radiologym

Hello!

We have approximately 8 months left on a 3 year Rx350 lease. There is a 12000 miles per year allowance and we already got 35500 miles, with likely a significant overage if we keep the lease. Rx350 is fully loaded with MSRP of $54k. Lexus lease was through Toyota Financial if it matters. Toyota dealer said that there will not be a penalty for returning Lexus early, is it just another way to say that they will make money of the lease price? We decided to trade in this lease for a Toyota Highlander XLE with 6cyl as kids need more space in the back. I want to get a fair price and not sure how to calculate it. Do I need to negotiate trade in separately from new lease? How likely will I benefit from selling Lexus privately? Thanks!

JDR76

I recently did the same thing, and turned in our leased RX for a Highlander. I was able to do the RX as a trade rather than lease return. I wasn't over miles in the RX but was about 4 months early.

Best of luck. It'll be tougher with your higher miles, but our Highlander has been a phenomenal vehicle for our family.

radiologym

What is the difference between trade in and lease return? I believe with trade in you can make money if your car worth more?

Fizzboy7

They will likely be making money off the trade in other areas. What is really important here is the market value of your RX today. It could be worth a lot more, but you are not seeing any of that go into your pocket. The dealer is likely going to gain on you return. Having said that, I highly recommend privately selling the RX. Then you can pay off the remaining payments. You will likely come out ahead by doing this, rather than handing the keys over to Toyota. Dealers almost always have ways of burying money on trades and keeping it from coming to you.

radiologym

It's all new to me. How do I calculate residual value?

coolsaber

I dont know about early termination fees since its basically in house, but I would look into that.

1) Figure out your residual value on the original lease agreement
2) Figure out your cars worth (usually lowest value etc on an online car site or get a hard appraisal from a dealership).
3) Usually with a RX350 they tend to keep their values up, so you have some room to play with, just dont expect some delusional appreciation numbers .
4) Figure out your overage mileage costs in comparison to getting into a new lease with some sort of ETF

radiologym

If I am selling RX350 privately, I will be responsible for sales tax because I will have to buy it from Toyota first, right?

ssmoked

Take it to carmax and see how much they will buy your car currently. Add 3-4000 selling private if you choose to.

Sulu

A trade in would work like this... The dealer buys your RX from you and the profit you would have left after paying out the remaining 8 months of your lease would be applied as a trade-in to reduce the price of the Highlander. Yes, the dealer would profit because they would be buying the RX at a price that is lower than they can then re-sell it for (on their used car lot, for example).

The (early) lease return would work like this... If you decide to return your RX early, before the end of the lease, you (theoretically) have to pay out the lease by making a payment equal to the 8 months that remain in the lease. But if Toyota / Lexus Financial (and your dealer) allow it, you may be able to apply those 8 months of lease payments on the new Highlander. That would depend on many factors, though, making it difficult for you to calculate. The bottom line, though is that the dealer makes money on the deal, by being able to sell the used RX at a profit.

Doing it all through the dealer saves you the hassle of trying to sell it privately, and then having to pay to end the lease early, paying for any private sale fees (getting emissions checked, getting safety checked, etc.) and paying any taxes.

Talk to your dealer and ask what options you have, stressing that you have your mind set on acquiring a Toyota Highlander as a replacement (i.e. you are not leaving the Toyota / Lexus family). Hopefully you get to talk to a helpful and honest representative.

radiologym

Is reaching allocated miles carries a special penalty to make it worth it for me to try to sell it before it? Or will they just start charging me 25 cents per mile overage?