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Toyota Prius Lease Questions



  • evahnulahmevahnulahm Posts: 19
    edited June 2010
    Ok, after going through the ringer of not showing me their calculations and numbers for a week I finally got fed up and went to another local dealer. I was leaving out the acquisition fee from the previous calculations and with that figured in everything works out.

    In 15 minutes I had the price I wanted and everything explained to my satisfaction.

    Here is what I got
    Prius IV in Barcelona Red with Bisque interior with mats, tint and bumper guard.
    36 Month Lease with 12K miles.

    MSRP 28,272

    Negotiated Price 25,782

    MF .00152 (SET MF is not nearly as good as elsewhere)

    Residual 58% plus 2400 residual assistance = 18,798

    I am paying 950 out of pocket to cover tax, tag, title, doc fee etc.

    Payment for 35 more months is 284 per month.

    I feel like I got a fair deal so I am happy, especially since the car had to be retrieved from another dealer as the red with bisque was nowhere to be found locally the way I wanted it.
  • lrtucker9lrtucker9 Posts: 1
    I have combed through this Prius blog entry by entry; however, does anyone have an accurate "lease payment calculator"?

    I'm looking at the following 2010 Prius III:
    .00075 MF
    16,184 Residual
    24,800 MSRP

    When plugging in the monthly figures for the previous posts, I'm not generating a similar figure.

    Would also appreciate any feedback for someone who has leased a Prius in the Dallas area.
  • bruin19bruin19 Posts: 3
    Dear Prius Gurus, I'm looking for honest opinions on the deal I just signed in So. California (I'm losing sleep over this and just need to know if it's good or not to ease my mind!):

    2010 Prius III (Black, Grey Interior, Cloth Seats, Navigation Package)

    Total Agreed Upon Value (Sale Price): $24,646
    Acquisition ($650) Doc Prep ($45) CA Tire ($8.75) DMV eFiling ($29)
    Residual: $16,333
    MF: .00075 (1.80%)

    I had about $2,200 in Negative Equity from my trade-in (an '08 Prius), so the Gross Cap Cost was $27,617 (all the above plus $2,200).

    Monthly payment came out to about: $372 / month. Based on my calculations, without the $2,200 Negative Equity, my payments would be about $308 / month.

    THANK YOU in advance for your comments/thoughts even if they may not be positive!
  • delta737hdelta737h Posts: 606
    edited June 2010

    Nice screen name. Did you attend UCLA? Anyway, I need a bit more information in order to evalute your deal such as MSRP, detailed itemization of options added (if any), amounts financed (i.e. capitalized), cap reduction, and tax rate. You didn't specify the term. I'm guessing 36 months. If so, and assuming you made no cap reduction, I get a base payment of...

    0.00075 x (27617 + 16333) + (27617 - 16333) / 36 = 346.41

    The money factor looks good and I assume that it reflects the buy rate. The only other item that drives the deal is the sell price. Without knowing the items described above, I really can't comment further.

  • dwynnedwynne Posts: 4,018
    Where is the acquisition fee? Maybe that is rolled into the lease since I don't see you list it as being paid by you up front.

    What is "residual assistance" ? I am pretty sure you can't residualize the tint, mats, and bumper thingy on a Toyota lease...
  • dwynnedwynne Posts: 4,018
    The MSRP you list is not the real MSRP, it is the MSRP + the options and dealer installed accessories. Normally options and dealer installed stuff can't be residualized on a Toyota lease or only parts of certain ones can. That means you pay 100% of the cost. A II MSRP is $22,800 NOT including the $750 destination fee or any options. On a 12k per year lease residual should be 68% or $15,504. If your residual is $15,960 then you are getting $456 of help on the residual out of the $1,287 MSRP of options / accessories on the car. This is 35.6% of the "MSRP" and not 68% like you get on the rest of the car.

    So you are paying for and interest on 100% of the destination charge, and 64.6% of the options / accessories - and of course interest on the full price of the car and principle on 32% of it.

    If ALL you pay at signing is $249 - nothing else, not even first payment, then depending on your tax rate this is not bad. There is a $650 bank fee to be paid, taxes, title, license fees, first payment, etc. Sounds like it is all rolled in to the deal.

    The key is the selling price of the car - how much are you paying for it? The net cap cost before any fees or cap cost reduction is applied?

    The III MSRP may be the same /similar, but with no options the whole MSRP (less destination) can be residualized. I also do not know the III residual percent, but I would GUESS it may be a little higher than the II. With a higher percent, same MF, and more of the MSRP being able to be residualized you may find the payment is less.

    The residual should go down 2 points from 68% to 66% if you go with 15k on the II. You will have to calculate the new payment and see. Keep in mind, your residual dollar amount is not derived properly from full MSRP so you will be unable to figure it for yourself exactly.
  • unemployableunemployable Posts: 5
    edited June 2010
    finally decided to go with a prius :) my first hybrid, need some help leasing one and not overpaying. Can you guys tell me what I'm looking for in terms of prices per month based on the info provided below:

    I'm in New Jersey (Bergen County to be specific)
    Lease Term: 36 12k/miles or even 10k
    First Month Payment only down.
    I'm looking for a Prius II, or Prius III, no options necessary. Need the payment to be less than $250.. Is this possible?

    Called Dealer #1
    Prius II
    MSRP: 23,819 (Floor mats and Rear Bumber Application, which i don't need)...
    Money Factor: .00020
    Terms: 36mo, and 12k miles
    Residual Value- 15,504

    He would not give me a monthly Lease price, said he needs me in the dealership.. I Dont want to waste my time or his time, so I need to be educated on what to expect and how much should i be paying

    Called Dealer #2
    MSRP: 23,750
    Money Factor: .00020
    Terms: 36 mo and 12k miles
    Resisdual Value - 15,504
    No money down only first month payment he said it will be $265 a month. Is this good? can i get him under $250?

    ... Please help :)
  • delta737hdelta737h Posts: 606
    edited June 2010

    First, in answer to your questions, $265 is not good. I'm absolutlely certain that you can get a payment below $250. Are you sure that the money factor is 0.00020? I thought it was 0.00075. Even if it is 0.00075, I'm fairly certain that you can get a payment below $250. You left a few items out (e.g., doc fee, acquisition fee, sales tax rate) and so I'll try to cover all the bases.

    1st Rule. Never allow the dealer to control the deal.

    2nd. Rule. You hit the nail squarely... educate yourself about leasing. Here's a start for whatever it's worth...

    A huge item that is often overlooked in leasing is the treatment given sales tax. On October 1, 2005, New Jersey joined a 22 state coalition and bought into the Streamlined Sales and Use Tax Law. The key points governing sales tax treatment given to motor vehicle leases in New Jersey, under this law, are briefly summarized in the following document…

    An important provision is described at Item 12 in the above doc…

    "12. The Division has indicated that the tax base will be reduced by the value of a trade-in of property owned by the lessee that is accepted by the lessor as partial payment.

    (a) Does this rule apply under both the original purchase price method and the total lease payments method?

    (b) In determining whether the lessee is the owner of property, what is controlling (i.e. GAAP, UCC, tax treatment)? For example, a lessee trades in property subject to a finance lease. Is the tax base reduced if the lessee is considered the owner for GAAP purposes?

    Since the tax is imposed on the lessee, the trade-in credit is applicable under both calculation methods. However, in both cases, the lessor must disclose the tax base (purchase price or lease payments), as well as the amount of sales tax due, on the paperwork provided to the lessee. As long as the property traded in was originally acquired by the lessee, it does not matter if there is an amount owed to pay off a loan. The trade in credit is based on the amount of value allowed by the dealer/lessor against the lease."

    This document also describes the two methods for computing sales tax in NJ:
    (1) tax rate x manufacturer’s invoice price (Item 7) and;
    (2) tax rate x total taxable lease payments; otherwise, known as the total payment
    method (Item 8)

    Either way, you can roll the tax (finance) into the lease (see below). More than likely, you’ll want to opt for (2- total payment method) as it is usually the cheaper of the two methods.

    The best way to illustrate the sales tax calculation methodology and, subsequent lease payment calculation, is to use a concrete example. Because the first method is straight forward, I’ll describe the second using a hypothetical example. What follows is somewhat long-winded, so please hang-in. Consider a lease, originating in NJ, with the following data…

    Adjusted MSRP………….…… 22,800
    Sell Price (S)...…………….…... 20,000 (negotiated)
    Acq. Fee (A)…………….…….. 650 (Acq Fees are taxable in NJ)
    Trade Equity (Q)...………..…… (500) (we’ll assume financed negative equity- NOT taxable in NJ)
    Cap reduction (D)…………...… 600 (assume $600 cash down- taxable in NJ)
    Cap reduction: trade credit (T).. 1,000 (assumed trade-in allowance- NOT taxable in NJ)
    Money factor (F)………………. 0.00020 (assumed)
    Residual Factor………………. 0.68 (assumed)
    Residual Value (R)…………. 15,504 (Residual Factor x Adj. MSRP)
    Term (N months)....…………. 36
    NJ Sales Tax Rate (t)………… 7.00% (assumed)
    NJ Sales Tax (X)................... _____ (to be computed... see below)

    Note that the entire trade-in value of $1,000 is non-taxable in NJ; regardless of the fact that a $1,500 loan balance remains outstanding producing negative equity in the amount of $500.

    Taxable Payment = F x (C + R) + (C – R) / 36

    For purposes of computing the taxable payment, the adjusted cap cost is...

    C = S + A - T
    = 20,000 + 650 - 1,000
    = 19,650

    Taxable Payment = 0.00020 x (19,650 + 15,504) + (19,650 – 15,504) / 36
    = 122.20

    NJ Sales Tax Payment Liability = X = Total Payment Tax
    = (t x N x Taxable Payment)
    = (0.07 x 36 x 122.20)
    = 307.94

    The taxable payment is NOT the "lease payment". It's only purpose is to compute tax liability and is, therefore, an intermediate calculation.

    Now, let's compute the LEASE PAYMENT...

    The new adj. cap cost is C* = S + A - Q - D + X
    = 20,000 + 650 - (-500) - 600 + 307.94
    = 20,857.94

    Lease Payment = 0.00020 x (20,857.94 + 15,504) + (20,857.94 – 15,504) / 36
    = 155.99

    Observe that I rolled the acquisition fee (A), negative equity (Q), and taxes (X) into the lease payment calculation. Of course, you can elect to pay these upfront if you like. Also, note that the only roll that the trade-in value plays, in this example, is to compute the taxable payment. Beyond that, it's irrelevant and is not used to compute the lease payment. This is triggered by the fact that money is still owed (which the dealer pays) on the trade.

    Your intitial costs, payable at lease inception, are assumed to be the the 1st payment of $155.99, plus $600 down, plus any required security deposit ($200), plus DMV fees and dealer doc fees, plus any other miscellaneous fees, plus applicable taxes on upfront fees.

    You can use the above and apply it to your own situation. For instance, if you don't have a trade or, equity in a trade, simply replace the assigned values above with zero. If you're not putting any cash down, then replace 600 with zero.

    The most important items in any lease transaction are the money factor and selling price. You should always try to get the buy rate (money factor with 0% reserves) and negotiate the lowest possible sell price. Check Edmunds for invoice price information and scan the posts to see what others are paying in terms of sell price. Also, check overstock at for competitive sell price information in your area.

    Questions? Please let me know.


    PS: Never put money down on a car as it's a depreciating asset. If the car is totaled or stolen and, never recovered, you risk losing a portion of or all of your down payment. Down payment means cap reduction.
  • linhtwulinhtwu Posts: 15
    I will be signing a deal this weekend or Monday. Prius III with mats and nothing else. To keep it simple for comparison sake, my payment will be $249 plus tax or $265. I will walk out of dealership paying $331 with 35 payments left over. Lease is for 3yrs, 36k miles, residual of 65% or $16184. Lease factor is 0.00075. I think I got a very fair deal.
  • dwynnedwynne Posts: 4,018
    Wow, lots of info in that detailed post.

    A couple of points: the residual you list is valid for a II with no options, the residual for a III would be $16,194.

    The correct MSRP should be $23,550 - you left out the $750 destination charge.

    Invoice including destination is $22,785 and hold back is 2% of MSRP, say $456 if we don't include destination in the calc. With no other known incentives that can be combined with the cheap lease deal, I don't see any way someone could get your $20,000 negotiated price. Prices do vary by region as do the lease deals, but I still don't see that number possible AND a cheap lease deal.
  • delta737hdelta737h Posts: 606
    edited June 2010

    If your read my post carefully, you'll discover that my example is purely hypothetical. I don't know the exact MSRP and I routinely include destination in the MSRP as most fund providers residualize destination. However, TFS may be an exception. I simply rigged the MSRP so that 68% x MSRP = 15,504. And, of course, it came out to $22,800 (recall your leasecompare post). Also, my sell price of $20,000, again, is strictly hypothetical. I leave it to the reader to supply the correct information. This was purely a teaching exercise in which I supplied a template with hypothetical data. The data can be changed to meet the requirements of a specific lease transaction.

    Regarding a payment of less than $250...

    If we assume an adjusted cap of $23,450 (including acq fee and NJ taxes) and a $15,504 residual coupled with a 0.00075 money factor, the payment is $249.94. So, yes, an under $250 payment expectation is very realistic and certainly doable for a II in NJ.

  • whats the MSRP on your vehicle? and what is the major difference between the II and the III? should my II be less money?
  • John, thank you very much for your post, but the residual i posted is actually .0020 and not .00075, am i being misled?
  • delta737hdelta737h Posts: 606
    edited June 2010

    Actually, you posted .00020 which seemed extremely low which is why I asked if you were sure as I was thinking that it should be 0.00075 instead.

    If you have excellent credit, you should be able to get the top tier rate which is 0.00075. The 0.00200 money factor seems very high. A credit score in the 650-690 range could trigger such a high money factor.

    At 0.00200, there is no way that you're going to get a payment below $250 unless your adjusted cap is $21,790. If, indeed, you can't do better than the 0.00200 money factor, I would take the $265 payment and run with it! Before you do anything else, though, double check that money factor because that's very critical.

  • linhtwulinhtwu Posts: 15
    Difference between 0.00075 and 0.0020 lease factor is about 3% interest or 1.8% vs 4.8%. Just an FYI for comparison in real interest rate terms. Good luck.
  • linhtwulinhtwu Posts: 15
    I will be singing Prius III lease for $246/month, 35 payments left and paying $331 walking out the door. Hope to have this done early next week. Good luck.
  • delta737hdelta737h Posts: 606
    edited June 2010
    Thanks, linhtwu. I'm aware of the difference of the approximate interest rate equivalents between 0.00200 and 0.00075. The interest rate obtained by multiplying the money factor by 2400 is only an approximation but it's very good appproximation as it's extremely close to the actual rate. The smaller the difference between the adjusted cap and the residual, for a given term, the better the approximation. This means that lower depreciation values give better estimates.

  • Hi everyone, I need a car asap and I need your help to see which one is a better deal with zero down if purchase. Thank you in advance.

    Here are the deals:

    Prius II Lease Option:
    Amount due at signing includes DOWN PAYMENT of $1,800, FIRST MONTHLY PAYMENT of $199 and no security deposit. Tax, title and license are extra. Based on MODEL #1223 (5 Dr. Hatchback) TOTAL MSRP $24,374, & NET CAPITALIZED COST of $22,273. LEASE END PURCHASE OPTION is $15,232 plus tax, title and license. Customer is responsible for excess wear & tear and 15 cents per mile over 36,000 miles. Dealer participation may affect final negotiated price and applicable taxes. NOT ALL CUSTOMERS WILL QUALIFY. Payments are calculated using TFS Tier 1+ rate. Other tier credit payments are higher. Offer ends 8/2/2010 and you must take delivery from dealer stock between 6/2/2010 and 8/2/2010. Offers available in AR, LA, MS, OK, and TX. 2010 EPA 51/48/50 city/highway/combined mpg estimates. Actual mileage will vary.

    Prius II Purchase Option: $24,000 walk out
    0.0%, 2.9%, 2.9% Annual Percentage Rates (APR) on all new 2010 Toyota Prius Models available to Tiers I+, I, II and III customers with approved credit through Toyota Financial Services only. Special APR available on 36 month loans, monthly payments of $27.78 per $1,000.00 borrowed; 48 month loans, monthly payments of $22.09 per $1,000.00 borrowed and 60 month loans, monthly payments of $17.92 per $1,000.00 borrowed. Offer ends 8/2/2010 and you must take delivery from dealer stock between 6/2/2010 and 8/2/2010. Not available with lease offers. Dealer sets final price. Contact Dealer for details. Offers available in AR, LA, MS, OK, and TX.
  • dwynnedwynne Posts: 4,018
    "Residual 58% plus 2400 residual assistance = 18,798 "

    What is "residual assistance" ?
  • dwynnedwynne Posts: 4,018
    Look at the fine print details on the lease and see what the money factor is (MF). Multiply by 2400 to get the effect interest rate. Is it higher or lower than the buy rate? Here they are doing 1.8% effective lease.

    Notice also the lease deal is limited to tier 1+ while the purchase rate is available to those with lesser credit.

    Leasing is not for everyone, no matter if a lease deal is better than a purchase deal. If you drive a lot of miles, trade cars often, don't take good care of your cars, or don't have top notch credit then leasing is not for you.
  • dwynnedwynne Posts: 4,018
    edited June 2010
    The biggest no brainer I have seen in leasing :D .

    The MSRP on the III is $1,000 more than the II and that is just for an upgraded stereo and BT hands-free. Does not sound like most folks should or would want to pay that extra, but that is not the case if you are leasing.

    The invoice difference between the II and III is $750 so that is (hopefully) all the extra you will be asked to pay when you negotiate your selling price. The good news is that the residual percentage is the same for both, So if you have a II with just mats and III with just mats you are looking at $23,750 MSRP, $22,912 invoice and $24,750 and $23,662 invoice.

    Residual (here, anyway) is 68% of MSRP not including the mats or $750 destination for 12k leases and 66% for 15k leases. So $22,800 * .68 = $15,504 * .66 is $15,048 for the II and $23,800 * .68 = $16,184 * .66 = $15,708 for the III.

    So on the 12k lease the residual difference is $680 and $660 for the 15k. Since the difference at invoice between the II and III is just $750 then your extra cost for the III over the II is just $70 for the 12k lease and $90 on the 15k lease! Divide by 36 payments and you have < $2 a month or $2.50 more to get the III (plus interest, but here that is 1.8% effective using 0.00075). Now that is a no brainer if I ever saw one!!!

    The only downside is that it is easy to find a II equipped like you want it, there are few options (mats and bumper thingy being the most common) while a lot of the III models are loaded up with the NAV pack or NAV + roof pack. For pennies a day it is worth finding a non-loaded III and enjoying your upgrades :-)
  • linhtwulinhtwu Posts: 15
    Just signed a lease on a III for $246+tax. The lease on a II would have been $239. I figured the $7/month was getting upgrade stereo and BT.
  • What options did you get with the III? I am looking for a III with the roof, no leather. Wondering how much they are leasing for with zero down. I am in Cleveland Oh 44067
  • dwynnedwynne Posts: 4,018
    The III does not come with leather. W/O any options you are looking at $275 to 299 plus tax, but the fees and rates and taxes do vary widely. The roof and nav package adds $3,166 to invoice (what a rip) and maybe $1.5k or something to residual. So the high residual that makes the Prius such a good lease does not extend to the options.
  • linhtwulinhtwu Posts: 15
    Eaasternguy2.....Only option I got was floor mats. If you are interested, I can send you the email of sales person I dealt with. She was up front and gave me the best quote from the beginning. I was very pleased and transaction was easy as I was in/out of dealer in about 60 minutes on delivery.
  • dwynnedwynne Posts: 4,018
    edited July 2010
    Picked it up the other night for my wife.

    Prius III with just mats and the dealer installed remote start (0% residualized, of course).

    MSRP: $24,750 + remote start ($529 or more)
    Sell price: $23,985 including remote start
    Acquisition fee: $650
    Doc fee: $250
    Taxes / fees / tags / title: $99
    Net Cap cost: $24,984 including remote start
    Residual: $15,708 (high mile)
    Term: 36 months / 15k miles per year
    Money factor: 0.00075 (1.8%)
    Payment: $288.19 + tax
    Due at signing: first payment + tax

    Not the world's best deal, but I thought it was a nice deal. My wife loves the car so far. I did get quotes from several other dealers, one that came too late was $268.64 plus tax per month with just 1st payment due at signing. This was for a III with just mats, no car starter at this price.
  • dmannjdmannj Posts: 2
    Toyota is offering a lease deal in the NY/NJ area:

    "Valid in NY, NJ and CT only.
    Lease a new 2010 Prius for $179 a month for 36 months with $1,799 due at signing, which includes $1,799 down payment which totals $1,620 down, and $179 first month's payment and $0 security deposit.
    Example based on model #1223. Base MSRP excluding freight is $22,950. Monthly payments of $179 total $6,444."

    What other fees can I expect? What is a Lease inception fee? Tax in NJ is 7%. Does this apply to $179. per month or part of it?
  • delta737hdelta737h Posts: 606
    edited July 2010

    Lease inception fees are fees that are due and payable at lease inception such as DMV fees and taxes. For instance, both NY and NJ require that taxes be paid at lease inception. However, taxes (or any fee for that matter) can be capitalized (i.e., financed) in the lease. The fund provider simply pays them on your behalf and, then, finances them in your lease. Doing so, of course, will increase your payment. The $170 payment in the ad does not include taxes and assumes they're paid upfront at lease inception by you.

    Besides the acquisition fees, other fees include DMV/Gov fees, dealer doc fee, and taxes. You may want to read my post #170, for whatever it's worth, to get an understanding of the entire process.

    Hope this helps.

  • cestlaviecestlavie Posts: 1
    I'm currently looking for a Prius II in MA and it sounds like you got a great deal with $215/month and zero down. Any chance you could share where you bought the car and a breakdown of what you negotiated?
  • artwheelsartwheels Posts: 6
    Recently, I researched car leasing extensively. As my local dealer agreed to a deal of 0 down, & $200 monthly payments for 36 months; I leased a 2010 Prius II yesterday. I spent 3.5 hours attempting to ensure that the deal was correct. Initially, the incorrect inflated monthly payment was corrected. However, the dealer refused to change other things I questioned. Today I have some questions/concerns about those figures. BTW, the dealer told me I have a 10 day grace period, which I&#146;d be surprised if true. Three basic questions:

    1. The amt due at signing was incorrect, & instead of lowering other fees, the dealer refused to change the contract & instead gave me a so-called &#147;Bill of Sale&#148; w a hand-written note that dealer &#147;to pay DMV fees of $274.13 (the amt overcharged via our agreement). Is this legit? Will the dealer pay the DMV fees?

    2. Some basic figures were correct (ie: the sales price, monthly payment and total monthly payments); however, others were not (ie: cap cost reduction [my trade-in is shown in the one section, but not on the line for cap cost reduction, instead another fee half the amt of the trade-in is shown], adjusted cost reduction & adjusted cap cost are incorrect&#151;higher than they should be). Depreciation & rent charges are shown, whereas I didn&#146;t have them in my worksheet. Is it a problem that the basic figures are correct, but others are not? Do I need to go back to the dealer and tell them to revise the contract and make it correct, so I don&#146;t run into problems in the future? Can cap cost reduction, adj&#146;d cost reduction, & adj&#146;d cap cost come into play in the future, or are they only used to calculate the monthly payment?

    3. The receipt for my first month&#146;s payment only shows that it was paid, it doesn&#146;t show the balance due. When I asked the dealer about this, he said it doesn&#146;t show the balance. I&#146;d feel better if the receipt showed the balance due, esp since the contract shows an inflated amt due.

    Thank you for your response! I appreciate your feedback & advice.
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