Toyota Leases: All About Residual Value
Your Toyota lease residual value is an important factor in leasing. It can seriously affect your lease’s cost. Casey Toyota is sharing how a residual value is determined and what affects it.
What is a Residual Value?
When you first lease a vehicle, you’ll set a term length, which usually lasts 24 to 36 months. You’ll also get an estimate of your vehicle’s value at the end of your lease, which is known as its residual value. Your leasing company determines this value.
How’s it Calculated?
Several factors play into your lease’s residual value. Your lender will consider the current market value of your vehicle, as well as its make, model, and year. They also look at the current market conditions and then estimate how much it will depreciate during your lease.
How Does it Affect My Lease Cost?
One of the biggest perks of a Toyota lease is its affordability. The reason it’s so affordable is that you only have to pay for estimated depreciation during your lease. The vehicle’s depreciation equals its current market value minus its estimated residual value.
What if My Residual Value Was Wrong?
At your lease return, your vehicle will be assessed. If it’s worn or damaged, or they simply overestimated its value, your residual value is likely too high. If that’s the case, you may owe a depreciation charge (or more than you expected if you decide to buy). If the residual value was too low, that could result in a great buying price.
Lease a New Toyota Vehicle in Williamsburg, VA
It’s easy to secure a new Toyota lease at Casey Toyota. In fact, we can help you lease a new Toyota vehicle with just a few simple steps. Stop in to get started today!
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