Discussion:
Toyota Leases? Should I be concerned

My company is currently reviewing quotations for our lift truck needs (7-10 units). I am getting quotes on 5 and 6,000 lb L.P cushion tire trucks w/ full maintenance. I am currently using another manufacturer, who I really trust and they've been great. However, during these times we must get competitive quotes. I am confused, the Toyota lease package including maint is about the same price as most others truck only rates. Is this too good to be true? Or the deal of a life time? I hate to part w/ my current vendor because they've been great, but this is a large savings over the term.
  • Posted 27 Jun 2009 10:22
  • Discussion started by OPTSGUY
  • Illinois, United States
Showing items 1 - 15 of 41 results.
i was a tech for 26 years and teach now and i know i am late to this party but as far as leases go if you return a car with damage you pay for repairs. most units when returned are still owned by whoever financed them, are not paid for and must have residual value. however we do not offer fair market leases or rent to own programs as they are too easy for a nefarious sales staff to abuse and forever alienate that customer. customers rember great service not great financing. as ed said about full maintenance, much of what is billed to the customer may be at the service tech's mercy. emotions should not be involved but humans is humans. hard to teach honesty or pride in workmanship.
  • Posted 15 Oct 2009 13:38
  • Reply by rick_c
  • Texas, United States
technology: (no user serviceable parts inside)
Im not sure how things work in the US but my advice is to work closely with your rep weather he be a Cat, Toyota, Hyster or any other dealer and make sure you have spelled out exactly what you expect from the dealer written into your contract. Make sure that things like residuals and customer damage are spelled out exactly and if you dont see something you want or do see something you don't like discuss it with him upfront. All dealers will charge for abuse and dont kid yourself if you think that only one manufacturer will. We are a Toyota dealer but we deal with an outside lease company. The lease company trusts that the equipment will be worth at least what the residual is at the end of the lease. This only makes sense. If the truck is destroyed or needs major damage repairs, the value could be less than the residual. No dealer wants to absorb damage repairs. It has to be spelled out clearly in the contract that damage repairs are to be paid by the customer. Sometimes there are grey areas like is a ripped seat damage. It is if it occurs on a regular basis. We usually allow for replacement of one seat as normal wear and tear. Some customers will go through two seats a year. Definitely not normal wear and tear. Also if you feel something is not damage you should always discuss it with the dealer.
If anyone is interested I can send them a copy of a blind survey done by Plant Magazine that asked questions about the major brands of forklifts. The questions ranged form quality, dealer support, range of products, reliability, safety etc.
Toyota has scored number one in every categoriy for nine consecutive years. That has to tell you that there are a lot of satisfied Toyota owners.
  • Posted 18 Sep 2009 23:04
  • Modified 18 Sep 2009 23:14 by poster
  • Reply by Howard_G
  • Ontario, Canada
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.
  • Posted 18 Sep 2009 08:21
  • Reply by edward_t
  • South Carolina, United States
"it's not rocket surgery"
my experience with Toyota has been thier lease with maint is really an enhanced PM program
  • Posted 18 Sep 2009 07:07
  • Reply by coopdog6
  • North Carolina, United States
Coopdog
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
  • Reply by Iceman
  • Connecticut, United States
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.....
  • Posted 30 Jul 2009 23:20
  • Modified 31 Jul 2009 00:12 by poster
  • Reply by Howard_G
  • Ontario, Canada
The distain for poor quality quickly extinguishes the short lived joy of low price.
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
  • Reply by Forkliftt
  • Louisiana, 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.
  • Posted 28 Jul 2009 13:48
  • Reply by chublil
  • California, United States
Fix it right!!!
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!
  • Posted 19 Jul 2009 03:21
  • Reply by johnr_j
  • Georgia, United States
"Have An Exceptional Day!"
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
  • Posted 19 Jul 2009 00:09
  • Modified 19 Jul 2009 00:27 by poster
  • Reply by edward_t
  • South Carolina, United States
"it's not rocket surgery"
"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 16:17
  • Reply by Msliftyloader
  • England, United Kingdom
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 13:34
  • Reply by beast411
  • Minnesota, United States
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
  • Reply by Youngster
  • Bucks, United Kingdom
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
  • Reply by Yotaguy
  • Kentucky, 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.
  • Posted 10 Jul 2009 03:27
  • Reply by johnr_j
  • Georgia, United States
"Have An Exceptional Day!"

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