Here’s the latest reader question, along with my reply!
Greg writes: My lease for a 2019 Tacoma TRD Pro runs out in February. I was going to buy it out because of the value of the vehicle in today’s used car market. The dealer called me this week and said they just got the one vehicle I told them I would trade the truck in for, a 2020 Land Cruiser Heritage edition. They offered me $45,500 for the Tacoma and $92,900 for the Land Cruiser. The land cruiser has 22,000 miles on it and in really good condition. I’m guessing both vehicles will continue to hold value pretty well over the next few years with inflation and chip shortages. Is this a good deal? If I’m trading in a car from a lease (I have to pay off about $34,000), does that mean only about 11k goes towards the purchase of the new vehicle? Thank you for always being candid and prompt in your responses.
My reply: The sticker price for the ’20 Land Cruiser Heritage Edition when new was $87,545 – so the quoted asking price of $92,900 for one of those almost two years old and with 22,000 miles on it is pretty haltingly exorbitant. But it’s not surprising to me, given the way the value of used vehicles – especially SUVs and pick-ups – has inflated over the past year or so.
My humble little ’02 Nissan Frontier pick-up, for instance, would cost me about $8,000 to replace today, if I could find one. I paid $7,500 for this truck twelve years ago!
The reasons why are manifold but chiefly – I think – because awareness is dawning that everything new is both over-teched and over-priced as well as far more disposable. Both the vehicles you reference – and my truck, too – are vehicles that can and likely will last for another 15-20 years and perhaps get us through this mess.
As regards your dilemma:
Your lease contract should have a stated residual value/buyout amount listed. This is what you would have to pay to own the vehicle once the lease period has expired. This is usually established at the time of lease inception – which is a damned good thing, in your case, if you decide you want to buy the Taco, because the stated buyout value is likely far lower than the current market value of the Taco.
Assuming it is – and the way to know is to compare what the buyout sum is vs. the current retail value of a ’19 Taco with the miles/options and so on this one has (see NADA and Kelley used vehicle pricing guides). My bet is it would be a better deal for you to buy the Taco – unless the dealer discounts the price of the Land Cruiser sufficiently to compensate for the money you are likely to lose if you give up/trade them the Taco for whatever the stated residual value/buyout amount is per your lease contract.
It’s generally sound to consider one transaction at a time, so as to avoid the ol’ bait and switch.
Given the crazy market for used pick-ups/SUVs right now, I think you are in the catbird seat with the Taco you’ve got . . . and are likely be in the hot seat, if you try to buy the Land Cruiser, right now.
. . .
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As a former 200 Series Land Cruiser owner, I can tell you a couple of things about them. First, they are easily the most reliable vehicle Toyota has sold recently in the United States. They are one of the few that are (were) manufactured in Toyota’s flagship plant in Japan, the plant with the best reputation for quality and reliability and far better than any Toyota plant in the US. The 5.7L V8 in them is legendary for its reliability, and is the same one that is in the last generation Toyota Tundra, of which several famously have made it to 1 million miles with only regular maintenance. The frame is a ruggedized Tundra frame made tougher and shorter than the pickup, and most of the technology in it is a generation or two old. Toyota is slow to adopt new technology, waiting for others to improve it and work out the bugs before adopting and perfecting it themselves.
On the other hand, the Land Cruiser is rarer than hens teeth in the real world. You see a lot of them on the road because they last forever. 30 years old and 300k miles is pretty common for them. But the 200 Series, the last generation sold in the US, sold fewer per year than Lamborghini. The Lexus LX version outsold it substantially and was still a slow seller. It truly is way overpriced in terms of actual capabilities. You are paying for reliability, which can be a very good thing.
I found it fairly small on the inside compared to its exterior dimensions. At 6’2” tall, I had to duck significantly when stepping into the driver’s seat (vs. not having to do so for any domestic truck or full size SUV I’ve ever been in). The third row seat was nearly unusable, and since it didn’t fold flat, the cargo area was very small compared to comparable (in size) SUVs. All of this was due to body on frame design, solid rear axle, etc. which takes up a lot of valuable interior space that crossovers and SUVs with independent suspensions don’t have to sacrifice. The trade off is that the Land Cruiser components are rugged and reliable and will work for decades to come whereas that crossover will be ready for the scrapyard in 10 years or less.
Lastly, because the Land Cruiser is so rare, finding replacement parts is extremely difficult. If you crack a windshield or are in a collision with a deer/car/protester, it can take months to get the replacement parts in. And that was pre-pandemic.
I would only suggest the Land Cruiser if you truly need an SUV with horrible gas mileage. In many ways, a 4Runner is a superior choice, at least in the US. I would not purchase a Land Cruiser again, even though I thought it was a fine SUV.
An intangible to factor in here is that Toyota discontinued the Land Cruiser in the United States for this model year.
Globally in 2021 they introduced the replacement 300 series Land Cruiser (a 2020 is a 200 series) but decided not to sell it here presumably for the regular reasons – fuel economy, safety, etc.
Part of the problem is the Cruiser has gone upscale over the decades and to we here in the U.S. view it as a luxury model. But the truck is still the truck you see with United Nations logos on the side and without a diesel you’re lucky to get low double digit MPG. Even the global version, which you can get with cloth seats, a manual and steel wheels, dropped the V8 in favor of a V6. Ironically the gasoline engine they use is the same one you’d find in a 2005-2015 Tacoma or a 2003-current 4Runner.
So a 2020 Heritage Edition has value that is kind of hard to quantify in simple automotive terms of new-vs-used or depreciation. In 10 or 20 years there’s no reason mechanically it won’t still be running (there are after all 50 year old Land Cruisers still running, which the Heritage Edition is homage to). So it’ll always have value, if not just practically but to a collector.
A Tacoma is a good truck, like Eric’s Nissan. They can run a long time, take their fair share of abuse. But the number still around is only relatively high because they build so many of them, the number being counted in the hundreds of thousand annually. There’s no reason in my view for the ridiculous prices they command now (and I own one, a first generation model year 2001). I paid $10k for mine used nearly 10 years ago now and have no doubt I could sell it for significantly more as well.
Comparatively Toyota has imported about 2,000 or so Land Cruisers annually for a long time and of them the majority are still on the road because they are so well built and cherished, particularly by second owners who are happy to let someone eat the initial cost (be it a lease or just a keeping-up-with-the-Jones). The second owner of a Cruiser usually use them like they’re supposed to (4wd, camping, etc) and keep them until the wheels are driven off.
So to sum up, no way I’d pay that much for the Taco however if you can swing the Cruiser, well, they ain’t building more of them and not at all for the U.S. market.
Eric, I’d like to have a new 93 GMC Turbo Diesel crewcab, long bed, one ton, single wheel, 4WD pickup. Reckon there’s any place to get one? I’ll take any seating arrangement since I’ll put air ride seats in the front. Winder Towing Service has a ’62 Corvair station wagon that’s been made into a serious recovery vehicle with an LS engine and 4L60 transmission and 2 transfer cases. It’s the cream of the crop. Ain’t nothin’ the matter with old…….ceptin me.