Automotive

Lease vs Finance on a Toyota Camry 2018 LE Hybrid

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  • Oct 16th, 2017 5:38 pm
[OP]
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Feb 28, 2006
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Richmond Hill

Lease vs Finance on a Toyota Camry 2018 LE Hybrid

Hi all,

just wondering, so what have people who have recently got this car get in terms of % above invoice?

I'm looking into lease/financing a 2018 Camry LE Hybrid and was just wondering what a good % above invoice would be. The sales rep said that if I put down $5500 as security payment, he could do a 64 months lease with 2.49% instead of 3.99% and he also added like close to 20k mileage surplus on top of the 20k mileage allowance to bump up the monthly payment so I could pay less interest? I believe the monthly $ amount would be just above $500. At the end of the lease term, he said the residual amount would be somewhere around 4800-4900 +$300 lease end fee + tax, it would be just a little above $5500. So I would pay the little amount above $5500 to keep the car; I believe it was ~$48. Is this a decent deal or common practice? Note these calculations are based on MSRP with no discount yet. He said it would be saving on interest down the run and be less expensive vs if I was to finance off the bat at 3.99%.

Thoughts?

Thanks in advance.
5 replies
Deal Expert
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Jul 30, 2007
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Toronto
based on toyota.ca lease calculator:

MSRP: $31,290
$0 down
$1,843 in fees rolled into lease payment
64 months
22,500km per yr. Meaning, you are allowed 120,000km for the entire term
Residual 38% = $11,890
Interest rate 2.49 as per your post with the condition of $5500 security deposit given, it would be equivalent to a $1630 + taxes in discount (over 64 months term basis). Otherwise, per toyota.ca it's 3.99%
Assumed $0 dealer side discount

Projected monthly $378 + taxes = $427 OTR.
Due on delivery - 1st month + license

Note: therefore, I cannot see how you can buy out this car at $4800-$4900 + taxes at end of 64 months.

Residual $11,890 + 13% taxes = $13,435
lease end admin buyout fee $300 + taxes = $339
security deposit applied ($5,500)

Net due on ownership transfer = $8,274 + other small sundry fee perhaps.

Grand total you have paid on the car = $27,382 + $13,435 + $339 + = $41,156


If you consider to finance the entire transaction for 5 yrs @ 3.99%:
MSRP Car + fees = $33,133 + 13% taxes = $37,440

with interest over the term, $3,888

Therefore, the grand total cost = $37,440 + $3,888 = $41,328
[OP]
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Feb 28, 2006
6942 posts
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Richmond Hill
booblehead wrote: based on toyota.ca lease calculator:

MSRP: $31,290
$0 down
$1,843 in fees rolled into lease payment
64 months
22,500km per yr. Meaning, you are allowed 120,000km for the entire term
Residual 38% = $11,890
Interest rate 2.49 as per your post with the condition of $5500 security deposit given, it would be equivalent to a $1630 + taxes in discount (over 64 months term basis). Otherwise, per toyota.ca it's 3.99%
Assumed $0 dealer side discount

Projected monthly $378 + taxes = $427 OTR.
Due on delivery - 1st month + license

Note: therefore, I cannot see how you can buy out this car at $4800-$4900 + taxes at end of 64 months.

Residual $11,890 + 13% taxes = $13,435
lease end admin buyout fee $300 + taxes = $339
security deposit applied ($5,500)

Net due on ownership transfer = $8,274 + other small sundry fee perhaps.

Grand total you have paid on the car = $27,382 + $13,435 + $339 + = $41,156


If you consider to finance the entire transaction for 5 yrs @ 3.99%:
MSRP Car + fees = $33,133 + 13% taxes = $37,440

with interest over the term, $3,888

Therefore, the grand total cost = $37,440 + $3,888 = $41,328
Hi,

thank you for your post. The sales rep also added 19,500 additional km/year raising the annual mileage km to 42000 and the monthly payment to about ~508. When I do this via their website, I see that the Lease end value goes down to $4,610.2. So adding the $300 + tax , it becomes approx $5548 or so. And that's what he said, just pay the $48 at the end of lease term if I want and I can keep the car once I apply the $5500 security deposit.

Does that make sense?
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Jul 30, 2007
25726 posts
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If I use your figures with the jacked up allowance ... residual falls to 14.734% = $4,610.20 with the same parameters

then the revised costs:
Projected monthly - $485 + 13% taxes = $548 OTR

Total lease costs = $35,063

Residual $4,610 + 13% taxes = $5,210
lease end admin buyout fee $300 + taxes = $339
security deposit applied ($5,500)

Net due on ownership transfer = $49 + other small sundry fee perhaps.

Grand total you have paid on the car = $35,063 + $5,210 + $339 + = $40,612

If you then compare this to the 100% finance scenario, then you will save $716 over the course.
[OP]
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Feb 28, 2006
6942 posts
530 upvotes
Richmond Hill
booblehead wrote: If I use your figures with the jacked up allowance ... residual falls to 14.734% = $4,610.20 with the same parameters

then the revised costs:
Projected monthly - $485 + 13% taxes = $548 OTR

Total lease costs = $35,063

Residual $4,610 + 13% taxes = $5,210
lease end admin buyout fee $300 + taxes = $339
security deposit applied ($5,500)

Net due on ownership transfer = $49 + other small sundry fee perhaps.

Grand total you have paid on the car = $35,063 + $5,210 + $339 + = $40,612

If you then compare this to the 100% finance scenario, then you will save $716 over the course.
Thank you! So it does come out cheaper. Now just need to find out if he can give some dealer discount to lower the base price before taxes and fees.

Would invoice+ 3% be a good starting point? I know the new 2018’s probably won’t be able to get as heavy a discount then last year but just want to find a good starting point.
Deal Expert
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Jul 30, 2007
25726 posts
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Toronto
BEfore you conclude leasing is actually cheaper, you do have to consider this:

Leasing - $5500 security. No interest earned for 64 months. Grand total cost = $40,612

Financing - assuming you have this extra $5500 floating around in your piggy bank, then the same $5500 can be used : a) to lower your loan principal requirement to $31,940 + say 4 yrs loan @ 3.49% interest = grand total cost of $39,750 inclusive all cash outlay or b) alternative use of this $5500 and put into tfsa and say you earned 5% compounded annual return (tax free) for 5 yrs (to compare with the same timetable as the lease) which is projected to become $7,020 , hence $1,520 in return ... in which it would net out to $41,328 - $1,520 = $39,808

In conclusion: leasing is NOT cheaper than financing at all.

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