I'm a '99 GS300 owner. My car has approx. 47K miles, and I'm considering upgrading to the 2002/2003 GS430 via a 1Pay Lease through Lexus Financial Services. I plan to pay all costs up front at lease signing, and will not have a note. My term will be 24 months. My residual will be less than 25K. In two years, I'm not sure what I'll do concerning the residual, but in general, what do you guys think? Has anyone ever gone through a 1Pay Lease with Lexus Financial Services? Any advice would be helpful. Thanks so much.

Gregj

 

All I can say is that its always a little catch somewhere!!!

 

What happens if you total the car? Normally any money you put down on a lease is lost if anything happens to the car.

 

I'm still educating myself, however, my understanding is that having good auto insurance limits coupled with GAP insurance in my lease contract will relieve me of financial responsibility as far as the car is concerned. You may very well be right... I'll just in a research mode right now, and I haven't made a firm decision to lease in lieu of purchase.

Please keep your feedback coming, so that I can hear several views from you guys. I appreciate it.

Gregj

 

Do you invest? Not to even touch the subject of leasing, but all your money will be tied up in the car the entire time. I kind of think of it like getting your tax return. If you get a big tax return from the government that means the gov had your money for a year interest free! If you can work it so you don't get much back, that means you had your money all that time and could invest it (or spend it on mods).

I really have no experience with this type of lease option so I'll get off my soap box. Either way, glad to see you're stickin' with Lexus.

Overclocker

 

Greg,
You are absolutely right as far as the gap insurance is concerned. As far as the lease itself is concerned, you need to find out alittle more than just the residual before making any good decisions. A good website that explains alot about the components of leasing is edmunds.com. Just to go over one or two points, the residual is one of the most important because you are taking the purchase amount and subtracting out the cars residual value which is what the car is worth at the end of the lease. That will give you a total that should be divided by the amount of months you will be financing minus any additional money you will be putting down, though not including the money going towards the closing, security and all other payments necessary for the lease itself. The other two components you need to know about the lease is the money factor which is a fancy way of saying the interest rate. If you have any money factor of .0025 which is common in this interest rate market, no matter how long the term of your lease, multiply that factor by 24 which will give you the interest rate on your lease. That can be massaged along with the residual value to bring your payments up and down. The last which is non-negotiable is the sales tax, which you take your monthly payment and multiply by the sales tax to get your final monthly payment. Decide if yopu are going to buy the car at the end before making any decisions to determine if they should adjust the residual. Hope I didn't bore you too much. PM me if you have any specific questions or if I confused the crap out of you.

 

i dont think he would lose anything... it's just takes time before company going return him money or issue him another car.. in any case he would not lose any money there.. that's i know for sure..

 

Thanks guys for your most recent replies to my inquiry about the 1Pay Lease. I am planning to refinance my house real soon. You see, I don't want to incur any credit inquiries, new payments on my credit reports, etc. This will hurt my debt to income ratios. I do, however, want a brand new Lexus GS430 right now. I've decided to go with the 1Pay Lease up front with a 24-month term, and stay within my mileage limitations (probably 20K/year or something similar). At the end of my lease term, I'll have the option to buy or simply return it and walk away owing absolutely nothing. Nine out of ten, I'll most likely pay off the residual which will be about $28K at that time. I can either finance the $28K at that time, or pay it all in cash and be done with it. I'll probably elect to go with the latter option-pay it off with cash! Here's where I can win up front with this lease deal... I won't have a payment/money factor. There is no interest because I'm paying everything up front. As a matter fact, when I went used the leasing calculator on Lexus' website, it doesn't even show me having a security deposit whatsoever. Yeah, one may say that it's a bad decision to allow Lexus to make money off of me because I could pay them month by month and keep the majority of my money in a money market or some other type of investment. I really don't have any other options though, because if I want the brand new GS430 right now, while attempting to refinance my house within the next few months, I need to do it this way. Give me your thoughts, especially in light of this new information that I've provided. You all are awesome, and I really appreciate you making me think about this matter moreso in-depth. I really believe that it's the only option that I have. Actually, there's one more option... wait on the car, which honestly, I don't want to do. I want it now. I've waited long enough.