Toyota Offering Five-Year Leases to Comply With Cash for Clunkers


Part of the small print in the Cash for Clunkers legislation is that it can only be applied to leases with terms of at least five years. Most lease deals are for much shorter terms — two to three years — because the allure of a lease is that you get out of a car and into a new one quickly.

Toyota is one of the few automakers we’ve heard of that will offer five-year leases, created just for the program. The 60-month leases are available for the Yaris, Corolla, Camry, RAV4 and Tacoma. One sample offer for a Yaris lease lists a headline-grabbing monthly payment of $79 per month for 60 months. The money you’d have to pay up front is $5,229, but if you deduct the $4,500 Cash for Clunkers credit, you’d end up paying $729 up front.

How much would it cost you to buy a Yaris in the same scenario and own it outright at the end of the term? Financed at 2.9% for 60 months, with that same down payment, it would be $125.03 a month, not including tax or destination.

The lease also allows you to drive only 12,000 miles a year. Offers vary by region.







Wow! Those are some incredibly low numbers! I didn't realize before that the CARS program could generate such low payments for a new, fuel efficient car.
Perhaps there are some wings behind this program after all.


This bill is still confusing as hell.

So in order to qualify for any amount of this legislature, the vehicle trading in must be between 10 to 25 years old, worths less than the voucher amount, in drivable condition, be insured continuously for a year before trading in, and must get 18 mpg rating or less?
Is the 18 mpg or less a must for this?


Leases are made to fool people
Look at Dan. He is fooled already.

Look, Dan. You pay $5.230 + $80x60 = $10,030.
This is in 5 years for a $14K car.

Dan is perfect example of fooled American.

These companies designed leases to make you think that you still can drive a new car, even if you don't have money to buy one.

My suggestion: live by your possibilities. Don't be jealous of others. Look at the car as transportation and not more. Follow these principles and one day you will buy your new car for cash, which is the best way to buy a car.

The 18 mpg rule is definitely a MUST. Please check out all our Cash for clunkers coverage. It is pretty straight forward:



How about the 10 year old rule?


Before your head explodes from being so full of yourself, try using it for a bit.

Exhibit A) Ummm, $5,230? Didn't you even RTFA?

Exhibit B) With even a minimum understanding of finance you'd realize that your future payments need to be discounted at the time value of money. Many consumers have an incredibly high discount rate of 45% or more. But even given a reasonable rate of 10%, the net present value of your payments is $5,229 - $4,500 + PV(10%/12,60,80) = $4,494

Exhibit C) People who lease aren't doing so for a lower total cost of ownership. If that was their goal they'd take a loan to buy the car outright and sell it when they were done. Leasing is all about keeping monthly payments low. Perhaps you're a very rich man (unlikely as fools and their money are often quickly parted), but most people have a limited monthly income and therefore can't afford the larger payments from purchasing. The lease allows those within minimum income to move into reliable, efficient transportation. Without such it can be difficult to maintain a job and will cause other difficulties.

How do you propose that someone with only $100 a month to spend on transportation pay $200 a month in payments to buy? Or should they just save money for 8 years and buy outright? How are they supposed to get that money when they can't drive to work?

Should they buy used instead? Probably. But you'd be hard pressed to find a used car that is just as reliable and fuel efficient for $80 a month with only $729 up front.



you probably think - you're right. But I think, your exhibits B and C show that you're wrong.

Exhibit B: Whatever you count over there... If the car cost $14K, I don't pay more then invoice anyway, so it is about $13K at this point... + $4.5 government voucher... This car will cost me to buy about $8.5K + tax. $8.5K I would pay any time in cash. Why make it $10K for 5 years and it is still not yours if it is 8.5K today and it is fully paid?
You make no sense, man.

Exhibit C:
Read my post, man. Lease is a trap for people who never heard of economics (most Americans).
Yes, you can find a reliable and fuel efficient used car. I found 6 or 7 of those. The fact that you doubt this shows that you're wrong because studies proved it long time ago that buying used is better then new.
I am not rich but I never has a single car payment while drove reliable cars. I believe, my discipline allowed me to get ahead in life and enjoy things that other people also enjoying but paying or it years afterwords.

Dan, you 're sucked into this system already. I see it. They fool you, man. Come out, take 5-10 years to build a strong portfolio and you will be driving what you really want. But you need a wife who cooperates. I am lucky - my does.


Tony -
I hate to pick on people because of poor grammar or spelling, but I honestly can't understand most of what you've written. Therefore I can't really respond it.

The one thing I could make sense of is you thinking this is about me. This isn't about me. I always buy, never lease. I always buy used, never new. I always pay cash (unless I get a crazy low rate on financing that is lower than the return I'm getting on my investments, which does happen from time to time).
What this is about is accessibility. There are many people who have a limited, fixed budget and need a reliable, efficient car right now. They can't wait for years to put together a portfolio and accumulate savings. They have a job to get to and children to feed. Your suggestion is the ideal, but doesn't account for realities. Many people don't know how to pick out a good used car from a bad one. Many can't afford the payment on purchasing a new one. For these people, this is a decent, affordable option, much more so than in the past. Therefore this is quite exciting for them.



"Exhibit B - If the car cost $14K, I don't pay more then invoice anyway, so it is about $13K at this point... + $4.5 government voucher... This car will cost me to buy about $8.5K + tax. $8.5K I would pay any time in cash."

Exhibit B is incorrect - 13K, (if possible), is actually 13K + $55 Doc. Fee + $50 Smog Fee + 1.3K taxes + $75 License Fee + $350 Ca. Reg. Fee + $8.75 CA Tire Fees - $4,500 Cash for Clunker = $10,400, not $8,500 plus taxes.

I don't have a wife that cooperates - Get real man.

To buy the car is more like a payment of $173.00 per month, (buying the car at the 13K and taking off $750), for a total amount paid out of $11,130.

If one could save up during the 60 month lease to buy the car with cash that would be a total amount paid out of, (got to figure actually $85 per mo. w/taxes), $11,366.

So, Tony pays $10,400 cash now.
Buying the car at the rate of 2.9% a person pays out a total of $11,130 over 5 years and loses $700.00 over what Tony did.
Leasing the car cost the person $1,000 over paying the entire cash out now, and gives one the option of buying the car via finance if they don't have the cash, or giving it back if one doesn't have the cash.

The best deal to me is if one can buy the car over the 5 year period, because 2.9% is very low.



I have a 1992 Silverado w/121K miles. The A/C needs to be repaired and that would be quite expensive.
My dad gave me the car 5 years ago as a graduation present.
The trade-in value the dealers are willing to give me is around $1,300 on a used car.
I have no savings, and can only afford around $100.00 per month.
My job could end at anytime.

What is your advise for me? Do I take advantage of the program or let the money just be thrown away on some other stupid government program of Obama's?



I am serious. I fit Dan's profile.
I buy used cars like u2 do.
I have gone through this in my mind, and the stipulation of the 60 month lease being written in the bill was the drawback for all the other car manufactures, except Toyota. When they came up with this Lease offer it has really made me think. I don't need this 5.7L truck w/o A/C in So. Cal., and it gets poor gas mileage.
None of my friends have advised me seem like the same logic of my friends, who buy used cars with cash and keeps his 1972 Ford Station Wagon for 23 years, and his 1981 318I he still has.

Please advise, I am all ears.


Tony, your criticism of Americans is generalist and ignorant. It must also mean that you're not an American based on your grammar. If that's the case then you really shouldn't be criticizing anyone (after all, aren't all the non-American countries so perfect?).

For people like Erich, this program makes COMPLETE fiscal sense. For people with the means to finance this car it's a smart deal (use the banks money instead of your own). But let's not fool anyone here. It's an inexpensive Toyota. The factory warranty is NOT five years bumper-to-bumper. That means the buyer is on the hook for two years if something non-power train related malfunctions.

For a little more money, the Corolla would be a better car to live with for five years (or longer).



I just talked to my brother, and we think the Corolla at $99.00 a month is a great deal!

Ken L.


My suggestion would be to finance this car after final negotiations. Think about this for a minute, if you could afford about $100/month x 60 months already equals $6000 + $4,500 (your Chevy clunker trade in) = $10,500. Your credit needs to be decent for leasing it anyway, so why not just finance it for 5 years? You’d OWN IT after paying it off, therefore you could reduce your insurance coverage, if you wish to do so, and save additional $. Plus, I don’t think you’d have a hard time negotiating on a Yaris or most Toyotas these days. Timing is everything and now is a great time to BUY a new car. I must warn you though, I used to drive own a 4runner and going into a Prius, even though it’s a midsize car, you’d really have to get used to driving something smaller, closer to the ground, and not tank like. Of course, you would also be saving a ton in gas and hopefully maintenance. Just my .02. Good Luck.


Thank you Ken,

The Dealer played the typical numbers game on me. I had everything in writing and the salesperson and closer jerk could see that my math was adding up, they just wanted another $1,000. They were just trying to fool me with the numbers. They took forever. I asked the salesperson and the closer jerk for the keys to my clunker and they just ran off doing other things...typical...just like they used to do when I sold cars in 1984. I should have called the cops like one of the customers did in 1984 when the closer jerk kept his keys. I had to go to the head manager and ask for my keys back.

What a bunch of jerks! LOL!



Ken put it nicely for you from one side.
You need to calculate how much will you spend on the car per year. In my best case I've spent $650 per year average to have a car over 5 years on used car. Currently I have a car of 11 years, which I purchased new and it running me into $1500 per year.
Definitely, this is attractive deal to get $4500 from the government. And for somebody who has required clunker and looking to buy a new, small car it is a sign to go to the dealer.
Erich, my numbers were sample. I just looked that 2009 Toyota Yaris 5-Dr Hatchback invoice is $12,640. I don't know what kind equipment you will need in the car. May be your car's invoice will be $14K. I don't know. But you should count $14K + all required fees, such as taxes. But dealer document fee? I would not pay. In February I purchased a car... I was about to walk on dealer because he wanted me to pay $140 doc fee at first, then $80, then $60. I told him that I am here to drive out in this car. If he will continue to add made up fees, I will find another dealer, who will not.
Getting back to your Yaris... If the price is $14k you will end up with (approximately) $15.5K - 4.5 = $11.5K to pay
If you buy, you may pay more then $13 in total if finance but it will be yours and you can drive it for 10 years. Your payment will be more then $200 if you don't put more money down. This car will be relevant for the long time because cars will get smaller in the future.
If you lease,
you have $5K to pay upfront (also, you can bargain on this amount as well as monthly payment, mileage, etc with the dealer) And then you'll pay $80 monthly + tax, etc. When you done paying, in 5 years, you will be looking at around $6K, or a little more from your pocket, which will put you in the line of $1300 per year, thanks to the govmnt's money. So, it is not bad, if you have the clunker. But get ready that in 5 years you will be again starting it all over.


"...Tony, your criticism of Americans is generalist and ignorant. It must also mean that you're not an American based on your grammar. If that's the case then you really shouldn't be criticizing anyone (after all, aren't all the non-American countries so perfect?)..."

I reserve the right to critique Americans in bad grammar. OK?
My criticism is relevant. Most Americans spent a lot of time watching major sports but have no time to learn how their own financial system works. for example, they are naive thinking that great bank provides great service, etc. Remember, all the services are there for one reason - to bring profit to the bank.
What is the difference if I am American or not? I tell you how life goes in USA. People don't know the system they live in. This is why educated foreigners come to US and strive. They are not naive and don't become prey financial sharks.



This is a beautiful country. Don't contaminate it. I'm also a foreigner. Americans gave me opportunities. I appreciate it and won't be proud to beat American to be in a better position. Obama can even be the President. That tells a lot on how great Americans are. This is truly the land of opportunities.

Also, regarding car purchasing alternatives, you really can't make decision based solely on financial factor. Although I couldn't agree more that we should never live beyond our means, we sometimes should spend based on personal desire as well. You don't want to look back, 20 yrs from now, and realize that you've missed the chances to enjoy something you would have liked 20 yrs ago, right?



It's thrive not "strive". Another word you should learn and appreciate is humility.



Obama = end of America as we know it. And why are you telling me this: "This is a beautiful country. Don't contaminate it. "?

I never said anything bad about America. I said, American people are being fooled by everyone, from car dealer to the president. Many live here from birth but don't know how capitalism works. Why do you give me you tirade about YOU being a great American?

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