Chuck

My warranty is about to expire on my 97 A4, and my car is in the shop to have the turbo replaced (I own this car). I really want a new warranty and new A4. That said, I am considering leasing.

$500 over invoice is the current offering of my dealer on 99 models.

The car i am looking at has a 26,000 invoive price. $400/mth lease = 15,000miles/yr 1,342 down 39 mths. The way I figure this new lease will cost me roughly $5,000/yr. The free loaner, with warranty, is very helpful


Does this seem high, or do we just swallow that annual hit because we like these cars?

Why would my dealer offer a 39 mth lease if the warranty will expire before the end of the term?

My dealer offered me $14,000 for my 1.8t fwd automatic, no quatro, but all other options 37,500 miles. Is there much of a market for used non warrantied audi's out there? Blue book is 18-$21,000.

Thanks for the input.

Roy S.

The way to look at a lease to see if it makes financial sense is to first negotiate the purchase price as you would if you were going to buy it (the lease equivelant is the 'capitalized cost'). If it is an Audi lease, the money factor (.00xxx X 2400 is approx. interest equivelant), and the residual value will be set forth in the program and not subject to negotiation, if it is not an Audi lease, residual value and/or money factor may be negotiating points. Total up all of the monthy payments and your downpayment (capilized cost reduction), compare this figure to buying the car and what you would get for it selling it in 3 years. If the total of the lease payments is less than what you expect to loose in depreciation, then lease it. If not-buy the car. The good thing about a lease is that typically your payment will be much lower, and if the car turns out to be less than a perfect example, turn it in after 3 years and walk away. Now this scenario only works well if you keep your car is resonably good condition, and can keep the annual mileage under 15K/year.

Arch57

I've seen 99.5 2.8QMS for $299 a month at Hoffman in CT. Edmunds web-site also lists current incentives and 2.8's get a $1750 dealer incentive. You didn't mention 1.8T vs. 2.8 but you may be able to get a good deal on a 2.8

Arch57 99.5 2.8QMS (unfortunately not at $299)

DavidG

Before I decided to lease, I made a detailed spreadsheet to precisely compare the relative cost of leasing vs. buying, assuming that in both cases the car is kept for the same amount of time (i.e. leased for 3 yrs. vs. selling the car in 3 yrs.) It also assumes that the lease residual is a good estimate of the selling price.

In order to compare fairly, the spreadsheet takes into account the actual cost in future dollars at the end of the lease/ownership period. It assumes that money not put into a down payment or lease/loan payment is invested in a bank/investment account earning a specifiable amount of annual return (you have to make your own estimate of this). Thus, the opportunity cost of not having free cash around to earn money is included.

In my case, I found that lease and loan had similar final costs and could switch places in cost depending on the exact financial terms of the particular deal. Because of this, and because of the additional flexibility and cash flow I gained by having extra money in my mutual funds rather than stuck in equity in the vehicle, I chose to lease.

The disadvantage is that it's more difficult to get rid of the car (although, if the resale values continue to follow current trends, I could actually buy out the lease and sell the car for very little loss, according to the terms listed on the back of the lease). Also, I have a mileage limit and am less likely to want to invest in modifications that I cannot easily remove and transfer to another car later (I'm limited to ECU chip, wheels, stereo, etc.)

I can make my spreadsheet available to you if you want. Just email me. Not sure how much time I can spend documenting it, but hopefully it's sufficiently self-explanatory.

RossH

The residual value will be terrible on a '99 and much better on an '00. You will essentially have to pay for all of the depreciation of the 1999 model year without actually having the car in your hands.

I would checkout the sort of deal you can get on a 2000 model before proceeding with a purchase.

$500 over MSRP will probably not make up for the difference in residual value.

Good luck!

prophete

please send me your spreadsheet analysis.
I would like to purchase the 00 A4 but dont know whether to lease or buy.


PS
Help Me, PLEASE !!!!

Sk

My question is whether the "instant depreciation" of buying last year's model rather than the 2000 is more or less than the $1,750 incentive... Does anyone have a feel for this?

Sebastian

Me too! Me too! Send me your lease/finance analysis. I am currently at the tailend of my lease of a '98 VW Jetta GT, leased it in '97. My dealer, Jim Ellis in Atlanta wants to give me about $12.5 leaving me with about $1500-$2000 in the hole towards a '00 A41.8TQMS. Not sure if I want to lease or buy, the buy facor is that I think I would want to keep the car.

Help!!!!

DavidG

I bought my '99 in Dec. 1998, just a couple of months prior to the MY99.5 intro and still had a lease residual of 62% for 36 months or 63% for 36 months. Could it really have been THAT much better earlier in the year?