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Insane lease deal for 2018 Advanced Prime

Discussion in 'Prime Main Forum (2017-2022)' started by chong1110, Jul 5, 2018.

  1. Salamander_King

    Salamander_King Senior Member

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    I said not to lease Prime because of tax credit, but I am not totally against leasing a car. If you like to change your car every three years and don't drive more than lease limit (usually 12K/year) and don't care about customizing your car, leasing makes sense vs purchasing a new car every 3 years. Especially if you can find a good no money down low monthly payment lease offer. I am looking into leasing RAV4 hybrid right now. I think I can get ~$31K RAV4 hybrid for about $285/mo for 3 years/36Kmiles.
     
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  2. Dudley1030

    Dudley1030 Active Member

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    LOL. Not sure on that one!
     
  3. chong1110

    chong1110 New Member

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    I was loving the Prime because of the carpool lane sticker. Talked with several dealers and found out that Toyota is keeping the federal tax credit instead of rebating it back to us for leasing deal now. Maybe they wanna control the number of cars dumping into the used market? I don't wanna buy because things change fast for the EV. It's either holding value well or worth nothing down the road. I don't put loads of miles to my car so fuel efficiency isn't gonna be an important factor to me. I rather wait and see for the EV hype. But I totally see why buying it is a better deal specially buying it used after 3 years when all those lease car came to the used car market.
     
  4. Salamander_King

    Salamander_King Senior Member

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    It's not specific to Toyota. Any EV, including Volt, Fed Tax credit for a leased vehicle goes back to leasing company. If the lease is from Toyota Financial Service, it will go back to TFS, but not Toyota manufacture, as I understand it.
     
    #24 Salamander_King, Jul 7, 2018
    Last edited: Jul 7, 2018
  5. PT Guy

    PT Guy Senior Member

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    Yes, and...the lessor always has the choice whether or not to reduce the capitalized cost by the amount of the tax credit. If the lessor pockets the credit, they make more. If they reduce the cap cost, the lessee pays less.
     
  6. Digloo2

    Digloo2 Active Member

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    Ok, one person actually nailed it on the head. I had about $10k of negative equity carried forward from my previous vehicle that was dumped into my current car loan. <sigh>

    My previous payment was $641 for a 2012 Prius V with 120k miles on it. I was a little past having it 1/2 paid-off. I "upgraded" to a brand new Prime for an additional $130/mo. I had just paid off another loan that was costing me $190/mo, so my monthly out-of-pocket costs actually went down. I know it sounds weird, but that's how I see it.

    My only suggestion is ... don't EVER get saddled with negative equity in a car. The dealers make it sound simple, but you end up paying interest on that chunk of money for year and years. Never mind the fact that you can never actually sell your car to anybody but the dealer because you're so upside-down on it. So ... I decided to upgrade instead.

    I figured ... if I'm going to drive a boat anchor around, it might as well be a REALLY NICE boat anchor!
     
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  7. PT Guy

    PT Guy Senior Member

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    That negative equity is a gap. The gap between what you owe and what your insurance will pay you if you total the car. Crash & total your car, and you have to write a check to walk away. Yuck. Negative equity isn't only from an underwater trade in. It also is present with a long term loan and a low down payment. You owe more than the market value of the car for the first couple of years.

    Gap insurance is available from your own insurance carrier at probably a reasonable price. Or you can buy gap insurance from the car dealer at a price that puts money into the dealership owner's pocket, the so-called finance manager's pocket, and probably somebody else's. After you've paid off part of the loan the gap will have gone away, and you can cancel your gap insurance. Check those numbers.
     
  8. Salamander_King

    Salamander_King Senior Member

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    OK, I still don't get it.
    IF both statements are correct, then your total payments for PRIME is still 57K-10K. $47K total payment for a $28K car??? What is your interest rate???
     
  9. Mavi

    Mavi Active Member

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    How do you gets get yourselves trapped in such leases? Do you guys make 150k+ a year or something? This is probably why I'm still driving my 2007 prius.
     
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  10. 2k1Toaster

    2k1Toaster Brand New Prius Batteries

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    Nothing wrong with that. Basically you have a "car expense" part of your budget and you've reduced your monthly expense. Doesn't matter that the payment now goes to one note versus two, the total amount is lower.

    Yep, but don't fall into this trap 3-4 years from now and upgrade again. Eventually you'll be paying for a Lambo but driving a Yugo.
     
  11. fotomoto

    fotomoto Senior Member

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    Yes this is the general practice and is usually what helps manufacturers offer better lease deals on plug-ins.

    But what if.......

    Toyota is sandbagging on the tax credit claims to use them later on say a more expensive BEV? I mean a credit is a credit whether it be for a 5kwh battery or a 50kwh battery. Right? Or does the gov't just count sales and not credits claimed via the IRS? IDK
     
  12. Digloo2

    Digloo2 Active Member

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    Yes, I do have Gap insurance. I think I'd have to be a total idiot to not have it in this case.

    Then again, I could be accused of being a total idiot to have taking the deal in the first place.

    But as I said before, my rationale was to upgrade to a brand spanking new car for an additional $130/mo, and that was less than the payment on another thing I just paid off, so my net monthly expenses still went down.

    As long as I can afford to make the payments, I'm OK. If not, there's always BK if the bank won't work out a deal.

    To address a couple of other posts:

    * This is NOT a LEASE
    * The interest rate seems to be higher than what I thought I was getting.
    * It's easy to just say I'm getting screwed on this deal. That's what our capitalist system does to people who don't have much accumulated wealth.

    Nonetheless, I'm happy with my purchase so far.
     
    #32 Digloo2, Jul 11, 2018
    Last edited: Jul 11, 2018
  13. cdnbrit

    cdnbrit Junior Member

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    I leased a 2018 Prius Prime Upgrade in Canada. (Mid trim)

    after the rebate ($5000) it came to $32500 CAD. I leased it for 39 months at 4% (Toyota finance rate) with $3000 down for $222 bi weekly. 55,000 Miles for the lease (88kms) Granted i have a little bit more down than you and i got suckered into some bullshit lease coverage. After my lease is up i was told the buyout will be $17500. I'm expecting that the car will be worth more than the buyout when i'm done with the lease as I've calculated i can put 2000kms per month on the car and i only drive around 1200. I know i'm in Canada but yet it somewhat seems the same. (sorta)

    And yep i know.. Leases are fleeces blah blah blah .. I also know i don't get to keep the car. I know it all. But I like to drive a new car.. If i buy one i'll probably just end up getting sick of it half way through or see the newer model and get to carry some debt load over and dump it into another deal on another model... For now a lease is good for me.
     
    #33 cdnbrit, Jul 11, 2018
    Last edited: Jul 11, 2018
  14. jerrymildred

    jerrymildred Senior Member

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    Think what would have happened if you'd taken that $190/month from what you had paid off and added it to the $641 you were paying on the v. All of that $190 would have gone toward principle. Then, keep driving the v after it's paid off and put $821/month away toward your next car.
     
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  15. Salamander_King

    Salamander_King Senior Member

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    Penny saved is penny earned. Actually, with no tax and no interest to pay on the saving, penny saved is more like 2-3 penny earned.
     
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  16. jerrymildred

    jerrymildred Senior Member

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    Actually, this is how we got out from under about $25,000 in consumer debt in about three years. It would have been sooner, but our house got invaded by termites while we were working down the debt.

    The plan is, take the payment that has the smallest balance and make some small sacrifices so you can pay it off asap. Then take what you were paying on that and add it to your payment on the remaining bill that's the quickest to pay off. Make minimum payments on the others. Then take all that and go after the next one, and so on. Once you get rid of a few bills, you find yourself making huge payments on the remaining ones as you kill them one at a time. It snowballs in your favor instead of against you. We still use a credit card, but have always paid it in full every month since about 1997.
     
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  17. schja01

    schja01 One of very few in Chicagoland

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    scan0011.jpg
    I though these residuals were low but they don't explain your lease numbers.
    2018 Advanced + All weather liners.
    Attachment.
    J
     
  18. Since2002

    Since2002 Senior Lurker

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    Yes it can but it is also risky and should be done only with reserve money, i.e. money that you can live without. Basically you should already be relatively financially secure before using debt to leverage investments. Someone who can't easily pay cash for a new car is not yet at that financial level IMHO. I'm not talking about your personal situation with your Leaf I am just making a general statement.

    Can you tell us more about the 1.99% interest rate, was it from Nissan, if so was there an alternative cash rebate available? If so then in your comparison you would need to subtract the cash rebate from the $32,000 and then compare that to the $32,592. Actually I think you may have forgotten to add the $1,000 downpayment to that amount, $540 x 60 + $1,000 = $33,400.
     
  19. ETC(SS)

    ETC(SS) The OTHER One Percenter.....

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    +1!

    Mt next car might just be a Pip on the 100-percent-down, zero percent interest plan.

    Like I said before
    Leases are fleeces, but they're even fleecier on cars with large government kickbacks and very low residuals.......and anybody who is a PHEV or BEV early adopter KNOWS about depreciation...........which is why you can get an off-lease Pip, Volt, Leaf, etc... on the cheap right now.

    Let somebody else pay for the depreciation! ;)
     
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  20. 2k1Toaster

    2k1Toaster Brand New Prius Batteries

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    For debt to be a tool, your rate on the debt needs to be lower than the rate you'd make on the money as an investment which is pretty easy to do.

    And yes the $1k needs to be added. PC doesn't allow edits after a while which is annoying. But that process is still awesome. We're talking about 6%-9% difference. Money in funds are 8%-11%. Some of that cash has done much better than that. So even with a 5.5% loan, I'd take that any day.

    And the loan was through a local federal credit union. There were no purchase incentives from Nissan on my Leaf. Just wanted a BEV and it was the only reasonable option.