TomMartin

Seems like two threads posted so I will post here also

Thanks for all the good information.

Now to see if I do understand???

1) Multiple security deposits(MSD)...seems like you can essentially eliminate the "money factor" by depositing multiple lease payments. Current lease chart I have has what they call "One Pay Lease RATE Subtract .001 from above rates"...is that the multiple security deposit factor?? Also, my intention would be to purchase the car at the end of the lease. Assuming you purchase I assume you just get a refund of your "multiple security deposits"?

2) In addition to the money factor I assume you take the capitalizes cost and subtract the residual cost...and then divide by the number of months of the lease? Thus "depreciation" is spread on an equal monthly basis and to that amount you add the "money factor"??

Sooooo...if I am confident I will purchase the car seems like I should deposit enough MSDs to essentially zero out the money factor...us the maximum number of months lease (appears 48 months on Lexus chart) and keep mileage per year low assuming I am willing and able to purchase at the higher residual...thus having low or lowest monthly lease payment with a higher residual buyout...since I am buying anyway??? I guess I could pay a little higher lease payment (higher miles per year assumption) and give my self the option of walking away if I wish...and also lowering the cash I need at the end of lease to buy out assuming I still want to.

Seems like you can essentially equate to a four year zero interest loan with a "balloon" at the end of lease...very similar to a four year loan with zero interest and a balloon at end???

Comments? Thanks Tom

OKSTANCE

All so confusing to us wipper snappers

enoren

If you ultimately plan on buying the car, leasing is an expensive way to get there. Best to put all of that security deposit money down and get a loan on the car.

And if you're going to buy out the lease, you don't need to worry about mileage or wear and tear. They only care about that if you're turning the car back into them. You can use all the miles you want and they won't charge you a dime if you ultimately buy the car.

RA040224

Just a followup, I got an answer from Toyota Financial Services Norway, an they explain why we don't really risk anything by paying some of the lease upfront. Say you pay NOK 36.000 up front on a 36 month lease and then total your car after 18 months. The leasing company will get the value of the car back from the insurance company, and you will get 36.000 (initial payment) / 36 (length of lease) * 18 (remaining lease) = 18.000 back that you can use for your next car.

keyframe13

Norway is a great country with amazing financing and insurance system. Cant compare that with US. Here they don;t know how to screw you over more.

crazych42

I have a lease question about taxes. My dealer is adding taxes (4%) to the capitalized cost of the vehicle. So basically adding $2K to the price of the car.

Sites like edmunds and Ride with G multiply the monthly lease payment (say $600) by the 4% to come up with the rate. The former method adds $30 plus dollars to the monthly payment on a $50K vehicle! Is the dealer trying to pull a fast one?

crazych42

OK I think I answered my own question. In my state the sales tax is based on the selling price. Thus, the tax is added to the capitalized cost unless I choose to pay it up front.