I'm thinking of leasing a 2010 prius based on the killer deals Toyota is offering. If - If - I for some reason I need to sell the Prius, how hard would it be to exchange the lease? I think right now, used vehicle prices are taking a small hit just like new ones due to the marketing issues....but I expect that to clear itself very soon. So, assuming I negotiate a great deal today, but run into issues later (eg, lose job or whatever) and want to unload the Prius, do you think it will be easy or hard? My biggest issue is locking myself into a 3year commitment and then something changes. I want to know what flexibility I might have.... My gut says it will be easy because as the economy improves gas prices will rise and even if the economy doesn't improve that's going to put that much more pressure on saving money. What do you think?
I have never leased so I have no clue about getting out of one. I would imagine that this is a pretty good time to buy (perhaps lease) a Toyota in general, though 6-8 weeks ago would have been the best, but there are probably still some deals or incentives to be had. Also, just keep in mind that unloading any relatively new car will come with a financial hit so this would be relative to other car companies. I think that public perception of Toyota has already improved and as long as another shoe does not drop it will continue to improve. My guess is that long term this will be just a blip. So, the biggest bet on the resale value of a Prius would be future gas prices. If they spike like they did a couple of years ago people will be climbing over each other to buy a Prius - heck back then there were stories of old Geo Metros going for crazy prices.
Being able to return (or get out of the lease) is the easy part. The more difficult part will be to pay down the extra costs for doing so. It could get very expensive to get out of a lease (regardless of the percieved demand on your vehicle). Instead, I would suggest that if you are thinking that you may not need to car the whole time, then you should just buy it (Finance it), and sell it to any buyer when you no longer need it. This will give you a chance of selling to many buyers, and will likely be cheaper (new loss wise) on you then leasing now, then trying to negotiate with a dealership who knows that they have you bent over where they want you... Just my two cents.
I have no experience in leases either but my two sense is it depends on when you try to unload it. In the summer for instance, when gas goes up, will be prime time to do so. I think its all a matter of timing.
One thing you have working against you is the high residual on the leases they're doing now. There are generally two ways to get out of the lease. One is to make all the remaining payments after turning in the car early (doesn't make much sense unless you're really close to the end of the lease). The other way is to get a payoff amount from the lessor. Essentially, you're buying the car out of the lease. Then, you sell it (either to the dealer or to a third party). As a rule, the difference between the payoff amount and the market value (your deficiency) is higher earlier in the lease than later. The leasing company is betting that the car will be worth the residual value at the end of lease. Because the residuals are so high on these cars right now, it is less likely you will be able to get out unscathed if you try to exit the lease early. Perhaps you should look into one of the mfrs offering relief to those who purchase their cars and lose their jobs (Hyundai, I think, has such a program).
One of the downsides of leasing is being locked into a fixed lease term. One answer is the many lease matching sites, where you list your car, and somebody else looking to lease a car agrees to take over your lease--although you may have to offer a financial incentive to do this. Of course, if you buy a car and finance it, then after a short while decide to sell it, you'll likely be upside down, and take a hit in the process.
Huh? How many people pay cash for a car? Not many. Prior to my Prius (which I decided to lease to transfer the residual risk in this rapidly changing auto market to somebody else), for the last 20 years I've paid cash for my cars--but the majority of people finance their cars (through loans or leasing).
As noted above it's never a good thing to have to sell a vehicle 'early' such as within the first two years. You're going to take a loss no matter what you choose to do barring some unusual situation such as $5 per gallon gas all over the country or a war that stops the flow of oil. I've done both, purchased and leased. On the leases I've run them to the end and turned them in purchased them from the lender before the lease is final Both are good options depending on your personal circumstances. If you think that there's a realistic risk of losing your job within 3 yrs then think about buying a USED Prius. It's a better value right now. You get it for a much lower acquisition price and you still save gobs of money in fuel not used.
Lucky you.....Will you give me a loan? For the rest of us.... I have leased for 20 years. No problems ever...just turn the car in at the end and walk away. You must be the right candidate though... Always want to drive the latest... Always keep the car clean and in good shape... Have only a modest taste for mods... Know and can control your milage... A zero money down sign and drive gives you the greatest control over the lease transaction...never make a down payment on a lease...that is money out-of-your pocket early...keep that money and invest it. You see if you purchase a car...Pay it off...and purchase a new one again right away you are taking the greatest hit of all. If you keep the car a few years after you pay it off then great...buy. I have never met a senior accountant/banker/or investor who owned a car. They mostly lease and so do I.
Thanks for all the great replies! In this crazy economy, I'm trying to stay as flexible as I can. I don't want to tie up cash or loans on a car. My current car is a gas guzzler and as a '98 BMW 540, I worry about the cost of speeding tickets, the cost of gas and the cost of repairs. Whether I like it or not, I'm committed on the 540. Right now, I'm being quoted Prius III base Invoice $23500 RV 16,184 15k/yr MF: .00048 d/o is about 250 for 1st pmt and 400 for reg It comes to about $250/mo plus or minus. (dealer was quoting $260 but my spreadsheet says $242 - both taking into account tax) That's pretty attractive as a monthly rate. Will I pay more than $3k/year if I keep my BMW? I think that common wisdom says, "your current car is always your cheapest car. A repair is cheaper than a payment. Plus with a car you own, you can always choose to defer some maintenance or schedule it when it suites you" The car is probably worth $5-6k, so if I could sell it for that, that almost is enough for 3 years worth of lease payments. I'd probably just bank the $$ and add it to my emergency fund. Right now, I get mileage reimbursement so that's certainly a factor. If I drive 100 reimbursable miles for work each week, or 400 miles per month at 36c/mile thats: $150. Not to mention saving at least $50-100/mo on gas. So, its very attractive. Most new cars have a non-linear, steep depreciation curve from Year 0 to year 2, then it more or less averages out. So, technically, a 3year lease gives me a lower lease payment in year 1 and 2 than actual depreciation... and a higher lease payment in year 3 than actual depreciation. (The depreciation curve is convex and the lease is straight line). So - technically - if I could get rid of my 3yr lease during year 2, I'd even be ahead! Not that I'm trying to game the system, but a year from now if gas prices go up, who wouldn't want to take over a $250/mo lease? It should be pretty easy to get out of, if I needed to, right? I asked the dealer today about "swap-a-lease" and he gave me a funny answer. He said, "oh no, Toyota Financial will want to have a customer have their own lease. They won't allow you to swap a lease." This guy has been transparent as glass and super easy, no pressure to work with. But I know how to tell when it's getting spread on thick. This seemed like BS to me. What say you all? Can I transfer a lease if I needed to? ie, post in craigslist, "take over my lease!" (credit approval and app fees are always a given in these situations) Again, I'm not trying to game a system, I'm just worried in this economy of bumps in the road. Presumably everything will be fine. Any experience with taking over leases? thanks!
