Buy or lease?
#31
AudiWorld Super User
At least in MA, if you are buying the car at lease end, since you already paid sales tax each month on the lease payments, you only pay the tax on the lease buy out price, not on the full original price the lease was calculated on.
#32
It raises a point though. As a result of my two accidents I have been told my trade (and a dealer's resell price) can be expected to be a lot lower than had the car had no accidents. Let's say the dealer's statement to me that it will be worth $8K to $10K less is overly pessimistic and really it would be worth $5K less. I still would (I am assuming) have to pay the buyout price in the lease contract, no? I think it would be crazy to buy a car I know is worth $24K for $30K, so I doubt I will even consider buying the current car (for other reasons as well).
#33
AudiWorld Super User
I believe that is true in NYS as well. I was referring to buying another (new) Audi or some other brand, not buying my present car.
It raises a point though. As a result of my two accidents I have been told my trade (and a dealer's resell price) can be expected to be a lot lower than had the car had no accidents. Let's say the dealer's statement to me that it will be worth $8K to $10K less is overly pessimistic and really it would be worth $5K less. I still would (I am assuming) have to pay the buyout price in the lease contract, no? I think it would be crazy to buy a car I know is worth $24K for $30K, so I doubt I will even consider buying the current car (for other reasons as well).
It raises a point though. As a result of my two accidents I have been told my trade (and a dealer's resell price) can be expected to be a lot lower than had the car had no accidents. Let's say the dealer's statement to me that it will be worth $8K to $10K less is overly pessimistic and really it would be worth $5K less. I still would (I am assuming) have to pay the buyout price in the lease contract, no? I think it would be crazy to buy a car I know is worth $24K for $30K, so I doubt I will even consider buying the current car (for other reasons as well).
Avoiding diminished value is one of the advantages of leasing vs. buying. Since I purchased my current A6, I will be facing the same diminished value issue with my current A6 so I'm considering doing a lease vs. purchase for my next Audi for that very reason.
#34
Probably true, the buyout price wouldn't change. I know a few years ago I was able to negotiate with a leasing company for a better buy out price (not Audi) but doubtful that would be true today. But in the case of an accident reducing value, even in the unlikely event you could get a better buy out price, you would be kicking the can down the road as the accident would still follow you.
Avoiding diminished value is one of the advantages of leasing vs. buying. Since I purchased my current A6, I will be facing the same diminished value issue with my current A6 so I'm considering doing a lease vs. purchase for my next Audi for that very reason.
Avoiding diminished value is one of the advantages of leasing vs. buying. Since I purchased my current A6, I will be facing the same diminished value issue with my current A6 so I'm considering doing a lease vs. purchase for my next Audi for that very reason.
FWIW - the car does look great and as long as the paint matches (which it appears it does) you will forget about the accident when you look at the car every day. I never think of my car as damaged goods when I go into the garage - it is still my baby! lol
#35
AudiWorld Super User
Bob, I agree. Your accident with Bambi was much more involved than mine which was solely cosmetic. An issue is that *#%& CarFax simply reports an accident without details IIRC. On the other hand, I have a good, 12 year, 2 new car purchase, 4 car maintenance relationship with my Audi dealer who also happens to be a sister company to the collision center where my car was repaired. So, they can easily see the details come trade time which could minimize the hit.
I plan on keeping the car at least until the second year of the C8 which I'm guessing will be in two years, three at the most. My next one will probably be a lease, something I haven't done in many years (I hate car payments). I could also sell my car privately and get more money than a trade. Done that too. Private sale buyers don't always check CarFax although my nature would compel me to tell them about the repairs iin any case.
I am pleased with the bodywork and paint job. I'n very picky though so we'll see as I continue to walk around the car a few dozen more times.
I plan on keeping the car at least until the second year of the C8 which I'm guessing will be in two years, three at the most. My next one will probably be a lease, something I haven't done in many years (I hate car payments). I could also sell my car privately and get more money than a trade. Done that too. Private sale buyers don't always check CarFax although my nature would compel me to tell them about the repairs iin any case.
I am pleased with the bodywork and paint job. I'n very picky though so we'll see as I continue to walk around the car a few dozen more times.
#36
AudiWorld Super User
Question for you lease guys. Say I decide to trade my A6 in 2 years and let's guess it's worth $25K then and lease a new one. How would that work? Would the dealer hand me a check for $25K less any lease fees? I wouldn't want to apply the amount to a cap cost reduction (not a good idea). If I sell my A6 privately it's easy but not sure what happens if I trade it in.
#37
Question for you lease guys. Say I decide to trade my A6 in 2 years and let's guess it's worth $25K then and lease a new one. How would that work? Would the dealer hand me a check for $25K less any lease fees? I wouldn't want to apply the amount to a cap cost reduction (not a good idea). If I sell my A6 privately it's easy but not sure what happens if I trade it in.
#38
Hey Snagitseven, in your example I think the following would happen:
If you're trading-in the car, you could apply the trade-in value to the cap cost as a cap cost reduction. That's effectively just a pre-payment of some of your lease obligation.
You still have to pay the use tax on the pre-payment (just like if you were paying it with each monthly payment), but what you save is the interest you would have paid had you paid that money monthly instead of as a cap cost reduction at lease inception. Interest (determined by money factor) is the charge you pay over time (and time=0 if you're paying up front).
Does that help?
The question probably comes down to how you want to use the trade-in value: Back into your pocket or immediately applied to the lease at inception.
If you're trading-in the car, you could apply the trade-in value to the cap cost as a cap cost reduction. That's effectively just a pre-payment of some of your lease obligation.
You still have to pay the use tax on the pre-payment (just like if you were paying it with each monthly payment), but what you save is the interest you would have paid had you paid that money monthly instead of as a cap cost reduction at lease inception. Interest (determined by money factor) is the charge you pay over time (and time=0 if you're paying up front).
Does that help?
The question probably comes down to how you want to use the trade-in value: Back into your pocket or immediately applied to the lease at inception.
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