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What does "due at signing" mean?
Posted by: Dakota
Date: January 23, 2009 08:52PM
Toyota has a lease plan for Camry that read like this,

$199 a month for 36 months
$2199 due at signing
Excludes hybrid model
Model 2514
Offer Ends 2/2/2009

Stopped by the dealer and asked about it. He says you need to put down another $2000. I said due at signing means all the cash in the mix. He says no but the ad makes no mention of any down payment. What do you think?

[www.buyatoyota.com]
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Re: What does "due at signing" mean?
Posted by: C(-)ris
Date: January 23, 2009 08:56PM
I would take that to mean you make your 1st months lease payment and $2000 down for a total of $2199 due at signing. Plus tax, title, and license fees of course.
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Re: What does "due at signing" mean?
Posted by: mrbigstuff
Date: January 23, 2009 08:59PM
another $2000 on top of the $2199...? I'm not sure I follow what you are saying.

if that is the case, I am sure you can talk to another dealer who would like to work with you. and, since Toyota certainly wants to move cars, maybe you could call their office (wherever that is) and ask about this particular dealer.
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Re: What does "due at signing" mean?
Posted by: Seacrest
Date: January 23, 2009 09:25PM
What is the sale price of the car?
The monthly payment (on a lease) reflects that price minus the so-called residual value divided by the term.

So a $20K car with a residual value of, say $12K would be ~$220 a month for 36 months, or $8000 / 36. If you return the car in good working order after the 3 years, you get to walk away. If they determine the state of the car to be worth less than the residual, you pay the diff. If you can sell it for more privately, you get to pocket the diff.

To get the payment down to around $149 (you know, for the ads), they amortize another $2K or so into the term and call that a "cap rate reduction cost," which is really another word for "down payment."

That's why the ads all say "$xxxx due at signing."

At least that's my understanding of it.
I have never leased a car.
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Re: What does "due at signing" mean?
Posted by: Seacrest
Date: January 23, 2009 09:30PM
PS: When leasing or buying a car, one should always negotiate the total price of the car and options as if one were paying cold, hard cash.

Never, EVER buy based on the advertised -- or negotiate toward a particular -- "monthly payment."





Live from Berserkeley, California | Originally from the City of Brotherly Freakin' Love | WEEEEEEEEEE! Stuff, yo.
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Re: What does "due at signing" mean?
Posted by: Dakota
Date: January 23, 2009 09:34PM
Quote
mrbigstuff
another $2000 on top of the $2199...? I'm not sure I follow what you are saying.

Exactly. That is what I told him. I always thought due at signing means everything. If we go by Seacrest's numbers then $200 a month is not even enough to cover the principle so may be there is additional money involved.
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Re: What does "due at signing" mean?
Posted by: Dennis S
Date: January 23, 2009 10:18PM
You pay $199 (the first month) plus $2000 while you are sitting at the desk. A total of $2,199. Then, you pay $199 a month for the next 35 months. Then, in 36 months, when you turn it it, they might claim you damaged it or didn't take care of it or drove it too far, and won't more money. If you refuse to pay, they will ding your credit report. Your credit card interest will likely go up. Then your car insurance will go up.

Or, you could buy it and mike higher monthly payments and keep it beyond 3 years. If you sell it after 3 years, you probably won't be out as much as if you had leased it and paid $9164 (I think.) Look at Edmunds at a 3-year-old similar Camry and see if it has depreciated much more than $9164.
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Re: What does "due at signing" mean?
Posted by: AllGold
Date: January 23, 2009 10:28PM
You're more right than the sales guy, except...

I don't care what the ads say, you're almost certainly going to end up paying more than $199/month. Unless, of course, you pay an extra $2000 up front, then it's easier to keep the payments at $199/month after they add all the other crap to the lease.

This is one of the reasons why I will never lease a car again.



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Re: What does "due at signing" mean?
Posted by: bruceko
Date: January 23, 2009 10:40PM
I thinks the salesman is either an idiot or a liar.
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Re: What does "due at signing" mean?
Posted by: The UnDoug
Date: January 24, 2009 09:20AM
It's not an either or proposition, my friend. winking smiley
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Re: What does "due at signing" mean?
Posted by: billb
Date: January 24, 2009 09:36AM
$2,000 cash or trade. $199.00 first payment.

Newspaper ad ?
It's also possible Model 2514 may only exist on paper.
I'd bet $10.00 they don't have one [2514] and it would take "weeks" to get one.Or that's a 2008 and [2514] was 'on another dealer's lot'.



The $199.00 is the bait. The cash is the difference between what the lease would be without making up the diffrence of the principle.
You could probably lease a Lamborghini for $199.00 / month, too. Cash or trade at lease signing would be a tiny bit more. :-)


99/100 people drive away with model 2515 and a $289.00 /mo payment. :-)



Edited 1 time(s). Last edit at 01/24/2009 09:40AM by billb.
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Re: What does "due at signing" mean?
Posted by: Dakota
Date: January 24, 2009 11:28AM
Quote
billb
$2,000 cash or trade. $199.00 first payment.

Newspaper ad ?
It's also possible Model 2514 may only exist on paper.
I'd bet $10.00 they don't have one [2514] and it would take "weeks" to get one.Or that's a 2008 and [2514] was 'on another dealer's lot'.



The $199.00 is the bait. The cash is the difference between what the lease would be without making up the diffrence of the principle.
You could probably lease a Lamborghini for $199.00 / month, too. Cash or trade at lease signing would be a tiny bit more. :-)


99/100 people drive away with model 2515 and a $289.00 /mo payment. :-)

Your are close. He said if you want to pay $2200 total, your payment would be $255! This includes tax and perhaps first month payment. Not a an entirely bad deal. Domestic have no lease offers and they are losing a ton of sales.
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Re: What does "due at signing" mean?
Posted by: Mr645
Date: January 24, 2009 11:44AM
It means you need to pay $2199 at the time of delivery, signing of the contracts. The $199 is taxable in most states, so ad sales tax.

Also, many leases have a termination/inspection fee of $250-$350, but will often waive it if you buy/lease another car of the brand.

The residual is a fixed value at the end of the leas term. When the lease is over, you can.

Turn in the car, pay the termination fee, if any, pay for any excess milage you may have driven, and pay to repair any damage or excessive wear the car may have. If your within the milage, no damage to the car, just turn it in regardless of what it may be worth. You can also buy the car if you want, for the residual price.

I lease all my cars. 2003 Toyota Matrix XRS. After 36 months I was going to owe $2700 in over milage plus $900 for damage to the rear bumper. I bought the car for $9700 residual value from the lease company, and because I financed it with the same bank as the lease, I negotiated a great rate. Since I bought the car, the milage and damage did not matter

2007 VW Jetta, lease was up after 24 months, we were way under milage, 12K on a 20K milage lease. The residual was $14,500, the car was worth about that, but we decided to turn it in.

My brothers 2006 Trailblazer SS. He was over milage and also had installed performance parts on it. The residual was $22k, probably accurate back in 2006, but this month the truck would bring closer to $15k. Of course he did not buy the car for $22k. He turned it back in to the dealer, they bought the truck from GMAC for $13,700, inspected the car, fixed the brakes, made it a certified used car, added a 4 yr warranty and my brother bought the truck back for $17k, all in one day. He still had to pay $2k for over milage since the car was turned in, and the excessive milage was part of the reason the dealer was able to buy it from GMAC for a lower price.
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Re: What does "due at signing" mean?
Posted by: AllGold
Date: January 24, 2009 12:00PM
Since it's impossible to get a $199 payment on the lease (without dumping in a ton of money up front), if you want the car just buy it. Negotiate a reasonable discount, get a decent interest rate on a loan (from a credit union if Toyota won't) and put $2000 down. Or don't put anything down if you choose, but that will increase your monthly payment.

You will come out ahead. Yes, your payments will be higher than $199/month and even higher than $255. But with a lease, at the end of the lease term, you have nothing. No car and no equity / trade-in value. If you want to continue driving, you're forced to start all over with another down payment and no way to lower your payments with a trade-in.

If you buy, after 36 months you still have a car. You can keep driving it if you want, paying only the monthly payments (assuming it isn't yet payed off). Or if you want a new car--as long as you're not seriously upside down on the loan--you can sell it or trade it in because it has value.



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Re: What does "due at signing" mean?
Posted by: Dennis S
Date: January 24, 2009 12:25PM
With the market like it is, I would negotiate like crazy and get 3 or 4 lots and play them against each other.
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