Auto lease ending- did I get taken???

Question

I'm pretty sure I got taken advantage of in a big way and wonder how how I didn't see it happening!

My credit rating at the time was poor, even though I had a perfect record of making 5 years worth of payments to Toyota always on-time and in-full...

Price of vehicle= $16,419
Down payment= $1,000
Monthly payments of $338.51 for 4 years= $16,559.97
Residual value at lease end= $7,530 (The actual value is $1,500-2,000 higher)

I now have 9 years of perfect payment history to Toyota!

Answer 1

Hi. Forget about the wonderful years you have had with Toyota. The dealer will charge you whatever you will pay. The ONLY way to protect yourself is to shop around. Go back and forth between dealers.
It does seem like you had a high payment. But if your credit is bad, maybe the paymenet was near normal. I calculated you were paying about a 17% interest rate. A lease payment has two parts, the paydown of the residual and the residual amount which is carried for the term of the loan. Also you may owe a turn in fee and some wear and tear, floor mats, tires, ding repair, etc. on the car.

Part A
16224
minus
7530
=
8889
minus
1000
7889

48 months
17%
Part A payment $227

Part B
7530
X 17%
divided by
12
Part B payment 106 + Part A 227 = $333

Answer 2

This is the problem with leases. When you get a lease they have a mileage restriction. You have most likely gone over the mileage that was expected. This would cause your difference. This is one reason why I feel leases are just another way for them to make twice as much money. They got the money for the lease now they will turn around and sell the car and make even more money. It's free money the 2nd time because the car is pretty much paid for.

Answer 3

Leasing is the most expensive way to obtain a car. Bad credit probably played a big part and made your interest rate really high. Your payment history doesn't matter much because the deal was struck when you had poor credit. Your interest rate would not change throughout your loan.

Answer 4

Leasing and purchasing are two very different things. Its on the same level as renting and buying. It all comes down to what your plans are and what your preferences are. Do you want to own a vehicle or do you want to replace it and move into a new one.

Answer 5

Personally I don't think so.

I see interested paid on a car loan and a car depreciating in value.

Answer 6

It sounds like you are ignoring the interest cost on the car. The retailer financed it, and paid interest basically for you.