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Old 06-12-2014, 09:35 AM   #1
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Hello everyone!

I am new to the forums and have been browsing the past few weeks at all the information available. I have always loved Audi from a distance and adore the S4.

Currently, I drive a 2012 IS350AWD which I very much enjoy to drive. However, as everyone else knows, no manual.

So my questions. I'm thinking of leasing a new S4 as the manual fun car. The IS350 is paid off, so I'm keeping it.

Please don't hate, but I have several questions regarding leasing and whether or not it would even be an option for me.

1. Is it best to lease short-term (1 year) vs. long-term (2-3 years)?
2. Is it possible to accurately calculate the monthly payment?
3. What options are available for the lease contract? Do you have any control over what's in it?
4. Can you overpay lease payments? Is the lease agreement essentially "X" amount due by end of contract?
5. How is a lease agreement affected if you move (i.e., different dealer)?
6. Is it possible to calculate the money paid extra (i.e., lost) on the vehicle if purchased at the end of the lease vs. an up-front purchase?
7. What if you exceed annual mileage?
8. Can lease payments be written off?

Forgive me for the long list, but I hope you can all clarify my questions. I'll probably have more, but this is a start, ha.

Thank you!
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Old 06-12-2014, 10:15 AM   #2
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Hi, and welcome aboard! It sounds like you know nothing about leasing which instantly tells me you are not a candidate unless you can take a portion of the payment against business expenses.

Audi leases are expensive at this time.

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Originally Posted by AudiS4SD View Post
1. Is it best to lease short-term (1 year) vs. long-term (2-3 years)?

I suspect they'd write any of those terms, but a 1 or 2 yr will be $$$.

2. Is it possible to accurately calculate the monthly payment?

Yes, there are on-line lease calculators but you would need all the data to fill in the blanks and the dealer typically doesn't volunteer that info.


3. What options are available for the lease contract? Do you have any control over what's in it?


Not really. I suppose you could add bells 'n' whistles that would make it even more expensive.


4. Can you overpay lease payments? Is the lease agreement essentially "X" amount due by end of contract?

Can you overpay? Of course...that's what happens when you don't comprehend the lease contract when it's placed in front of you for your signature.

Yes, these are closed end leases. The residual value is established at the beginning of the contract. The Audi residuals are low, typically below established market value meaning it's an attractive price for purchase at term end.

5. How is a lease agreement affected if you move (i.e., different dealer)?

Not a big deal. Just re-registering the car. It happens all the time. The car/lease is not tied to a dealership.

6. Is it possible to calculate the money paid extra (i.e., lost) on the vehicle if purchased at the end of the lease vs. an up-front purchase?

Of course. I promise you leasing will be substantially more expensive.


7. What if you exceed annual mileage?

There's an established $$/mile overage charge. Maybe $.30/mile on a super-premium car.

8. Can lease payments be written off?

Do you presently write off/depreciate your existing car?
If you think you want to lease, look over at BMW or MBz...much more attractive programs.
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Old 06-12-2014, 10:58 AM   #3
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Quote:
Originally Posted by uberwgn View Post
Hi, and welcome aboard! It sounds like you know nothing about leasing which instantly tells me you are not a candidate unless you can take a portion of the payment against business expenses.

Audi leases are expensive at this time.



If you think you want to lease, look over at BMW or MBz...much more attractive programs.
You are right, But MB won't have a MT car. But let me try to answer some of your questions. I have been leasing for 20 yrs with 4 Audis. \

1) In order to get any kind of decent lease rate , you will need to lease anywhere from 3-3.5 yrs. .When you go to the dealer they can tell you what lease term that will give you the best rate. if money is not a concern, then you can pick your own time frame.

2) You can't really calculate the lease accurately in advance . You would need to know the cost of the vehicle. And like when you buy a car, the cost is negotiable. Lease rate is also based on credit rating.

3) You CAN and Should add Audicare to any lease since it raises the residual by 1% which generally pays for the Audicare. Gap insurance is included. Otherwise its pretty standard. BTW, Audi generally sets the residual low, making the payments higher than comparable BMW, Lexus.

4)You can overpay if you don't negotiate the best price just like when you buy a car. You should not have to pay more than $1000 over invoice and $500 over is not impossible even on a 2015

5) Moving has no effect on the lease

6) Yes, but realize that with Audi S4s , as long as the car is in good shape and under mileage, your car will actually have equity in it at the end of the lease. (unlike BMWs). You will lose this equity if you just give the car back to Audi at lease end. BUT, if you trade in the car on another, or sell the car to CarMax, you can put that equity in your pocket or apply it to your next car. Don't have to trade it in on an Audi/VW product either. Or you can buy the car below wholesale price if you want.

7) If you go over the mileage you will need to pay extra. Not sure if you can buy extra miles at a discounted price before lease end. You can do that with BMW up to 6 months from lease end.

8) Leasing has significant benefits as far as business write offs are concerned, In my experience, I can write off more money leasing than I can if I had purchased the car. I advise you check with your accountant on this issue to be sure.
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Old 06-12-2014, 11:20 AM   #4
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Think of a lease as a fixed dollar amount that you must fulfill by contract end. If you had a $600/month lease payment for 36 months, you would owe them $21,600 for the contracted lease. There would be disposition fees on the back end -- typically $350 or so, but that's fairly negligible.

That said, if you paid $1,200/month you would pay off the lease in 18 months and not have to pay another dime until you turned in the keys at 36 mo. Technically, you could turn in the car with 100 miles, but you would still owe them the contracted amount of $21,600 -- unless special arrangements were made.

The mileage is an important one... I chose to buy because, in theory I would love my car so much I wanted to drive it all the time (which I do). Paying $.35/mi is not something I want to mess with on the back end because it's pretty costly. And, after you start a lease, you can't add miles on. You can pay for more on the onset, which can sometimes save you money, but they still add up. Standard Audi leases come with 10K/yr. If you add in 2K (still under the national average of 15K) you have $2,100 of extra payment to make ($700/yr). Peanut butter that across 3 years and you have $58 more per month. And that's just for 2K miles extra annually.

The other think I don't love about a lease is that you pay for rental fees. You don't simply pay for depreciation -- you pay what's called a money factor too. Typically this adds up to be a nice chunk of change.

In the end, I think you are better off buying the car, and if you find yourself not loving it trade it to the dealer for something you love. You COULD do that with a lease, but it's harder to stay above water since your payments are split into depreciation and rental fees.

Maybe look at CPO low-mileage? That way you let the original owner take the depreciation hit, and you still have a car that has good warranty for a few years for you to love?

Quote:
Originally Posted by AudiS4SD View Post
Hello everyone!
4. Can you overpay lease payments? Is the lease agreement essentially "X" amount due by end of contract?
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Old 06-12-2014, 01:35 PM   #5
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Leasing gives you the best options.

1) You can drive a more expensive car than you would if you were financing the car based on monthly payment.

2) you pay for the use of the car , not the entire price.

3) You may be able to write off a higher amount than financing if you use it for business.

4) At lease end, you can:

a) Give the car back.

b) Buy the car and keep it

c) Buy the car and sell it privately

d) Trade it in on another car if it has equity.( any time before lease end)

5) You can get a new car every 3-4 yrs.

6) If you don't like the car or had problems with it, just give it back

Leasing is not for everyone. But it does have advantages and disadvantages
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Old 06-12-2014, 09:21 PM   #6
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Awesome! Thanks so much for everyone's explanations.

That's what I was afraid of regarding depreciation. I realized leasing was more expensive, but not quite to the extent everyone is alluding to.

I don't understand trading at the end of the lease contract. Say you lease $600/month for 36 months = $21,600. Does this sum now become what you can trade into for a new vehicle at the end of the lease? In essence, is this trading in a paid-off car for a $21,600 trade-in value?

Thanks again.
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Old 06-12-2014, 09:25 PM   #7
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Also, consider me paranoid, but is the CPO check Audi conducts really a thorough check of the vehicle or just slapping on a sticker? I'd be a bit cautious getting a used S4 (especially over 30k) considering I have no idea how the car was treated in that time (I would assume pretty rough).

It was mentioned that BMW/Mercedes have more lucrative leasing options. In what ways are they better than Audi?
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Old 06-13-2014, 06:03 AM   #8
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Quote:
Originally Posted by AudiS4SD View Post
Awesome! Thanks so much for everyone's explanations.

That's what I was afraid of regarding depreciation. I realized leasing was more expensive, but not quite to the extent everyone is alluding to.

I don't understand trading at the end of the lease contract. Say you lease $600/month for 36 months = $21,600. Does this sum now become what you can trade into for a new vehicle at the end of the lease? In essence, is this trading in a paid-off car for a $21,600 trade-in value?

Thanks again.
No, this is what determines the residual value for the end of the lease term. Let's say you buy an S4 for $50k and your 36 month payments total in $21,600 so the remaining amount is $28,400. This will be the rough number what your residual value will look like, of course I did not count in money factor etc. but just to give you an idea.
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Old 06-13-2014, 06:25 AM   #9
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The residual value is determined by the lease company at the beginning of the lease. They might say that after 36 months the residual value = 52% of MSRP. It's fairly straightforward, but, in Audi's case, the residuals are often below FMV at the end of the 36 mo period.

BMW might use a 62% residual for their cars after 36 months, for example.


Simple analysis:
  • low residual = high monthly pmt
  • high residual = low(er) monthly pmt
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Old 06-13-2014, 06:27 AM   #10
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Quote:
Originally Posted by AudiS4SD View Post
It was mentioned that BMW/Mercedes have more lucrative leasing options. In what ways are they better than Audi?

Their lower payments are a result of higher residuals and possibly a more attractive money factor (the interest rate you pay on the residual and monthly depreciation.)

SD, I think if you play around with one of the on-line lease calculators, this will all crystalize nicely for you.
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Old 06-13-2014, 06:27 AM
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