Is this a good lease offer for a 2010 Toyota Camry LE?

[asker31]

Went to a dealer this past weekend and was given these offers for a 2010 LE Sedan 2.5L 4Cyl. 12k miles a year for 36 months. MSRP of $21,900.

Giving $3,250 down (includes all fees, taxes, etc) monthly payment is $179/month.
Giving $2000 down (includes all fees, taxes, etc) monthly payment is $221/month

I live in New Jersey.

 

[Johnny]

yeah if your a rich man

 

[sage]

For all intents and purposes, the two downpayment/monthly payments are close enough to not be relevant compared to choosing the one that best meets your current cash and future monthly budget criteria. Of the two, however, the first is the less expensive overall in terms of pure cash.

You've omitted one of the most important factors, however, which is the residual value at the end of the lease term. You've also omitted the actual "cap cost" (the value assigned to the vehicle at the beginning of the lease), which should never be as high as the "sticker" price. Negotiate accordingly.

Presuming reasonable current interest rates and that there are no further incentives or rebates, the lease is either being calculated based upon a residual value of 58% if you're paying full sticker price or 53% if it includes any sort of reasonable negotiated capitalized cost. All of these are very much in-line with typical 3-year depreciation values for most vehicles.

However, the price at which you may choose to buy the vehicle at the end of the lease remains unknown. It will either be approximately $12,600 or $10,500, two very different propositions. Granted, this means very little if you've already decided that you won't be interested in buying the vehicle and are certain of both not exceeding the maximum mileage limitation and not driving the vehicle so little that you may have a considerably more valuable vehicle in three years' time. The difference can be whether the lease is exactly as you planned, becomes unexpectedly expensive, or provides you with the prospect of a windfall at the end.

Personally, given the relatively poor regard for which the current generation Camry is held considering the progressively cheaper interior materials and lack of investment each of the most recent generation Camrys have featured, there's certainly nothing compelling about it compared to many other much finer vehicles being offered at considerably better values like the 2010 Motor Trend Car of the Year Ford Fusion, Mercury Milan, or Ford Taurus, which would also be doing yourself the dual favors of enjoying a finer vehicle and supporting Ford, and the American economy, at a time when doing so has never been more important.

Best of luck. I hope this helps.