A Guy Walks into a Dealership...

You are absolutely correct. I listed the prices incorrectly by roughly $1000. My silver one was 31900 and my sisters pearl white was 32100. I just looked at the contract. I was satisfied with the price. I think the prices were fair.

 

sure, it's another form of financing, but i think people fail to look at the total cost a lot of the time when dealing with leases. in this case, the poster I was responding to was happy with paying ~$30,500, which, as should be clear to everyone, is an insane rip-off for someone in New York, because a fair price is around $24k after the IRS rebate (that's a difference of $6000!).

re: leasing companies making corrections, well, that happens with regular car loans too, as we both know of course, you can just as easily finance the sales tax when you buy, so you wouldn't be paying it "up front" either, really.

Moshi: you are absolutely correct, the different components of the lease (namely, the 3-year cost as well as the residual) do make a difference. The poster said that the residual was just south of $18k. At that price, it seems like the right thing to do here would be to do what you did with your Pilot. I'm going to do some math here – let me know if it's way off the wall. Pricing out a similarly-equipped 2010 Prius Three, which retailed for $23k new, gives me $20,200 on KBB. That's a $3k loss or 13% depreciation. $18k is a $10k+ loss and a 40% depreciation. I cannot believe that the PiP will lose that much value in just three years. But the total price paid for the car is still the total price paid – if you bought the car for $6k less to begin with and then sell it for the same price as if you had leased, you still come out $6k ahead at the end of the day. No?

 

I'm not sure how my prices are considered "an insane rip off". The silver lease was 31900 less rebates of 6250 for a cap cost of 25650. The purchased white pearl was 32100 less 4000 less 2500 from Feds = 25600. These figures obviously don't include taxes or finance charges. I certainly don't feel ripped off. Went in with eyes wide open. We both are loving these new cars! I'm averaging 86 mpg for the first 550 miles!

 

You might not feel ripped off, but again, most people are paying a cap cost of 26k BEFORE the federal rebate. So you overpaid by 2k. Other people who are not able to take advantage of the nurses rebate would be overpaying by 4k.

 

lensovet,

can I suggest you add a section to the FAQ about leasing and financing, to go with the purchasing section. the subject is worthy of a "de-mystification".

 

I'd love to, but I'm not exactly sure what the question would be, as well what the answer to it is. Lol.

 

"How to compare/evaluate cash purchase, TFS leasing, and TFS car loan."

maybe an example of each in a table that highlights things like where the federal tax credit goes in each case, how TFS incentives show up, where dealer incentives show up, etc ...

 

It almost feels like a lost cause. There's very few deals left to be had this year – did you notice that Dianne doesn't have any base 2012 pips left?

 

didn't notice but I'll assume that Toyota will still be selling/leasing/financing PiPs for awhile, and that the federal tax credits might survive into 2013 as well.

In the spirit of "information is power", it would be a great addition to the FAQ.

 

Toyota leases are slightly different because their residual value is based on a a dollar amount, not a percentage. So if you have options like cargo tray and floor mats, they don't carry any value at the end of the lease. Toyota has also been known to set a high residual in order to make a lease payment more attractive, which means the market will be flooded with lease returns in 3 years, lowering car values.

source: Slashing lease prices could be a risky move for Toyota - Los Angeles Times

Bottom line: low money factor (multiply 2400 to get the effective interest rate), big incentives on selling price, and high residual make for attractive leases. If you can score a 90+ on this lease calculator, then it's a pretty good deal

source: RIDE with G Auto Lease Calculator

Lensovet:
Prius 3 residual is $16,106 @ 12k miles per year (meaning depreciation is 37.5% if MSRP is $25,765 and effective residual percentage is 62.5%). That is VERY high -residuals like this are usually only seen on BMWs.

source: Lease residuals finally determined! | PriusChat

Problem with high residuals like this is that the payment is more "affordable" upfront but the car's value at the end of the lease will be way higher than market value. Ever try trading in a BMW or Mercedes? Market value usually has several thousand dollar difference with the trade-in or buy-back value. If federal rebates are applicable to PiP leases, this may be the best solution (especially if you're buying it for the the carpool sticker that expires on Jan 2015).

But to answer your question, leasing it with what I consider an "inflated residual" will most likely show negative equity if you got it appraised at the end of the lease at CarMax. The market value will reflect the discounted prices from incentives.

Here is a good example of the trouble that looms:
Shocked at how low the Prius Plugin resale value is, watch out! | PriusChat

Food for thought