How Does Toyota Financial Work?
Toyota Financial, sometimes referred to as Toyota Financial Services, is the auto finance arm of Toyota, and helps arrange credit and finance for customers looking to buy or lease any type of Toyota car, truck or hybrid.
It is not quite the chicken or egg question, but it is important to decide whether or not to focus on the car or the money first.
Some people will decide what type of Toyota car they want first, and then decide how to pay for it and whether or not to buy a new car, to lease one or buy a used pre-approved Toyota vehicle. Other people will decide how much they can afford to borrow first, and then decide which type of car they want to buy.
Either approach is okay, so long as the individual is careful about their budgeting and is realistic about how much they can afford to borrow and repay and what type of vehicle that will buy them.
Toyota Financial Costs – Sales and Leasing
The costs involved in buying any type of Toyota car or truck need to be identified and carefully itemised. Initially there is what is known as the list price of the vehicle, often referred to as the MSRP.
This is normally the price that the dealer will advertise the car at, and the customer should be able to negotiate a fairly hefty discount of this price. In addition, there are likely to be the charges such as a local or national sales tax, some type of registration or title fee charge, and what are known as documentation fees.
Documentation fees sometimes referred to as doc fees basically refer to the paperwork involved in the whole transaction of selling a car, but can often be used by a dealer to include significant costs that can compensate for any money as they are losing through negotiation on other areas of the sale.
What is important, is that these charges are flagged up during the sales process so they are transparent and clear as to what they are and what they relate to. The whole negotiation process is best on the possible either over the phone or by email, with the final transactions being completed in the showroom if necessary.
This gives the customer much greater control over the whole sales process as they can simply walk away if they do not like it and go to another dealership.
Toyota Financial – Leasing
For many people there will be significant benefits in releasing a new car or truck as opposed to buying one or buying a used Toyota vehicle.
Leasing a Toyota car or truck should be thought of essentially as a long-term rental, in the sense that the customer does not actually own the title to the car, that stays with Toyota, but they have effective use of it certain to subject conditions for the length of time of the lease contract.
The main attraction for many people is that they are therefore able to have use of a new car at a significantly reduced cost compared to what it would cost them to buy it outright. There are also significant advances by way of having a manufacturer’s warranty, and the reliability that comes with that.
There are also likely to be advantages by way of various vehicle protection plans and servicing and maintenance contracts.
A lease agreement will be subject to the same credit checks and arrangement as if you were buying a car, there will be a lease contract for a specified period of time, but often between 24 and 60 months, there will be a fixed monthly payment cost, a fixed mileage either per annum or for the overall period of the lease and most significantly what are known as lease end costs.
Lease End Costs
Lease end costs are often the most contentious part of any lease agreement. They basically relate to charges made at the end of the lease period that relate specifically to excessive wear and tear in the vehicle, and any external damage repairs that need doing to the Toyota car or truck itself.
What constitutes excessive wear and tear can sometimes be a bit of a grey area, but any lease agreement should specify exactly what the areas of that need to be checked and how they will be assessed.
In addition any excess mileage that has not been bought to lease period will also be charged at a rate that should be specified in the lease agreement itself. If you weeks or months before the lease expires the customer should be notified of the need for a lease end assessment, where the charges can be worked out and verified.
The customer will be given the option of having any repairs or work needed done by themselves, prior to the lease finishing, or letting Toyota to the work and charging the customer accordingly. There is also likely to be the option of purchasing vehicle outright at a significantly reduced cost, and if this option is taken up then lease and costs will be adjusted accordingly.
Toyota Financial – Vehicle Protection
The need for various types of vehicle protection plans come with any type of sale or lease of any Toyota vehicle, car truck or SUV. The specifics of these plans will depend on the type of vehicle sold or leased, in addition to what options any customer chooses to take out as well.
There are a number of vehicle service contracts and servicing and maintenance contracts can be looked at, and some of these can be negotiated at the time of the sale or lease agreement. That may also be some type of incentive by way of a prepaid option for servicing and maintenance.
There is also likely to be a possibility of a manufacturer’s warranty, possibly a dealership warranty and possibly an extended warranty depending upon the age and condition of the vehicle. There may also be the option of purchasing some type of roadside assistance or emergency transportation cover.
Customers should be aware that this type of plan can also be included in various auto insurance policies and should therefore be avoided in order not to duplicate cover.
Toyota Financial – Insurance
Anyone buying or leasing a Toyota car or truck will be aware of the need for some type of auto liability insurance, depending upon where you live and what are the legal requirements are, and also what the legal requirements maybe if you buy out-of-state, and need additional insurance coverage.
In addition to any legal requirements, the Toyota dealership is likely to require you to to take out additional insurance cover, which may include some type of comprehensive and/or collision insurance, and some type of gap insurance as well.
Gap insurance is designed to pay the difference between the final sale price of the vehicle, and its insurance value in the event of a total loss or write-off. In such an event, its value would be assessed by the insurance company as to its market value, which is likely to be significantly less than its final sale price.
This would lead to a potentially significant amount of money which would remain as an unsecured debt to the customer which they would need to pay off. This type of insurance policy is designed to cover that potential debt and is likely will be a condition of sale or lease agreement. The cost of its however is normally negotiable. There will also be additional insurance requirements if commercial finance or credit is involved
Toyota Financial – Credit rating
Any agreement with Toyota Financial, whether to buy or lease any vehicle will depend upon the credit score of the individual.
To that end, it is well worth the customer getting hold of a copy of their credit report and making sure that the information contained in it is accurate and up-to-date.
The credit report will be used as a basis for creating a credit score and the subsequent decision by Toyota Financial whether or not to lend you money, and if so on what terms and conditions.
Prior to any final negotiation, it is always a really good idea to get at least two or three different financial quotations from different financial institutions such as a bank or a credit union. These can then be used as a basis for comparing all quotations, and cash be taken that they are all able to be compared on a like-for-like basis. Even if you consider yourself to have bad credit or poor credit, it is still worth applying.
Anyone looking for some type of commercial finance will find Toyota Financial fully focused on providing help and assistance were possible.
The process of applying for credit, and for negotiating final sale price of any vehicles involved will be the same as for an individual customer, merely a difference of scale.
The one essential difference will be in the credit application, where significant in more information is likely to be required but individual applying for credit, details of their company or business, possibly details of their family and work colleagues as well as a more detailed credit history disclosure.
Toyota Financial Account – Finance Tools
Many Toyota customers open an account with Toyota Financial as a way of applying for pre-approval for credit, and also as a way of being able to buy pre-approved cars.
Once an account has been opened, it gives the customer access to a number of financial tools that can be really helpful. The most obvious one is an on-line calculator that allows them to realistically work out their budgetary requirements and constraints, and assess how much they realistically can afford to repay on any loan agreement.
In addition, they should be able to download copies of manuals and other technical information relating to the car or truck they have bought or leased. Many customers also use their Toyota account as a way of overseeing and managing payment for the vehicle, as well as being able to contact Toyota in the event of any problems, either regarding payment or any other issue regarding the sale or lease agreement once completed.
Incentives – Loyalty Offers
Incentives and loyalty offers are standard practice in the industry, and can offer significant savings if negotiated wisely. There is always the danger that they can also blur any real savings, and it should always be remembered that any discount is only as good as the actual figure it is discounting the first place.
Toyota Financial are likely to offer a number of incentives. These can be by way of both national and local offers. Often these offers are aimed at people who are currently serving them have served in the military, college graduates and sometimes people still at college.
In addition, there are likely to be offers on specific vehicles at specific times of year as a way of moving inventory, and certain finance deals normally offering a low or zero rate of interest on certain models. These finance deals will normally be restricted to people who have a very good or excellent credit rating.
Toyota Financial – Refinance Loan
Refinancing a car loan can be done at pretty much any period of the loan, and can be done for a variety of reasons.
Many people will look to refinance as a way of reducing their monthly payment, possibly to allow a cosigner to remove themselves from the loan, and sometimes to increase their monthly payments if they want pay off the loan early.
Depending upon how the loan is structured, the majority of repayment costs in the first year 18 months of the loan will relate largely to interest payments, and therefore refinancing loan can often generate significant savings depending upon the terms and conditions of the original credit agreement.
Vehicles – Reviews TBA
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Toyota Highlander Hybrid
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