mpm

Background: '00 S4 silver/onyx all options except phone $42,500, plus $2600 in MA taxes.

Situation: Can't buy it outright, but willing to put $15,000 into the car.

Goal: (other then to start driving this car, which I've only been thinking about since I first saw reports from Europe 2 years ago, but that's something most of have been suffering over...)is a low monthly (ideally less then $500/month), 4 years or less in payments, and ownership (or the option of owning at the end of the term)

Finance Options (as I understand them):
1. Home equity loan
Pro's - interest is deductable, rates are good
Con's - higher monthly payment
? - been in this house less then 2 years, can I get one?

2. Lease
Pro's - lower monthy?
Con's - milage, often heard secuity deposit issues
? - does it make sence to put money into a lease?

3. Premimum Purchase Plan
Pro's - sounds like a lease, options at end, baloon feature
Con's - higher interest rate
? - what's the catch?

Jon Shafer and boxster seem to have this wired, but if anyone has feedback or shed some light on this,it would be greatly appreciated.

Adam T

I don't know about the other financing options, but I know a little about home equity.

When you bought your house, how much of a down payment did you invest. If you put down the minimum percent down payment (3% - 7%) then you do not have that much equity built up. The majority of your house payments for the first five years is mostly interest paid to the lender.

So unless you paid a large down payment on your house, a home equity loan is probably not the best answer.

Hope this helps,

Adam T

mpm

20%, and rising home values, plus a lot of restoration, will that help?

LCP

I got a 60-month loan from carfinance.com (Bank of America) at 7.34% (about the best bank rate available -- not through a credit union, etc.) for $38,000; my payments will be $758; if you borrowed $30,100 your payments would be $600 and you would own the car outright after 5 years (at the end of 4 yours, you would only owe $6,931 -- much less than you would owe on any lease or ballon purchase program).

mpm

Thanks, I'll check it out...

boxster

Financing is certainly out because at 7.5% interest, you can only finance about $25000 over 60 months to have $500 payments.

The payment for leasing vs. the premier plan should be nearly identical. Your options at the end of the term are also similar.

The biggest difference between the two is that you have to pay sales tax up-front on the full purchase price in most states on the premier plan since you're buying the car. With leases, most states include sales tax only on the monthly payments (and any down payment). If you're not absolutely positive you're going to buy the car at the end of the term, go with the lease. Then, you save the difference in sales tax (which will be substantial.)

At $42,500, you'll probably need to put down somewhere in the neighborhood of $7000 to get payments around $500 a month. It may be less as S4 residuals are now higher. I based this on a $42,500 A6 (48-month, 15K miles/yr) on Audi's web site.

A home-equity loan shouldn't be much of a problem. Most banks will offer their best rates on loans that are for 90%-100% of the appraised value of the home. Since you put 20% down, you should be able to get a loan for at least 10% of the value of your home. The great thing about home-equity loans is that the interest is deductible, as you noted.

I've leased my last six cars and haven't had any security deposit or excess wear-and-tear problems. So, I wouldn't count that as a con against leasing unless you know your local dealer can be problematic in these areas.

Feel free to e-mail me with any follow-up questions!