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Toyota Tundra Lease Questions

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  • kyfdx%40Edmundskyfdx%40Edmunds Posts: 25,876
    Either that.. or he left out a zero..

    Moderator - Prices Paid, Lease Questions, SUVs

  • 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!
  • obyoneobyone Posts: 8,065
    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.
  • 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.
  • PLEASE HELP!!!

    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

    Alicia
  • Hi Alicia,

    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).

    In summary...

    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.

    Sample:

    2008 Toyota Tundra CrewMaxx 4x4:

    Assume a 36 month/12k-mi/yr lease:

    MSRP: $39,000
    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?
  • ocautoseeker,

    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!!! :)

    Alicia
  • 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.
  • grubbs2grubbs2 Posts: 2
    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?
  • 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!
  • 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?
    Alicia
  • Now you're confusing me. Hehe... just kidding, I understand what you're saying. It's really very simple so let's not make it too difficult.

    Okay, let me show you what the Toyota dealer sees on his computer screen...

    18186 VEHICLE INQUIRY REPORT DATE: 08/20/08
    DCV920 TIME: 09:51
    Model Number: 8352A SERIAL # :8X053419 Check Code: 0

    Model Description: DCAB LTD 5.7L V8 Category ..........: G
    Year ............: 2008 Current Dealer ....: XXX-XXXXX
    Interior Color ..: LD13 LD13 Wholesale Dealer ..: XXXXX
    Exterior Color ..: 0040 WHITE Previous Dealer ...: XXXXX
    Body ............: DBL CAB 5.7L LTD Invoice Date ......: 02/08/08
    Number of Cyl ...: 8 Ship Date .........: 02/07/08
    Allocation Number: 012 Retail Date .......:
    Engine Number ...: 5206225 Date of First Use .:
    Vessel Number ...: 705 TRAC ..............: NO
    Vessel Name .....: TMMTX SANANTONIO Damage ............: NO DAMAGE
    PDI ...............: YES
    Fleet .............: NON-FLEET
    Port PDS Complete .: NO

    VIN .............: 5TFBV5814XXXXXXXX
    Ignition Key.....: N/A

    Factory Installed Accessories: FE AL
    Port Installed Accessories ..: C4 7J

    Retail Dealer
    Vehicle Base Model ....................: $ 38770.00 $ 33923.00
    Total Accessories .....................: $ 1048.00 $ 813.50

    MECHANICAL & PERFORMANCE
    GVWR = 7100 lbs. Payload = 1560 lbs.
    Tow Capacity = 10,300 lbs.
    381HP/401 Lb-Ft 5.7L DOHC 32V iForce V8
    w/Dual Independent VVT-I and ACIS
    6-Spd Auto w/Seq Shift and Tow/Haul Mode
    Engine Immobilizer, Cruise Control
    4WDemand 4x4 System w/Electronically
    Controlled 2 Speed Transfer Case
    Tow Equip: Hitch Receiver, Supp A/T
    Cooler, 4.30 Rear Diff w/10.5" Ring Gear
    150A Alternator, A/T Temp Gauge, 7 Pin
    Conn, Trailer Brake Controller Prewire
    Automatic Limited Slip Diff (Auto LSD)
    Front and Rear Sonar
    TripleTech Frame: Fully-boxed Fr Section
    Reinforced C Under Cab, Open C Under Bed
    Coil Over Shock Double A-Arm Front Susp
    Multi-Leaf Trapezoidal Rear Suspension
    18" Alloy Wheels w/P275/65R18 Tires
    EXTERIOR
    6.5'' Double-Walled Bed w/Tailgate Assist
    Color-keyed Fr/Chrome Rr Bumper
    Chrome Grille/Door Handles/Outer Mirror
    Sliding Rr Window w/Privacy Glass
    Fog Lamps
    INTERIOR
    Leather Trim Pwr Heated Front Buckets
    Automatic Dual Zone Climate Control
    JBL AM/FM 6-CD, 10 Spkrs, Aux Audio Jack
    w/Steering Wheel Audio Cntrls, Bluetooth
    Power Windows/Door Locks/Mirrors
    Remote Keyless Entry & Anti-Theft System
    SAFETY
    STAR Safety: Pwr Assist 4 Wheel Disc ABS
    w/Electronic Brakeforce Distrib (EBD),
    Brake Assist, Vehicle Stability Control
    with Active Traction Control (VSC+ATRAC)
    Dr & Fr Pass Advanced Airbags/Seat Side
    Airbags/3 pt Seatbelts w/Pretensioners
    & Force Limiters
    Roll-Sensing Curtain Airbags (RSCA)
    Tire Pressure Monitoring System
    Retail Dealer Total
    Vehicle Base Model ..........................:$ 38770.00 $ 33923.00 $ 38770.00
    50 State Emissions .........................
    20" Alloy Wheels w/P275/55R20 Tires ........ 920.00 736.00
    Carpet Floor Mats - 4 piece ................ 115.00 69.00
    Front License Plate Bracket ................ 13.00 8.50
    --------- --------- ---------
    Total Accessories ...........................: $ 1048.00 $ 813.50 $ 1048.00
    Destination Charge ..........................: $ 685.00 $ 685.00
    TDA .........................................: $ 400.00
    Gasoline ....................................: $ 10.00
    Dealer Holdback .............................: $ 775.00
    Whsl. Financial Reserve .....................: $ 387.00
    --------- ---------
    Total .......................................: Invoice: $36993.50 / MSRP: $40503.00
    Residual Value ...: 24 36 48 60
    ------- ------- ------- -------
    STD 22,599 20,273 16,583 13,482
    LOW 21,048 17,359 14,257

    Forget about all the itemized numbers, you just want to deal based off the total invoice (in bold), which already includes all options installed at the factory. Now, if the dealer installed additional options (rims, bedliners, exhaust, etc), that will alter the invoice. Stay away from aftermarket products on a lease, little if any can be residualized. Go for stock stock stock!!!

    Take this truck for example, the MSRP is $40,503, and the Invoice is $36,993. You would want to get as close to $36,993 as possible. So let's say they sell you the vehicle at Invoice, that's a dealer discount of $3510. So, in essense, they'd be selling you the vehicle/capping the cost at $36,993. Plus, if there is any factory lease cash/bonus cash available in your area, it will either be used to reduce your cap cost ($36,993) or be used as a down payment, or used to pay part or all of your inception fees. Remember, these are the monies you pay upfront which usually include: 1st mo payment + tax, dmv fees, doc fees, and possibly an acquisition fee. If the acquisition fee is not paid upfront, it will be "rolled" into your cap cost ($36,993 + $550 = $37,543). Understand??

    Hope this helps?
  • awedioawedio Posts: 46
    what is the difference between STD & LOW?

    are those residual figures based on 15k miles?

    Toyota's residuals seem to be a fixed no., they don't use a percentage like other manufacturers, is this correct?
  • STD is 15k/yr and LOW is 12k/yr.

    You have to move the LOW numbers over one to the right so the columns line up. TFS doesn't offer a 24 month residual for LOW. I know, weird!

    Yes, Toyota assigns a residual value to each individual vehicle instead of a set percentage. Some options will raise or lower the residual.
  • mi7mi7 Posts: 31
    Hi guys!!

    Please provide your guidance and wisdom...I'm just so annoyed that some dealers are treating trucks/suvs like they are in high demand.

    my goal is to get either a crewmax (4x2) limited, or a doublecab (also 4x2) limited at a reasonable price (for crewmax $500/month, and for doublecab, $450/month), but so far, after talking to 5 dealers, no results (or maybe so, but you be the judge).

    seems like buying a truck is harder than buying a lexus! i purchased an ES last year and a GS this year and so far negotiating on a friggin tundra is so much more painful...

    let's start with crewmax.

    Car's MSRP is at $43k . with all the rebates and incentives, Toyota of Long Beach said they could sell the car at $34k. with $1.5k down and standard 36 month/12k miles per year lease, I would need to pay close to $580/month or something ridiculous! I guess due to the huge $5.5k rebate, I cant take advantage of the superlow lease rate... this doesnt seem right! so far I have not been able to get the crewmax down below $500/month w/o increasing down payment--what's the strategy to negotiate here?

    I also looked at the doublecab (4x2 limited) MSRP $39k. best offer so far is selling price of $35k, with $1100 down the payment would be $495/month (includng tax) from toyota of anaheim (they said they went below invoice also minus the dealer holdback). similarly, toyota of orange offered $479 plus tax, but $1500 down.

    help advice? thanks!
  • Hi mi7,

    It's very simple, when leasing through the captive bank, in this case, TFS... the rebate ($5500) is NOT compatible with their lease programs. The money factor that is being offered equates to less than 1%, so look at it like as if it were a purchase... either take the cash (rebate) or choose the 0% financing, but you don't get both.

    Now, there is an additional $1000 bonus cash available that IS compatible with the lease, so make sure they either use this to reduce the cap cost, use it as a down payment, or pay some of your drive offs.

    My advice, since it's a Lmtd and a 2wd, your cap cost should be ~$1000 below invoice. So, figure about $4500 off MSRP to begin with, then make sure that the bonus cash ($1000) gets factored in somehwhere based on the aformentioned. So, on a lease, you should be "net - net" about $5500 off.

    Hope this helps.
  • mi7mi7 Posts: 31
    thanks, autoseeker. so my 4x2 doublecab limited should be abour $33.5k? wow thats gonna be tough ;)
  • all that money available in the form of a cash rebate, is in a sense, used to "subsidize" the low money factor.

    you also need to remember, although the rate is low, the residuals are not strong and will continue to fall for '08 models, and you are trying to lease a $40k + vehicle, so keep that in mind. ask the dealer what the reisdual is and i'll calculate your payments. confirm the bank fee is $550, too?

    good luck!
  • mi7mi7 Posts: 31
    here's some more info:

    For the 2008 4X2 Tundra Double Cab Limited with Navigation and 20" Alloy Wheels, Your Sales Price is $34,576.00 (MSRP is $39,080.00).

    36 month special lease = $481.65 total per month. $1,000.00 Drive Off, $1,000.00 factory rebate. Rate is 0.00060. Residual is $18,141.00 with 12,000 miles per year.

    60 month purchase with 0 % interest. $593.73 per month. $1,000.00 Down, $1,000.00 factory rebate. Total Out the Door is $35,623.65.
  • mi7mi7 Posts: 31
    well i got the car yesterday from toyota of cerritos.

    tundra doublecab limited 4x2 off road package, msrp $38,600

    leased for $488/month for 36 months based on tier 1 plus credit--had to put down $700.

    what do you guys think?!
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