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Three-Row Bliss: Lease A Toyota Highlander For $275/Month ($0 Down + MSD)

2016 Toyota Highlander (source:

2016 Toyota Highlander (source:

It's relatively easy getting an amazing deal on a passenger car these days. But an SUV or crossover? Good luck. 

While passenger car sales fell by 2 percent last year, sales of light trucks (including SUVs) soared by 13 percent, leading some analysts to conclude that light trucks will overtake passenger cars in sales. Because of this relentless demand for trucks, deals on a SUV are typically worse than with an equivalently priced sedan.

That said, we've found an anomaly. Thanks to high residual values, even a modest discount on Toyota's eight-passenger Highlander SUV can result in an attractive lease, especially if you choose Multiple Security Deposits (MSD). Here's what you need to know.

Current Lease Program - Valid Through October 31, 2016

The cost of leasing a particular car is determined by its lease program, which is set by the manufacturer, and the selling price, which is set by the dealer. Here is the current lease program for 2016 Highlander through Toyota Financial Services:

2016 Highlander Residual Values
24 Months 36 Months
LE (4-cylinder) 74% 67%
LE FWD 75% 68%
LE Plus FWD 73% 66%
XLE FWD 74% 67%
Limited FWD 71% 64%
Limited Platinum FWD 69% 62%
LE AWD 76% 69%
LE Plus AWD 74% 67%
XLE AWD 75% 68%
Limited AWD 72% 65%
Limited Platinum AWD 70% 63%

These residuals assume 12,000 miles per year. Deduct 2% for 15,000 miles per year. Below is the money factor (MF) for 2016 Highlander assuming excellent credit:

2016 Highlander Money Factor
Region Money Factor
Boston (ME, NH, VT, MA, RI) 0.00142
New York (NY, NJ, CT) 0.00106
Central Atlantic (PA, VA, WV, MD, DE) 0.00142
Cincinnati (MI, OH, KY, TN) 0.00142
Chicago (MN, WI, IL, IN) 0.00104
Kansas City (ND, SD, NE, KS, IA, MO) 0.00142
Gulf States (OK, TX, MS, LA, AR) 0.00142
Portland (AK, WA, OR, ID, MT) 0.00101
Denver (WY, CO, UT, NM, AZ, NV) 0.00142
San Francisco (Northern CA) 0.00142
Los Angeles (Southern CA) 0.00125

Confused about the terminology? Read this.

Selling Price

A 2016 Highlander LE FWD has an MSRP of $32,955. Here in Southern California, the average selling price is approximately 5% off MSRP. We would target a selling price of $30,650 (7% off MSRP), which represents a "very good" price that most internet sales departments in the region should honor. 

Putting It Together

Use the lease calculator below to customize your own inputs, such as MSRP, selling price, and residual. Every dealer sets its own selling price, depending on factors like inventory and demand. Here's a sample deal of a 2016 Highlander LE FWD in Southern California assuming 7% off MSRP, excellent credit, and 12,000 miles per year.

% off MSRP
I want to pay my acquisition fee upfront.
Residual (%) at miles/yr
APR: %
Enroll in Mercedes-Benz Autopay to lower the MF by 0.00010
GM One-pay Lease: I want to lower the MF by 0.00073 by paying everything upfront.
GM Acquisition Waiver: waive the acquisition fee by raising the MF by 0.00055.
APR: %
Tax is levied on the monthly lease payment (most states).
Tax is levied on the sales price upfront (e.g. VA, TX, GA).
Tax is levied on the total lease payment upfront (e.g. NY, MN, OH).
First month's payment incl. tax:
Total one-pay lease payment:
Down payment:
Total MSD payment:
Registration and doc fee:
Tax on cap cost reduction and fees:
Acquisition fee:
Tax on the total lease payment:
Tax on the sales price: