New Prius Lease Special - Good Deal?

Purchased Prius II on 25 February. MSRP total $23,419 base $22,400 then added mats ($200) and applique ($69) then $750 processing. Negotiated dealer back down to $22,400 then subtract $1,000 in rebates ($500 regular rebate then another $500 loyalty). Paid $21,400 plus taxes/title/etc. We neither lease nor finance.

Your MSRP seems high and I think you could get a better price. I don't know how accurate, but I looked at truecar.com and seems like it was of some value.

 

Another thought. From other posts, my pricing seems really good, but I think some of that is supply and demand issues. Priuses (Prii?) don't sell around here (you are required to own a rusty Ford pickup with a dangling Indianapolis Colts license plate), so you may not find that deal on the coasts where the demand is much stronger. I ran into a customer in Louisville who was picking up a new Prius IV. He was from Modesto, CA. He said that the price was so much better here that it paid him to fly into Louisville, have the dealer pick him up at the airport, close the deal and drive the new car back home. Maybe something to use as a bargaining chip, as you can look at internet pricing from lots of dealers nationwide, then call. That's what I did.

 

Is this a good deal from what people are seeing?

Loaded Prius IV with solar roof and Nav. (Cap cost $30,620)

12k miles, 36 mo = $354 a month payment
with $716 down (including first month!)

Residual: $20127

Thoughts?

 

Looks pretty similar to the deal I'm hoping to make. I've been doing some research and will probably end up going for the base model II. The base deal was 1999 due at lease signing (1167 cap reduction, 650 fee, 179 first month's payment), 21,657 adjusted cap and a residual of 16,128. That's the advertised deal, but I would prefer it if they capitalized the reduction and fee so I only pay the first month, doc fees, etc. at signing. I did some math and it looks like the implicit interest rate in the lease is under 2%, so if they could capitalize this at the same rate my monthly payment should be around $240.

I ran your numbers through the spreadsheet I made, and I came up with an interest rate of 3% for you, which isn't too bad but I hoping I'll be able to get 2% for myself.

 

Thanks! Great feedback. So what should I be asking for to get the interest rate down to 2%? Reduction in cap?

 

As I recall, leasing of individual cars (as opposed to fleets) was invented as a strategy to take advantage of certain tax laws applying to people who use their cars for business.
For many years, the conventional wisdom was that leasing was not a really good deal for individuals who couldn't take advantage of those tax breaks.
I don't know what the conventional wisdom is today, and whether the tax laws have changed.
However, I would suggest carefully looking at your particular financial situation regarding your car, and compare overall cost of ownership of leasing with cost of ownership of buying over the period that you expect to have your car.

 

Good suggestion, kgall.
There are calculators available on the web that can be used to compare options. You just insert the MSRP, Negotiated price, etc and click. One of those is :
Auto leasing lease payment calculator
I suggest those considering leasing/buying determine your "fair price" for the car after weighing $ off MSRP, doc fees, etc (KBB, Edmunds and Consumer Reports provide insight.) Then make your sincere offer to the dealer. If you're allowing "some" profit over invoice and after fees etc, the dealer can accept your offer and if she/he rejects you can move on to another dealer who has more room to bargin. It is still a buyer's market. A Prius purchase is still a major auto investment.
If you need a car or want a car just "do your homework" and know you can not "beat the dealer". He/She does this stuff for a living and they have seen it all before. You can only be knowledgable enough to know what you'll pay or be willing to walk away from :nono:
I just checked KBB and Edmunds and they do not have newest lease info yet. Lots of other info is there though.

 

I agree.

The house always wins. When you buy an extended warranty the warranty is not a loss for Toyota. It is a loss for you. They bank on your fear that something might go wrong and they always win.

When you lease compared to buying, the company leasing the car always makes out. People forget that extended warranties and leases are products that bring more profit to the company offering them. It's a business, there number one goal is making money not offering a service they might lose money on.

 

I just made a deal for my lease tonight, and we will finalize the paperwork tomorrow. Overall I'm pretty happy with how it went. A got a model III with a list of $24100 + 750 delivery for $22656. I opted for 15,000 miles a year, for a residual of $16100. They capitalized everything but the first month's payment, including $650 lease acquisition fee, $450 in sales tax, $350 doc fees, even the $33 title, and unfortunately some extra $299 protection that I probably don't need and can get taken off. All I'll have to pay is the monthly payment at signing, which is $266 right now, and will be $257 if I get the $299 removed.

Originally I figured I would be paying $240 (252 with tax) or so for a Prius II with 12k miles/yr, and I ended up paying $257 for a Prius III with 15k miles/yr. Seems like a pretty good deal to me, although the interest rate they are charging (2.05%) is a little higher than what was advertised in the promotion (1.6%), but with the other concessions they made it more than balances out.

 

As I commented to your other post, that $299 is BS, as is the maintenance.

And it appears the dealer marked up the money factor. The promo money factor I saw was 0.0016 (or was it 0.0013--I can't remember), which equates to 3.84%--not 1.6%. If the money factor they proposed was 0.00205, the interest rate is 4.92% (not 2.05%). If you accept the marked up money factor (which I wouldn't) you're paying ~$650 more than you should over the lease term vs. 0.0016 MF.

Seems like this dealer is pulling all the tricks--plus what's with the $350 doc fees?

 

I converted MF to interest rate since I'm much more familiar with interest. It was a money factor of like .00067 before, and .00085 now. As for the doc fees, I don't know if that's BS or whatever but every dealer around here charges them.

 

Congratulations on your choice of a new Prius. While some issues like protection plans and doc fees can be debated, the bottom line is "are you satisfied ?" and if so...start enjoying your selection. Looking back will only make you bitter about "what could have been" while you never really know for sure.
:cheer2:

 

I just got a great deal on a lease, they had special o down and 209 a month for 12k a year, i got 15 k a year for 223+tax my total is 237 a month with 0 down, i couldnt believe the deal i was getting

 

I just leased a 2010 ver III w jbl sound sytem no mmon roof or nav system for $150/mth for 36 mth ! with a trade in for my 2020 town & country van of which I got $3000.00 leaving me a down payment of $1,000.00 incl first month payment !

 

i saw the ad. although no down payment, did u pay any drive off fees, which typically are $500-$800? also, does the $209 include tax?

thanks.:rockon:

 

i highly doubt you'll get that deal in so cal.

 

Leasing is ALWAYS better than buying--always:

1) As an individual you really can't use the depreciation the same way the leasing company can to shelter income. Inotherwords
the depreciation is WORTH far more to them and they are willing
to 'pay' you for it through a reduced cost of capital. The depreciation is still worth more to the leasing company, even if you're planning to lease the car through your business.

2) Keeping your $22K+ and investing it in APPERCIATING assets
is far better than SINKING into a depreciating asset.

3) Let the leasing company take the RISK of what the cars residual
might be worth when the lease expires. Why would you want to
assume the value of a depreciating asset by owning it- it that may be state of the art today but in 3 years time it could be a dinosaur.
Always let someone else hold the risk.

4) RULE: OWN or control appreciating assets--rent or lease depreciating ones.

5) It doesn't matter how long you plan to have the car--leasing STILL wins.

Yes, it may make sense to shop around for the best lease terms
and conditions, but NEVER, EVER "BUY" a car.

Enjoy

 

That is a very close minded view point. There are 2 times when a lease is better. If the interest rate of the lease plus any fees is less than a purchase interest rate, a lease is better. If you typically trade your car every 3 years, and the guaranteed residual value is higher than what your trade-in or resale value would be then a lease is better.

For example, the current Prius lease is 1.8%, which is pretty tough to beat. They are guaranteeing it will hold 72% of it's value in 3 years. It is unlikely that trade-in value will be 72% in 3 years. This is a promotional special to get their cars on the street during distressed times. I feel that this is a rare instance when the lease makes more sense.

 

You are wrong. When you buy a car you can deduct depreciation equal to the percentage of business use, plus operating expenses such as gas, repairs, insurance and so on. If the car is leased, only the full lease payment adjusted for actual business use can be deducted plus operating expenses.

You will always get a better tax break purchasing the car. It is a lot less work to file your taxes with a lease but most people would rather save more money.

Your math is flawed. If you are making monthly payments how are you keeping $22K? Your payments go toward a major part of the cars depreciation. The first 3 years. Then you give the car back and do it again. This is foolish at many levels.

There are lots of risks in leasing over buying. What if you get a new job and now have to put 30,000 miles instead of 12,000 a year. The payment will double the price of the lease. What if you lose your job? You are stuck in a lease. You cannot sell the car outright.

As I posted on your point 2 your math is flawed.

One thing you have correct is a car is a bad investment because it starts deprecating the first day you buy it. Most of the deprecation is over the first 3 years. When you lease you are wasting that money every three years.

 

Hello,
How does this offer sound:

M.S.R.P. is $23,750 will sell for $22,750,
$4,000 for trade allowance
money factor is .00085 for tier 2, tier 1 .00075.
Residual value = $16,416.

Thanks