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Lease question

I need some advise/thoughts on the following lease offer

What if I take this lease with the clear intention that I will buy the car at the end of lease term? Here are my thoughts

Initial Payment $2,149

Lease payments $10,465 = $299 * 35 1st payment in included in the initial payment

Purchase at lease end $17,169

Grand Total $29,783

I checked on couple of Car buying sites and the average price paid by folks is $28,481, so my question is does it make sense to lease + buy, because even though I pay $,1302 more but that would be much less than the interest paid if I buy the car at the beginning.

For your reference I am copying the lease terms text here

Lease a new 2011 Sienna LE for $299 a month for 36 months with $2,149 due at signing, which includes first month?s payment, $1,200 down payment, $0 security deposit and $650 acquisition fee. Does not include taxes, license, title fees, insurance and dealer charges. Closed-end lease. Example based on model #5338. Optional equipment varies by region. Manufacturer?s Suggested Retail Price including freight $30,234. Monthly payments of $299 total $10,764. Capitalized cost of $28,458 based on down payment and dealer participation, which may vary by dealer. Payment may vary depending on final transaction price. Lease-end purchase option is $17,169. Customer responsible for maintenance, excess wear and tear and $0.15 per mile over 12,000 miles per year. To qualified Tier 1+ customers through Toyota Financial Services. Cannot be combined with any other offers and may vary by Region. Subject to availability. See participating dealer for details. Offer ends 10/4/10. Offer good in Iowa, Kansas, Missouri, Nebraska, North Dakota and South Dakota.

Assuming you like this van and $28,458 is the lowest price you’d be able to purchase it for, (I don’t have any reason to believe you could do better), this lease arrangement seems very attractive. The financing cost is very cheap, only about 1% per annum.

At the end of 3 years, if the market price of the van is lower than $17,169, you have the option of walking away from this van and buying an equivalent Sienna for less money (or offer the leasing company (Toyota) less than $17,000 to buy the van.

When you finance or lease a car you have two separate transactions – 1) buying the car and 2) buying the financing. You really need to look at them separately. First, get the best deal on the vehicle – what’s the total cost? Second, get the best finance deal whether it’s a lease or loan. Keep in mind you don’t have to finance or lease through the dealer. There are lots of independent finance/lease companies who would love to compete for your business.

The choice between a financed purchase and lease depends upon your personal financial situation. Talk to your accountant and ask what’s the best for you. It’s very easy for car dealers to confuse buyers by obfuscating the details of the deal and just talk monthly payments.


You’re gonna lease for 3 years, then finance the rest for what 5 years? Will you really be owning the car for 8 years plus?

That sounds like an 8 year loan to me, and I think that’s too long.

Can you pay CASH $17,000 at the end?? Or will you have to finance that?? They will not do that for 1%…More like 9%…

I was planning to pay in full when I buy at the end of the lease. How about that?

This is a fairly attractive deal unless:

  1. You must drive more than 12K miles per year average. Big penalty for going over. In my case (20K miles per year), this would be a deal breaker.
  2. There is no zero percent financing available today. Taking zero percent would be cheaper than leasing.

Based on my driving records for last 10 years, mine driving is < 9000 per year and unfortulately 0% is not available on what I want to buy :frowning:

Thanks to everyone for their input and suggesstion.