Should You Lease a Toyota?

That’s a very good question, but one that doesn’t necessarily have an easy answer. Whether or not you should lease a vehicle – Toyota or otherwise – really comes down to what type of financing works best for you and what you want to get out of the vehicle you drive. Looking at Toyota lease deals is a good idea when you are hunting for a new car, but it’s really best to consider all of your options before making a decision. In much the same way that no single vehicle is right for absolutely everyone, no single way to pay for a vehicle will be the right choice for everyone.

Today, we’ll go over some of the pros and cons involved with choosing a Toyota lease deal rather than simply getting a loan and buying a car. We can’t tell you in a post like this if a lease is definitely right for you or not, but we can give you enough information to help you make an informed decision. We’ll also go over a lot of the aspects of what a lease is so that you can understand everything involved with these great deals. Plus, the team here at Romeoville Toyota is always happy to provide you with answers to any of your questions, so feel free to reach out to us if you want to know more.

What Is a Lease?

Before we go any further, let’s take some time to really get into the details of what a lease is, how it works, and what you need to know when considering any Toyota lease deals you find. A lease is a type of vehicle financing in which you pay to use a car each month for a specific duration, and then you return the vehicle at the end of the lease term. You don’t actually buy the car, nor do you end up owning it and keeping it after the lease ends – you can think of it sort of like a long-term rental on a vehicle.

Since you’re not buying a car with a lease, there’s no bank or other third-party lender involved; you simply pay the dealership each month to use the vehicle. There are advantages and disadvantages to going with a lease rather than buying a vehicle, and it really depends on what works best for your situation. One thing you should keep in mind when considering a Toyota lease deal is that it can cover either a new model or a Certified Pre-Owned vehicle, which creates an amazing opportunity to save a lot of money and get the most out of your car.

Common Lease Terminology

If you’re looking at different Toyota lease deals and considering whether one might be right for you, then there is some specific terminology you should know. While some aspects of a lease are similar to getting a loan to buy a vehicle, there are also some very important differences to consider. And recognizing and understanding the terminology on a lease will go a long way to making sure you get the right deal for what you need.

• Capitalized Cost – Also called a “cap cost,” this is the total amount that you will be paying over the duration of the lease. It will include the monthly payments along with any fees or charges.
• Capitalized Cost Reduction – Also called the “cap reduction,” this is anything you can do to reduce the cap cost before the lease begins. Making a down payment, having a trade-in, and finding special deals and rebates can all help with cap reduction.
• Adjusted Capitalized Cost – Also called a “net capitalized cost,” this is the amount after the cap reduction is taken from the initial cap cost. It determines your actual monthly payments.
• Depreciation – This is the amount the value of a vehicle lowers over time, through aging, daily use, etc. When you lease a vehicle, you’re largely paying for its depreciation while you use it.
• Residual – This is what a vehicle is worth after you lease it, based on depreciation. The lower the net capitalized cost and the higher the residual, the less you pay on a lease.
• Money Factor – This can be confusing, but it’s really pretty simple. Although it’s not presented as a percentage, the money factor is basically an interest rate on what you pay on a lease. The higher the money factor, the more you’ll pay.
• Lease Term – The “term” is the length of a lease, usually between 24 and 60 months.
• Gap Insurance – This covers the difference between what you have paid and what the vehicle is worth if it’s stolen or totaled in a collision. It’s very important and always worth having.
• Security Deposit – This will cover any possible damage you cause to the vehicle you lease. If you return the vehicle in good condition, it will be refunded.
• Acquisition Fee – This is a charge for setting up the lease and is typically included at the start when you first determine the net capitalized cost.
• Disposition Charge – This is a fee charged to you when you turn in a leased vehicle that covers the cost of cleaning the car and getting it ready to sell.

We know that can seem like a lot, but most of these terms are simpler than they might seem. And now that you know what they mean, it’s a lot easier to figure out all the details of any Toyota lease deal you’re interested in. But is a lease right for you? Well, consider the following:

Toyota Lease Deals – Pros

There are some clear advantages to choosing a Toyota lease deal. Such as:

• You get to enjoy a new vehicle without paying its total price.
• Monthly payments are lower than paying off a loan to buy a car.
• The first few years are when a vehicle is typically the easiest to maintain.
• Your vehicle will be under warranty for most or all of your time with it.
• You don’t have to worry about trade-in value or what the car will be worth in the future.
• Business owners can often claim a leased vehicle as a business expense.

Toyota Lease Deals – Cons

There are also some drawbacks to choosing a lease. These include:

• You don’t own anything at the end of your lease.
• Going from one lease to another means you always have monthly payments rather than paying off a loan.
• There are mileage limits on leased vehicles – generally either 12,000 or 15,000 miles per year with a Toyota lease.
• You may need to pay additional charges if the vehicle is damaged when you return it.
• You can’t customize a vehicle you’re leasing since it needs to be returned as you got it.

Is a Lease Right for You?

As you can see, there’s really no clear-cut answer here. A lease lets you enjoy a brand-new car and keep your monthly payments low without the hassle of worrying about trade-in value years from now. But going from one new car to another every few years without ever owning anything isn’t for everyone. So you really need to decide on what you want and need. Are you still not sure about the best way to finance your next vehicle? Call or come visit us at Romeoville Toyota and we’ll be happy to discuss all of your options, answer your questions, and make sure you find the right solution for what you need.