    Monthly payment: $256.00

    Is this correct?

    Thanks.
  • delta737hdelta737h Posts: 603
    witt,

    Assuming that (A) the sell price of 23,000 is the same as the adjusted cap cost and (B) the dealer's data is reliable; I arrive at the following...

    358.19 = 0.00285 X (23,000 + 13,890) + (23000 - 13890)/ 36 months

    So, our monthly payment differs. I don't know whether the money factor and residual are correct. You may want to double check them with other dealers.

    Good luck!

    John
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