consequential

Hi all,

I just joined the ACofNA so I can utilize the 6% off MSRP (come 6 months from now) and would be looking at getting a 2018 S4 with the following:

-Prestige
-Carbon Atlas inlays
-19" wheels
-Cold weather
-Warm weather
-Sport
-Driver assistance
-Dynamic steering
-Nappa
-Rear airbags

--> Looks like the total MSRP would be $66,175 @ 6% off = $62,205

Can some of you please let me know what types of lease payments (plus lease length) you've signed up for including down payments? I'm trying to get a good idea as to what I'll be looking at.

Also, do any of you have any concerns about any of the options I've selected as in, are any a bad idea?

I used to own a 2004 A6 (in 2009-2010) and had tons of issues with it, I had bought it 50k and put 50K on it before selling it. I'm hoping the quality has improved over the years.

Thanks all!

consequential

Also, what is Audi telling you the residual value will be after 36 or 48 months?

Talbot

I can't figure out if you can really get Nappa with the warm weather package. I suspect there is a flaw in the online builder. Unless you delete the perforated seats... but then what's the point of warm weather? And both packages include the leatherette armrests and console. Maybe I'm missing something.

markcincinnati

Lease deals on Prestige cars are unattractive, generally speaking. The Prestige configurations have a relatively poor residual is the reason.

Putting any money down on a lease is somewhat like taking a pile of bills and burning them, if you MUST give money to someone or some entity, let me know, I'll give you my routing number and account number -- send it to me.

It would be better if you want to take money from your account and put it in someone else's account to "invest" your money in multiple security deposits. At least this way, you'll get your money back at the end of the lease.

Here is how this works -- take money from your account to the Audi dealer (once you know what the security deposit is). If the security deposit is $500 or $750 you can typically put 9 security deposits down on the car.

Give your money to the Audi dealer finance person.

In exchange, your lease "money factor" will be reduced -- this reduction will translate into a lower monthly payment. When the lease is over, the security deposits (plural) will be returned to you.

In any case, putting money down (a so called cap cost reduction) doesn't really do you much good -- if you actually have $6,000 you can put down on a lease, this means you could make a $100 per month withdrawal from your account, 60 times. So, if your lease payment is $799/mo, you can pay $699 per month from current funds and $100 from "held" funds. Giving Audi $6000 in one lump on a closed end lease is neither frugal nor wise.

I'm not suggesting a 60 month lease, exactly, I just used the figures as an easy to perform calculation as an example. I don't think a lease term longer than 48 months is a good thing -- besides, the payment seems to only drop somewhat after 48 months anyway.

Another thing you CAN try is to lease for 12K miles/yr rather than 15K miles/yr and evaluate your situation after 12 or 24 months -- if you're going to run out of miles, you can prepay MORE miles at a discount then.

If you want the best lease deal, load up as much as possible a Premium Plus version. The problem is, Audi will only put Driver Assistance on the Prestige models.

If you want the best cap cost reduction possible without putting money down out of your pocket, one of the things you can do is ORDER your car. Ordered cars typically can be discounted by the dealer more than a car that has been in inventory, since there will be virtually no "holding" costs on an ordered car since it comes in and is "sold" already (to you), which means the dealer pays the lowest possible "floorplan" or "carrying" costs.

Of course, if you order an Exclusive car in Purple Pearl with white leather seats, you should know the dealer will be obliged to tell you the car may have an even lower residual (or words to that effect) since the car will be, um, shall we say, "less attractive" on the "previously owned" circuit 36 months from now.

I'm with you, in wanting a Prestige version -- and I'm debating buying vs leasing this time (never bought one before out of some several dozen Audi's, so I'm a little "scared" of the process of owning having always been a renter).

In any case, I'm beggin' you, don't put any money down on a leased car, unless it is for the multiple security deposits.

consequential

Hi markcincinnati,

I can't thank you enough for taking the time to write just a detailed and helpful reply here. It truly means a lot to me and I so appreciate it.

I've leased a few cars in the past but never really thought about the money down aspect and you shed a lot of light on this to the point where I will do all I can to avoid it and instead go with the multiple security deposit route.

My thinking is, if I'm going to get an Audi (one of my dream brands) I'm going to get the Prestige so there's no room there for me however, with the information you provided I'll be a bit more prepared.

I'm guessing the 6% off I'll get is probably going to be the max off I'll receive so I guess my expectations are set on that.

I wouldn't have an issue purchasing except I just don't want to put too much money down and would need to in that case in order to keep the payments down. I really can't imagine having to pay more than 850-950 a month for 36 months for lease (or 60 months for purchase).

What are you thinking your payments would be? What seems reasonable to you for a model like this?

Again, thank you very very much!

consequential

Hi Talbot,

I think you're right and see the configurator using my cell phone doesn't allow for both the warm weather package and nappa seats.

markcincinnati

At this point, I have no clue what to expect the monthly lease payments to be. If you are even considering a buy -- you could take your 6% discount plus a down payment of up to 10% and amortize it over a 72 month period (I'd use no less than 2.75% APR) and see where that gets you. Remember the thing is, the calculations (for the lease) are dynamic -- they change regularly. Also be aware that there are "deals" that do present themselves from time to time.

The bad news is these "deals" rarely impact the "S" cars -- supply and demand. You can always "offer" the Cap Cost # yourself. By that I mean, you could propose 8 or 9% off (the worst that will happen is you will get 6%).

Cash doesn't affect anything as far as I know since the dealer will get paid by you, the bank or Audi Financial -- writing them a check may actually be less attractive to them, since the dealer may get a "fee" from the bank or leasing organization for bringing the business to them. When you pay them out of your pocket, they lose whatever possibility for additional revenue that they might have been entitled to had you financed.

Buying a car in one lump sum is -- increasingly -- not necessarily the best use of funds.

Leasing has its detractors, to be sure, but there remains a school of thought that it is better to lease that which depreciates and buy that which appreciates.

Most folks live in apartments and buy cars.

Like everything else -- there are sound money reasons for both (or all) approaches.

If you drive a lot of miles -- leasing is hard to make work. If you move around a lot, buying a house doesn't make a lot of sense since it can take some time to sell a house unless you discount it.

So, like everything, and I do mean everything -- the things I say and the things you read here on AW are "data points" that may have merit sometime, all the time or never -- based on your circumstances.

Currently I am in month 43 of a 42 month lease on a 2014 S4. I also have 3 more payments left on my mortgage. My situation and yours are likely entirely different, that is.

Information is your best friend.

JSING

Damn dude you're really dropping some knowledge in here. I think I'll be leasing an A/S/Q 5 in the late summer fall, thanks for all the info

"Most folks live in apartments and buy cars." That they do...and that's not wise

JSING

In your example are you saying it's better to keep the $6000 in the bank, incur interest on it and use it towards the payments monthly rather than giving it all to Audi at the beginning to get a lower payment?

markcincinnati

Essentially yes.

If you have $6000 that you could "give" to Audi, note that is exactly what you are doing -- you are subventing the lease yourself. This is not needed -- from you, at least. If you keep the money in the bank, or where ever, and you have a 60 month deal, you have, essentially, 60 payments of $100 already in the bank.

You gain nothing by buying down your cap cost when you are entering into a closed end lease.

You are renting the car -- the thing is, if you want to buy the car at the end of the lease, it makes NO difference if you have made a huge cap cost reduction or zero cap cost reduction. If the "sale price" of the car at the end of the lease is $30K, it will be $30K if you put down $6000 or $0.

I know the psychology of a lower lease payment is, for a nano second, attractive -- but with the cost of money today, that nano second may actually be one-half nano second.

The primary thing the down payment does is allow the TV ad's to tell you that a new A4 can be had for $399 per month (with $3999 + first month's payment due at lease inception.) It makes for good ad copy, that's all.

A more forthcoming way to advertise would be to just say what the "real" payment is with NO MONEY UPFRONT.

But then, if you're Audi and you do that, Acura or BMW or Mercedes will offer a car for less (per month) with the fine print disclosing the cap cost reduction required to get to that mo pay -- and the cap cost reduction will come from YOU.

So all the car companies "suggest" a low monthly payment in their ads via the use of a fairly large up front payment from you. They all hope that the payment will get you in the door -- the epiphany comes when the initial check you will need to be writing is thousands of dollars -- just to get to that lease payment advertised.

These approaches are NOT lies -- the fine print reveals how that new Mercedes E class can be yours for $599/month. But by the time the fine print comes along, your already "in-love" with the idea of driving that new E class (or Audi A6, or Q5 or whatever) for "only $599 per month."

The ads appeal to your right brain -- your left brain only gets the dose of reality when you meet with the finance guy.

They ALL do it.

Don't put money down on a lease.

Of course, you have free will -- if the psychology of the lower payment "compels" you to put money down on a lease, well, whatever makes you feel good.