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Multiple security deposits with Toyota: another way to save on leasing!

Published on June 26 2015

The residual value is probably the most important given that it represents the amount you will need to pay at the end of the lease in order to buy the vehicle if you so choose. We must remember that when leasing, you are in essence only paying a portion of the car. For example, if you lease a vehicle with a 52 % residual value, you are paying only 48 % of the car over the term of the lease.

That explains why leasing is usually the most affordable way you can get into a new vehicle. Some say it is less advantageous financially to lease then to buy outright, but the reality is not as black and white. Some people prefer to lease because they like to change their vehicle every three or four years. Others need to lease because they have a business and can deduct more of the cost a leased model. Some do not want to be bothered with paying for repairs on a vehicle after the warranty is up, so they prefer to lease and drive a vehicle that is completely covered.

In the end, there are advantages to both alternatives, and you have to do a few calculations to determine which is the better option. A key variable in figuring out the total cost of leasing versus financing is the interest rate. Generally, the interest rate will not be same for leasing and financing. If the interest rate is significantly lower when leasing, it may be the better alternative.

And now, Toyota is giving buyers a chance to lower the interest rate even more when leasing by providing the option to make multiple security deposits. A security deposit is an amount you give at the beginning of a lease to cover damages that may occur to the vehicle over the term of the lease. This amount will vary from one model to the other, but let’s just say that it is 500 $. Normally you would pay this amount upfront at the beginning of the lease.

With Toyota’s Multiple Security Deposits program, you can make up to nine additional security deposits. For every deposit you make, Toyota reduces the interest rate by 0.15 %. So if you make 10 security deposits in total, you have just reduced your interest rate by 1.5 %.

What does all of that mean in real numbers? Let’s have a look at an example.

We will take a base 2015 Toyota RAV4 and lease it over 48 months. The monthly payment in that case comes out to 271 $ according to Toyota.ca. The interest rate is 1.49 %. If you give 10 security deposits, which for the purposes of this example we will say are 300 $ each, then you have lowered your interest rate to 0 %, which means your payment drops to 253 $. Over 48 months, you save 864 $ and the best part is, you will get the security deposit back at the end of the lease! In essence, you have just invested 3000 $.

Special offers like Toyota’s Multiple Security Deposit program are designed to help you save money, and yet not many people know about them.

To learn more, come in today to Mendes Toyota and speak with one of our representatives who will give you all the details!

 


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