So, my 2024 Toyota Highlander Ltd Hybrid is being built today in Princeton, IN. I should have it in 10 days or so.
So, talking to my salesguy about lease v purchase strategy. Leasing has worked well for me in the past. Inexpensive financing cost and still have equity in my car after 3 years and I could get a new one. I also expected financing cost to be way up 'cause, ya know, interest rates. But this one surprised me.
The implied interest rate in a Toyota lease is 9%. Kinda steep. The monthly lease payments over 3 years plus $5,000 down would be $31,100, including a lot of financing cost.
The difference between the total cost and the residual is about $21,000. So, I thought a single-pay lease would be in that general neighborhood.
The single pay lease amount is $27,250. So, I would be paying $27,250 for about $21,000 "worth of car" and paying it all in advance. Nope.
They get the money up front, no risk, in a high interest rate environment. Isn't that absurdly high?
I'm an accountant, so I thought I understood this stuff. What am I missing?
So, talking to my salesguy about lease v purchase strategy. Leasing has worked well for me in the past. Inexpensive financing cost and still have equity in my car after 3 years and I could get a new one. I also expected financing cost to be way up 'cause, ya know, interest rates. But this one surprised me.
The implied interest rate in a Toyota lease is 9%. Kinda steep. The monthly lease payments over 3 years plus $5,000 down would be $31,100, including a lot of financing cost.
The difference between the total cost and the residual is about $21,000. So, I thought a single-pay lease would be in that general neighborhood.
The single pay lease amount is $27,250. So, I would be paying $27,250 for about $21,000 "worth of car" and paying it all in advance. Nope.
They get the money up front, no risk, in a high interest rate environment. Isn't that absurdly high?
I'm an accountant, so I thought I understood this stuff. What am I missing?