Freep: Bargain Lease Could Mean Financial Disaster For Toyota

Bertel Schmitt
by Bertel Schmitt

In the market for a new Toyota Corolla? Now is the time. Your friendly Toyota dealer will lease you a well-equipped Toyota Corolla for just $189 a month for three years. With a little shopping around, your monthly payments can be below $150. This may be a great deal for you. “For Toyota, the deal could be a financial disaster,” reports an aghast Freep. “To keep customers coming to its showrooms amid a series of embarrassing recalls, Toyota has been offering some of its best leasing terms in years.”

To make matters even more disastrous, CNW Research noted in a report that one Toyota program requires a credit score of “only 660 to qualify.”

Not that it will be your problem, but Toyota is betting that the vehicles will have superior resale value when they are returned. Experts say they are wrong. Automotive Lease Group estimates that that well-equipped 2010 Corolla leased in a typical 36-month deal that allows it to be driven 12,000 miles a year will be worth about 53 percent of its sale price when its lease term is up. Toyota pegs that at 63 percent. A $1,800 difference in the resale value. The thinking at Toyota most likely is that it’s better to offer a smashing lease than piling cash on the hood. Sell now, pay later.

Anyway. Not your problem. Now is YOUR chance to take Toyota to the cleaners. No law degree or acting skills necessary.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Lilpoindexter Lilpoindexter on Aug 02, 2010

    I've thought about a Honda Fit, or a Versa, or for the first split second I saw this car, even the fugly Corrolla crossed my mind. But then I realized I can work on cars...and a BMW E30, E34, E39, E46, or Mercedes W126, or W201 would just be sooooo much more fun to spend money on.

  • Beelzebubba Beelzebubba on Aug 03, 2010

    Here in Georgia, they're advertising a 36-month lease deal at $119/mo for a 2010 Corolla LE 4AT. It requires $3019 at lease signing and a credit score of 650 or higher. The 'lease-end purchase' price is $12,306. But my local dealer has at least five of these exact models on SPECIAL for $13,575 right now (about $4k off sticker)! I get a feeling they won't be worth $12,306 after three years of use....just a hunch... I've actually been stuck driving a 2010 Corolla STANDARD for the last two weeks as a rental car. The only optional equipment it has is the "Upgrade Package" which adds Power Windows and Power Door Locks. It doesn't even have Keyless Entry or Cruise Control! I can't wait to get my Mazda3 back from the body shop at the end of this week....I hate this thing! I'm not sure why anyone would buy one of these things, even at $13,575! And $119 per month might be tolerable, but what potential Corolla-lessee has $3019 to plunk down???

  • Bryan Kauffman Bryan Kauffman on Aug 03, 2010

    I had been wondering about this as well. They offer their RAV4 for $209 a month $1140 down and give you a 2 year maintenance plan (the first 5 trips to the dealer for service are free). I am trying to get Honda to give me a similar deal on the CRV.

  • Beelzebubba Beelzebubba on Aug 03, 2010

    Here the deal is $169/mo for the RAV 4 but with $2834 down. The CRV LX 2WD is $239/mo with $1999 due at signing. Both for 36 months and with 36k miles. The Toyota 2yr/25k Free Maintenance deal expired on 8/2/10 (here, at least)....did Toyota renew the offer?

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