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DISCUSSION FORUMS : Forkliftaction.communicate
Forum: Industry News & Whispers
Discussion:  Toyota Leases? Should I be concerned
Number of messages: 42
Page: 1 [2] 3
Normandy
Co. Cork, Ireland

You seem to like your existing supplier and have a good relationship with them. It is difficult to put a monetary value on that , but is is considerable.

I had a similar experience with a German supplier a few years ago and the customer told me afterwords that he was very sorry to have changed to them, it cost  them an extra 70,000 euros in questionable damage in just 18 months. He was very happy to return and I hope we will have them ever more.

My advice is if you are happy STAY WHERE YOU ARE, there is nothing for nothing even if you are Toyota.  Even they have to pay wages , costs etc like everyone else and have to  recoup things somehow. You will pay eventually ,  you have to.

Posted 7 Jul 2009 06:13 PM Reply  Report this message
johnr_j
Georgia, United States 		OPTS GUY,
1.  All I can say no one including in your company operates a business as an ONPO (obviously not for profit) company.
2.  My experience is that Toyota in the forklift world and auto world is not known to be a low priced seller.

3.  I'm certain they are a reputable company to deal with and their agreemetns meet all tests. But how things are structered in the contracts are what you need to fully understand with whoever you do business with.  Remember all the Many Mae & Freddy Mac stuff we are dealling with?  And all the laws getting passed that the elected officals representing the people don't fully read or read at all.

4.  With that being stated, somewhere along the line profit will be realized.  My suggestion to you is get the details of the lease contract and the maintenance agreement and a good magnifying glass (for the small print) review it carefully underline anything you have questions about or some vague language and get answers (in writing from whoever you are dealing with).  Have a second person take at look at it - sometimes your wife is also a good person to review things (women are better at details than a lot of men)
For example, is there a clause in the maintenance portion that states that the dealer reserves the right to renegotiate the maintenance rate after 2 or 3 years in the contract?  Is the lease a 3+2 lease meaing teh monthly payments look like a 60 month lease and you have the option to opt out after 3 years, but if you don't confirm your option to opt on or before a specific day you become locked in for 2 more years?

5.  Generally, the leasing company &/or the dealer are responsible for the residual value.  Your obligation is to make certain that the equipment is turned in with normal wear and tear, complete & all abuse items are fixed.  Always at the end of any lease, have a condition report prepared at your site and signed by an authorized representative of your company and from the dealer before the unit is picked up.  Keep a copy for your records.

6.  Finally, I totally agree with Normandy's comments.  I once had a fleet manager responsible for over 7000 pieces of rolling equipment (most were forklifts) and he stated that dealing with a supplier that he knew and trusted was worth anywhere from 15 to 20% more than the new "kid on the block " with a better $$ and it helped him budget operational expenses easier and more accurately- i.e. no surprises.

That's all I can say.

-------------------------
"Have An Exceptional Day!"

Posted 7 Jul 2009 10:02 PM Reply  Report this message
OPTSGUY
Illinois, United States 		Thank you everyone for your input.  This is a good site to get an outside perspective of what really goes on out there.  Take care all!

Posted 8 Jul 2009 12:29 AM Reply  Report this message
johnr_j
Georgia, United States 		If your sales person has a nickname of BLAGO .... run.

-------------------------
"Have An Exceptional Day!"

Posted 9 Jul 2009 02:18 AM Reply  Report this message
EasyM
South Carolina, United States

 		Two years ago, I was in on a deal against Toyota. The deale took place in Canada and the customer had 3 Toyota's nearing the end of a 5 year lease. The Toyota dealer surveyed the trucks and submitted a proposal for each truck from $5,000 to $6,000 in order to get the trucks ready to turn into the leasing company. The customer was upset, to say the least. He was juuuuust about to place the order with my company. Then came the hook from Toyota. They told the customer that the fee to repair the existing trucks would be waived if they ordered 3 new Toyota's.

Sadly, I lost the order but the customers corporate made a decision to never deal with that mfg again.

Be careful, very careful as to what happens at lease end. Call and talk with customers that have leased with them before.

Posted 9 Jul 2009 05:44 AM Reply  Report this message
sport05
United States 		FMV leases are calculated utilizing sell price, interest rate, term (number of months the lease term is for) and residual value (the anticipated fair market value for the truck based on the number of hours it is used, the ambient conditions of the application the truck will work in and the age of the truck when the lease is over). Some leasing companies also include the depreciation benefit that they receive as they are the owner of the truck. This depreciation benefit will also cause the monthly paymnet to be lower. Not all leasing companies include this benefit in their calculation. The residual value has a tremendous effect on the paymnet. The higher the residual value, the lower the monthly payment. Just like with cars, certain brands of lift trucks have a higher residual value than others. With cars, Honda, Toyota, BMW etc. have much higher residual values than say a Chevrolet, Chrysler or Hyundai. With lift trucks, Toyota does have one of the highest residual values, especially with their internal combustion trucks. The residual value is higher because more people who buy used forklifts want a Toyota and are willing to pay more for one. (again this is similar to cars as I stated above). The Toyota product has a good reputation for low cost of ownership and reliability. They are not the only one with a good reputation however they are probably the best known because of the quality of their products and name recognition. The overall cost of maintenance will also impact the rate in a lease that includes maintenance. Maintenance rates are calculated utilizing the number of hours the truck is to be used, the severity of the application as well as the term of the agreement. This information allows the provider to calculate the number of labor hours required for breakdown repairs as well as P.M.'s and the parts cost associated with those repairs. A maintenance contract usually includes all "normal" maintenance. What that means is that if the machine breaks down when being used properly and safely and in accordance with the normal operational requirements, the repair is covered. If the machine breaks down or is damaged because of improper or unsafe use the repairs will be billed to you seperately. This type of incident is usually referred to a avoidable damage or abuse. An example of this would be a truck being run into a rack and having hydraulic hoses broken as a result. You should also determine if tires are included and if so how many sets. It is not always a better deal to include tires as you may not need the number of repalcement sets built into the contract and there are generally no refunds. The other item that you need to understand if it is included or not is replacment equipment. If your truck breaks down and cannot be repaired within a reasonable period of time (usually 24 to 48 hours) do you get a free loaner or replacement truck with similar specs to use until yours is fixed.
The advice given by previous posters about reading the contract is important. You also need to ask how many hours of use are included in the contract? Make sure that number is adequate for you application. Average applications use their trucks 1500 hours a year or less. You also need to ask what the overtime rate is if you should go over the alloted number of hours. You should determine if the overtime is based on monthly use versus annual use. Demand it be for annual use or even an even better thing is to have NO overtime billed until the end of the contract IF the total number of hours for the contract is exceeded. Also ask about the return provisions. Ask for a written discription of the expected condition of the truck when the lease is over. Most reputable companies will have no problem providing this. An important part of the return provisions is whether you will have to pay the return freight. Also, where does the truck need to be returned to? The neares dealer or to some othe return point. If it is the dealer, return freight is generally low. If it is to some other point, your return freight costs could be higher depending on where that point is.
With all of that in mind, it is very poassible for one company to have a significanly lower (or higher) cost than another company. All of the above can drive a rate down (or up). SOme manufacturers also offer subsidized lease rates through their dealers. These low rates can be as low as 0% and can drive a monthly payment down. This is similar to what car manufacturers do with their low lease rates. The manufacturer is actually buying the lease rate down through a subsidy.
Having said all of that, the best thing is to deal with a reputable company that has a good name and a good reputation for providing good quality equipment, fair business practices and excellent customer service. Ask for refernces and call them
I hope that helps!

Posted 9 Jul 2009 11:59 PM Reply  Report this message
allan_m
Washington, United States

 		lease is a lease is a lease! it only will work if you follow the terms of the lease Toyta is the #1 rated forklift it has the lowest dollar cost per hour to run. so the maint #'S for the lease will be lower (less parts and service needed) the only way you can get hurt is on the OVERTIME HOURS. Your are giving X amount og hours to run the unit in a year they will charge you for the hours that you run over that.
If it is a Toyota the lease is from TFS ( toyota Finaincal services)
they are great to work with. But are strict on overtime hours.
if it a residual lease the residual may be more than you current provider and that will cost you more if you purchase at the end of your term. Also Toyota is Very good about multi truck dicounts and they hold the dealership to a minium G.P. % this keep the lease #'s Very low.
I have Toyota's with 15000. hour in a 2 shift operation and the dollar cost per hour is $1.45
good luck

-------------------------
phat al = amixon@midcoforklift.com

Posted 10 Jul 2009 02:58 AM Reply  Report this message
johnr_j
Georgia, United States 		SPORT 01
Totally agree with you assesment of the FMV lease.  But the biggest issue  s the "full-maintenance agreement" portion which is typically a a seaprate agreemetn between th customer & dealer.  Of course, both can be rolled into a single monthly.  But the biggest issue is "what is abuse" and "how many operating hours/year is the maintenace portion based on" - this has nothing to do with the number of annual hours the leasing company bases the residual on.  To be ridiculous, the standard monthly maintenance portion can be based on 50 hours per month (= low monthly payment proposal) and everything after that is charged at an over time rate (much higher operating expense cost). As I cited in an earlier reply, I have seen a customer invoiced for a power steering cylinder seal replacement (no nicking of the rod) under abuse on a Toyota FMV w/full maintenance.  

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"Have An Exceptional Day!"

Posted 10 Jul 2009 03:27 AM Reply  Report this message
Yotaguy
Kentucky, United States 		If a customer was invoiced for a power steering cylinder seal replacement it could have been by debris on the floor, improper housekeeping, etc...  no dealer is going to absorb cost due to customer issues.  Also, any bill backs to customers regarding maintenance are done by the local dealer, not TOYOTA.

If you are concerned ask your local Toyota rep to bring in the Toyota Financial Services area rep to talk with you about the lease.  There are no hidden loopholes or agendas and it's entirely possible that the local dealer is guaranteeing the residual.  Meaning that they will buy the trucks from TFS when the lease is over and they are essentially buying down the payment.  This makes them much more difficult to be profitable when selling as used, but can definitely assist in getting a new truck deal.

As others have said, TMHU is running some great incentives and limiting the dealer to a set GP%.  Toyota is putting a lot of pressure on dealers to perform and get market share (as are all Manufacturers) and I'm seeing pricing comparable to what we sold 4-5 years ago.

Good luck!  Toyota is #1 for a reason and they have built a very comprehensive and reputable dealer network.

Posted 10 Jul 2009 03:38 AM Reply  Report this message
Youngster
Bucks, United Kingdom 		OPTSGUY - Why don't you ask your friendly Toyota Sales Guy to give you an annual break-clause.  So in effect you will at worst have a tear long contract.  If you feel they are 'tucking you up' you can get out and spend your money elsewhere.

Good luck

Posted 11 Jul 2009 06:37 AM Reply  Report this message
beast411
Minnesota, United States

 		i would say you cant put a price on trust with your current provider.  I would you might want to look at service contract with more allowment for hours.

Posted 14 Jul 2009 01:34 PM Reply  Report this message
Msliftyloader
England, United Kingdom

 		"Sales people no matter where they are from have at least a little bit of this tendecy in them - "lie at little, cheat a little but always be sincere about it"
6.)  Or as the fleet manager for a very large plywood company told me once "If a sales person says it to him - he believes 0%  of what was said and if he puts it in writing  he would only believe 50% of it."  His name was J.D. Mills.

Thats not a nice thing to say about sales people is it Johnr_J? why would you want to tar all sales people with the same brush? dont you think their is good and bad in all trades? its not like you dont ever hear complaints about ops deparments or techs is it? I have to agree that most engineers are painfuly honest with customers, its just that when it comes to booking overtime etc that "accidents" can occur.

Dont mean to be nasty but JD Mills is a tiny bit ignorent and arogant to make such statements of legendary wisdom dont you think?
Posted 18 Jul 2009 04:17 PM Reply  Report this message
edward_t
South Carolina, United States

 		I am pretty sure John can speak up for his self, but the OPs question sounded to me like "if it sounds too good to be true, is it too good to be true" and even the US federal Govco says "if it sounds too good to be true, it probably is".  That statement is truly "legendary wisdom" or do you disagree?
(and don't you wish there as an html tag for sarcasm)

Saying "I don't mean to be nasty", yet using such obviously pejorative terms as "ignorant and arogent (I think you spelling should have been 'arrogant') " seems to me to directly counter your prior remarks. What it seems to me that MsLiftyloader really meant was "while I don't like to consider myself as nasty, I am going to be". That is sort of as if I had prefaced this paragraph with "with all due respect" yet I am not showing 'due respect', I am telling truth -as I see it-, (in my own opinion), and respect does not fit into the picture at all. It seems kind of a; "lie at little, cheat a little but always be sincere about it" statement on Msliftloaders part.
Is Msliftloader in sales? ;-)
I noticed this particular thread has raised the ire of a number of sales people and other Toyota fans, but to me, it seems like their responses are almost all like little children that are trying to avoid getting found out for their own deceits, while not admitting to the deceit.

I do have to agree that it's not fair to "paint EVERYONE with the same brush", but in the same breath, I have to note that pointing out someone else having made a mistake never should release you from acknowledgment of your mistake, so the discussion of Group D and/or Group E's [such as techs, or ops personal] 'accidents' (as MSliftloader calls them), should never be thoughtfully considered in a discussion of impropriety by (insert any employment category here, such as salespersons, in this instance) Group A, and to attempt to obfuscate the Group A's actions with such a canard should be instantly dismissed as disingenuous, and to me, also then raises the need to question every other remark for it's accuracy and motivations.
I would also like to note that my reading of John's statement attributed to J.D. Mills were a repeating of J.D. Mills own opinions, and were obviously opinion, not factual reporting of an incident, and any attempt to color them otherwise should also be rejected.
  your mileage may vary

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webhome = http://forktechs.com
"it's not rocket surgery"

Modified 19 Jul 2009 00:27 AM
by poster. 		Reply  Report this message
johnr_j
Georgia, United States 		MisLiftloader,

1.  I learned a lot from JD Mills and totally respected his comments.  In summary - what he said to me make certain what you say to him or any one is exactly what you are will to put down on paper and when it is on paper, he and I do look for the hidden peas (a.k.a. shell game) in agreemetns, contract etc.

By the way JD & I became friends adn I sold his company lift trucks..

2. With regard to your comments on my statement. " ........ but be sincere.” being sales and marketing for over 4 decades I will admit I have touched on these virtues at times by not tell the whole truth.  Like saying this used unit I'm proposing was on 5-year lease w/full maintenance - but neglected to offer to say it was in a "pickle foundry."  When a customer would beat me down on the price of equipment - then tell me he wanted to finance it on a (finance to won" payment program.  I would inflate the monthly payment by a few dollars and get my original sales price back.   See both of these are a whole like the "lie a little and cheat a little” I’m not talking about doing a Bernie Madolf (SIC) program.
It is common for dealers to replace the hourmeter on used trucks to were it reads 00000.0 and say by doing so it is easier to keep track of usage in the customers application.  How difficult is it to subtract two numbers (hour meter reading at time of delivery from some time in the future)?
And if one would asked for a show of hands by other folks in sales that have done something similar and to answer honestly (face down on desk and raise hand program) I  bet you would see a lot of hands raised.

Have A Nice Day!


-------------------------
"Have An Exceptional Day!"

Posted 19 Jul 2009 03:21 AM Reply  Report this message
chublil
California, United States

 		Dont do it dude, you will regret it about a year into it and these companies train their techs to call everything customer damage. It sounds good because the salesman pitching it will make bushels of money off you in the long run. For a sales man its a steady paycheck over the coures of your lease. Buy them outright and maintain themyourself with a competent tech.

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Fix it right!!!

Posted 28 Jul 2009 01:48 PM Reply  Report this message
Forkliftt
Louisiana, United States

 		Great topic.
Something not mentioned is the application and the distance from the servicing dealer. If Toyota is nearby- it lowers their cost for maintenance and repairs. This whole process starts with an application survey-hours, dust, operator training, cracks in the concrete, width and height of doorways, etc. Toyota looks at this and guarantees the residual(at least they did when I sold Toyotas). If the survey is honest then there should be no trouble when returning the machines.
Next, a tax lease (residual) price is determined. The dealer can opt to raise the residual - but they would be responsible for the additional cost at trade in time. The higher the residual, the lower the financed amount of course. You are only financing the difference between the sales price of the truck and the residual value of it at the end of the lease. Toyota always had great rates, so you have a low rate to finance with, and a truck that holds it's value well. These add up to a low lease rate. Two quick notes. You can package a purchase of the machine with a full maintenance lease. Makes a higher note, but you own it at the end. And my personal favorite for a mom and pop- very low hour use machine. Purchase with a residual lease without the full maintenance. Customer gets a new dependable machine, pays for 2 PMs  per year, turns it in in 60 months. On this deal I would build in an EPTW so you get no surprises. OK, I digress...

Now, you have your price for the truck and usually the product support rep will work up the price for the full maintenance. Again, I suggest you roll the EPTW onto the cost of the truck, which gives the service department very little risk during the course of the lease. Other than abuse, very few non warranty repairs will be needed the first 2-3 years. Dealership pockets much cas$ if handled correctly. The last years will require more repairs, but again if managed well this is minimized. Keep tilt cyl kits, tune up parts, etc stocked for those trucks in the van.
Now, add the two prices together and you have a full maintenance      
Price.
One of the dealership advantages is the ability to increase the profit margin a LOT by raising the note only a little on a residual lease. The other advantage is first access to lease returns that are  well maintained. My finger is tired. Think I'll go home now.
Steve

Posted 29 Jul 2009 04:40 AM Reply  Report this message
Howard_G
Ontario, Canada 		I am a Toyota rep in Ottawa Canada. Ask your reps to separate the lease portion from the maintenance portion and then compare numbers. Also be honest with the rep and tell him the severity of your application including ramps. ambient temperatures etc. Most companies will give you their best numbers if they are trying to win business. Tell the Toyota rep that there is a big price difference and perhaps he has missed something. We have lost a lot of deals to competition based on price to learn later that the customer didn't disclose a 100 foot ramp that is part of their production process.
Lease rates from Toyota are usually at a lower interest rate than most of the competition since Toyota usually subvents the rate. Maintenance rates are usually calculated based on the anticipated annual hourly usage, severity of the application and the distance the primary tech has to travel to the site. We have people that track the costs of similar applications with similar trucks to get a suitable rate. Sometimes we get it wrong and we lose. Sometimes we get it wrong and win but usually it averages out that the costs match the maintenance with a reasonable profit.
Another thing to ask your rep is if you are allowed to "pool" the hours. This would reduce the likelyhood of overtime charges if one truck is used more thanthe others as long as the total hours are within the alotted amount.
Normal wear and tear is expected. We always anticipate new paint, new tires, new seat, full cleanup and full service will be the norm.
As for damages to equipment when they are returned. The way we handle it is to handle all customer damage repairs on an ongoing basis and advise the supervisors of the damages at the time they occur. This also allows the customer to address these issues with their staff to prevent damage due to misuse.
It would be negligent of the dealer to allow damage to accumulate and then hit the customer at the end with all sorts of damage claims.
The end value of a lease is always calculated based on a residual value that takes into consideration the anticipated hours and the severity of the application. If the dealer sets the residual too high they may win the order but lose at the end.
Switching to a Toyota fleet would definitely be a good thing both in safety and productivity. Toyota products are usually the lowest to maintain and the techs are all factory trained. Toyota is #1 for a reason.....

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The distain for poor quality quickly extinguishes the short lived joy of low price.

Modified 31 Jul 2009 00:12 AM
by poster. 		Reply  Report this message
Iceman
Connecticut, United States

 		OPTSGUY,

Toyota finance has a nasty habit of hanging large penalties over the heads of the customers at the end of a lease. 20-40 truck accounts can see as much as a $150,000 in overtime and damage. this is done to lock you in to the Toyota way. Toyota has forgiven the penalty for resigning with them on the next round. Yes! Black Mail! A real evaluation of your hour usage per machine is very important to your company. No surprises! Ask the Toyota Dealer to agragate both maintennance and finance hours on all like equipment. Make sure your allotted hours on your leases match the real time usage for your fleet. Protect your self!! I have seen the situaton described above more time than I can count!!!!!

Posted 7 Aug 2009 00:44 AM Reply  Report this message
coopdog6
North Carolina, United States 		my experience with Toyota has been thier lease with maint is really an enhanced PM program

-------------------------
Coopdog

Posted 18 Sep 2009 07:07 AM Reply  Report this message
edward_t
South Carolina, United States

 		I dislike blaming a particular brand for the actions of some of their dealer's employees, [even if it does seem to be something with the red paint ;-) ].
I have had a red painted forklift sales person do something else "interesting" in that they went over the head of the normal decision maker, to attempt to make the point that "surely the 'decision maker' must be getting something under the table" from the company they felt had done a great job for them.
You have got to watch your back so that you don't get thrown under the bus.

-------------------------
webhome = http://forktechs.com
"it's not rocket surgery"

Posted 18 Sep 2009 08:21 AM Reply  Report this message
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