2010 Prius TFS Leases: What are the Residuals and MFs?

Discussion in 'Gen 3 Prius Main Forum' started by ÃœberDork, May 26, 2009.

  1. ÃœberDork

    ÃœberDork New Member

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    Used the search function, but didn't see anything on this . . .

    Planning on ordering a Prius IV - Barcelona Red Metallic with Bisque Leather and Sunroof Package.

    Who has the current rates, i.e. the residuals and money factors for 24 month or 36 month leases from Toyota Financial Services?

    I own a business and can write off a lease easier than I can depreciate a vehicle.

    Thanks in advance for your help. :D
     
  2. Jabber

    Jabber Chicagoland Prius Guy

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    Both the rates and residuals will vary according to your location. GREATLY vary.
     
  3. stream

    stream Senior Member

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    Current money factor (for credit score of 720 or higher) is 0.00285. Be aware that some dealers will try to mark it up. :mad:

    I'm not sure if residuals vary by Prius model, but for a Prius V w/ nav, residuals (which are based on MSRP, excluding port installed accessories) are:
    24 month lease: 15K miles/year = 70%; (12K miles not offered)
    36 month lease: 15K miles = 63%; 12K miles = 65%

    The residuals are included in the vehicle inquiry report, and are shown in $, but I translated to % above. These are applicable to SF bay area, but probably apply to some other regions as well.

    For those interested, I've attached below a spreadsheet that calculates the lease payment--just input the assumptions in red. An unscrupulous dealer can turn leasing into a shell game if your not familiar with the mechanics of it, since there are a lot of moving parts, so understanding the calculation helps avoid that game.
     

    Attached Files:

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  4. Jabber

    Jabber Chicagoland Prius Guy

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    Residuals are definitely different based on the different models. Stream is right, the rates will vary per dealer.

    After checking different regions, it looks like the residuals are the same for all vehicles of the same model code. This may or may not apply to GST and SET regions though as I can't see your cars.
     
  5. ÃœberDork

    ÃœberDork New Member

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    Thanks for your answer, stream.

    That's exactly the information what I was looking for.

    P.S. Here's a spreadsheet I've used for years that also does a good job of calculating a lease.
     

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  6. DianneWhitmire

    DianneWhitmire High PRIUStess

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    Residual for 36 months at 12K annual for a IV with SR options is $18777.
    It's 18,261 at 15K annual.
    Lease for 24 months is only write-able at 15K annual and the residual is 20,067.

    Rates vary based on credit score, encore, etc... best rate right now is approx .00285

    Dianne, who has that car coming in late June. :)

    __________

     
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  7. ÃœberDork

    ÃœberDork New Member

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    Thanks Dianne. It looks like you are a great resource here at PriusChat. Nice to have someone with accurate information providing information.

    Can you also answer these questions:

    - Does TFS still offer MSDs here in CA? Is there a benefit (i.e. reduction in money factor) for doing so? And what is the maximum number of MSDs can you apply towards a lease? For example, BMWFS gives a .00007 discount with up to 7 MSDs for a total possible rate reduction of .00049

    - Is there a different money factor if I decide to do a one-pay lease? Do rates also vary based on credit tier for one-pay. (I am not Tier 1)

    - Is there a money factor discount for encore? I've had previous TMCC leases and currently have a TFS loan.

    Thanks.
     
  8. DianneWhitmire

    DianneWhitmire High PRIUStess

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    OK sweetie... I am not in finance.
    I have some very limited knowledge of this more technical detail below; it's not an area I have detailed daily handling of. You need to be asking your dealer where your own car is ordered what they do and can offer you. Where's your car been ordered?
    Di

     
  9. ÃœberDork

    ÃœberDork New Member

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    I haven't ordered it yet. So when I do, I will need to get those questions answered from the dealer.

    Thanks again for all your help.
     
  10. DianneWhitmire

    DianneWhitmire High PRIUStess

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    OK, let's say I am your dealer.
    Here's how I'd handle your finance questions.

    The max MFDs TFS will nod to is 9. That's .00008 per MFD or max .00072 discount. This is customarily done when folks have less than stellar credit and want to conserve on the rate. Personally, I have always felt is a crapload of cash to tie up for 36 months just to save a few $$$, but again - it's only my opinion! :cool:

    The 1-pay lease is a reduction for .00100 so if the rate was supposed to be .00330, you'd be at .00230 (example).

    Encore is a small reduction is .00010 (so a .00285 would be a .00275 and there ya go!!

    Di





     
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  11. AirKuhl

    AirKuhl New Member

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    For a Model IV with SR, my total lease cost for 36mo/12k miles is ~$19.3K, and with the max additional $5K deposit, it's ~$17.9K.

    About a 28% return over 3 years if I look at it as an investment, or roughly an 8% APY.

    Currently my bank pays under 1% APY for it sitting in my savings account, and a high yield 3 year CD is around 3% APY. Considering there is no risk with the MSD's, it's not a bad investment all things considered.
     
  12. fred garvin

    fred garvin New Member

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    it would be a little higher than 8% because you will be getting the payback each month for 36 months, like an annuity, so there is a slight time value of money bump to the apy

    have you calculated the advantage of paying cash vs lease (assuming you have the cash)?
     
  13. AirKuhl

    AirKuhl New Member

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    Hi Fred,

    Yes, you are correct about the value of money, but I didn't calculate that because it's a bit more complicated for a minor difference, and it just reinforces the value of the MSD's anyway.

    For a 2010 Prius I'm almost positive that paying cash works out far better financially because although the residual is high, which is good, the MF is pretty high too, 6.8% interest rate, or 5.1% with MSD's.

    I'm leasing because I'm not interested in going through the hassle of selling the car after I'm done with it, and also because I'm using the money for my track car. (4 MPG, leaded fuel, no catalytic converters, BWA HA HA! :rockon:)
     
  14. fred garvin

    fred garvin New Member

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    i have leased a few cars, usually to get me into a vehicle i couldn't afford to buy over 4 or 5 years, then i bought them at the end of the leases for the residual.

    Good luck racing!
     
  15. AirKuhl

    AirKuhl New Member

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    Thanks!

    Leasing can be the cheapest way to get a car if you get the right deal. I leased then bought my Toyota Land Cruiser. It had an amazing lease deal, .00003 MF. Selling price was $4K under invoice, and I was able to negotiate $2K off of the residual value at lease end. Ended up cheaper to lease it than to pay cash, and that's even before getting into the whole value of money aspect.

    Buying or leasing a car is a complicated thing to do financially. There are a lot of urban legends and old wives tales about how one way is always better than another, but occasionally there are deals out there that make some leasing or financing options the best possible way to buy a car.

    Probably not for the 2010 Prius anytime in the next couple of years though.
     
  16. syncmacd

    syncmacd Waxing is Relaxing

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    Disclaimer: I am not a tax attorney. I am not an accountant. I am not even very good at math. But here is my calculation of the deductions of cash vs. lease

    Actual Year 1 Year 2 year 3 Year 4

    Cost 25,000
    Max Allowed 10,960 4,800 2,850 1,775
    Basis 16,780 13,180 11,043 9,711
    Business miles/yr 12000 12000 12000 12000
    total miles/yr 16000 16000 16000 16000
    gas 750 800 850 900
    insurance 1,200 1200 1150 1100
    maintenance 800 800 850 900
    taxes 400 400 380 360
    "Interest,4%,48m" 900 660 414
    "Lease, 6.4k/y" 6,400 6,400 6,400


    Deduction,bus mile % 8,768 3,840 2,280
    Lease write off 7,200 7,223 7,245
    Mileage 3850 6600 6600


    I used the MACRS (modified accelerated cost recovery system) to depreciate the car. This also includes the bonus $8k depreciation for purchasing a new car in 2009.

    The assumptions: Car cost of 25k, lease cost of 19.3k over 3 years. Driving 12k for business and 16k total, so 75% business usage.

    I apologize, this looks confusing, but the important parts are the bottom 3 rows. For the first year purchasing the car gives the largest deduction at $8768. The lease has the second highest deduction at $7.2k. Mileage has the worst, assuming purchase on 6.1.09 and prorating 7/12 of the year.

    In the second and third year instead of using MACRS a purchasing business should use mileage instead.

    Surprisingly, 3 years of lease ($21,668) vs. 1st year MACRS and years 2/3 of mileage are pretty similar ($21,968).

    The question is: what are you going to do with the car at that time? If you intend to replace the car then by leasing you don't have to worry about finding a buyer.

    I shudder to think how many mistakes I have made in this calculation, any accountants out there please feel free to correct any mistakes I have made.

    Cheers, Rich

    Sorry, I cannot get the rows to line up after converting from Excel.
     
  17. fred garvin

    fred garvin New Member

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    syncmacd

    i wasn't looking at it from a business POV and taxes, but your analysis is valuable to someone with an ability to writeoff the car expenses. I was simply wondering about lease vs buy from a personal pov, with an assumption that buying is better, offset by having to deal with disposing the asset when you are done with it.

    i suppose one could do a 36 or 48 month lease ve buy compare, then a lease for 36 THEN buy and hold for 3 more years vs a buy and hold for 6 years, and the buy side could be cash vs finance.

    Thats a lot of variables.

    I am buying with cash using money that is at ING making a paultry 1.5% now.
     
  18. Jabber

    Jabber Chicagoland Prius Guy

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    It is a no-brainer if you have money sitting around at 1.5%. Pay cash and be done with it. The minimum buy rate will be over 5%, and the minimum lease rate is in the high 6%.
     
  19. eglmainz

    eglmainz New Member

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    Take that paultry 1.5, give it to Jabber at Pauly for a Prius V. (five for those of you not following along) ;-)

    I'm a poet, and didn't even know it. Sorry, I could not help myself.
     
  20. fred garvin

    fred garvin New Member

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    i would LOVE to do business with Jabber because i really appreciate his contributions here but i can't do the fly-in drive back here to northern virginia. i have a 500 below msrp on a IV solar nav in blzd pearl, black, red or blue, refundable deposit, 22nd in line deal and hope i can get mine in June. if i could get solar nav and ATP and 17 inch wheels i would, but my priority is the solar nav so i am in a IV.

    i may be faced with an available car in June from another dealer at msrp and a lack of definitive timeframes from my 500 below dealer. would i pay the "extra" 500, that most of us are paying if not happily at least not begrudgingly, to have the car in June instead of possibly August? my 02 gen 1 is running fine, so i don't have that impetus - just my excitement over the new toy.
     
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