Bad idea to purchase over leasing?
07-27-2017, 08:02 PM
#21
AudiWorld Senior Member
In general nearly every brand has seen an enormous up-swing in leasing. Leasing isn't for everyone, but there is a tremendous value to be had for many IF you understand what you are doing. Ask someone in the auto industry if the purchase or lease a car, and I'm guessing 9 out of 10 lease. If the people that sell cars for a living chose to lease, I'm kinda guessing they have some experience on knowing what is the cheapest way to own a new car. If you get a new car routinely and aren't looking for 100,000+ miles on your next car, likely in the current environment leasing is the best way to drive one. I worked in the industry for years and have sold bazillions of cars, and it floors me how many people refuse to lease (and spend more money) all because "they heard leasing is bad". Crazy...
07-27-2017, 10:18 PM
#22
AudiWorld Super User
I can tell you in the Midwest right now Audi lease deals are crazy-good.....I'm certain there is a HUGE number of people leasing Audis right now. BWM may have more leases, but they chose to do this as a marketing strategy. Right now BMW is about to take in a GLUT of 3 series (and other models) that is going to absolutely obliterate their used values/CPOs and destroy their market. In fact, the 3 series is currently on of the list of highest-debreciateding cars on sale in the USA. Google and read about BWMs upcoming off-lease mess.....it's scary. Maybe Audis in the past didn't lease well, but in the last two years, they are very aggressive and moving tons of leased Audis.
In general nearly every brand has seen an enormous up-swing in leasing. Leasing isn't for everyone, but there is a tremendous value to be had for many IF you understand what you are doing. Ask someone in the auto industry if the purchase or lease a car, and I'm guessing 9 out of 10 lease. If the people that sell cars for a living chose to lease, I'm kinda guessing they have some experience on knowing what is the cheapest way to own a new car. If you get a new car routinely and aren't looking for 100,000+ miles on your next car, likely in the current environment leasing is the best way to drive one. I worked in the industry for years and have sold bazillions of cars, and it floors me how many people refuse to lease (and spend more money) all because "they heard leasing is bad". Crazy...
In general nearly every brand has seen an enormous up-swing in leasing. Leasing isn't for everyone, but there is a tremendous value to be had for many IF you understand what you are doing. Ask someone in the auto industry if the purchase or lease a car, and I'm guessing 9 out of 10 lease. If the people that sell cars for a living chose to lease, I'm kinda guessing they have some experience on knowing what is the cheapest way to own a new car. If you get a new car routinely and aren't looking for 100,000+ miles on your next car, likely in the current environment leasing is the best way to drive one. I worked in the industry for years and have sold bazillions of cars, and it floors me how many people refuse to lease (and spend more money) all because "they heard leasing is bad". Crazy...
07-28-2017, 02:34 AM
#23
For the last ten or so years, Audis have leased poorly. But things are improving, at least here in competitive Los Angeles.
One thing not mentioned, you can always privately sell your leased Audi for a profit if the car is worth more than the end of lease value. I have done this with every car I've leased, mainly because I drive under the allotted miles and keep it in pristine condition. Most don't like the hassles of privately selling a car, so I can understand that. But if you do end up with a car at the end of a lease that is worth more than what the contract says, at least "force" the dealer to give you some trade-in credit if getting a new one. Often, people don't research this and just return the car not knowing they have some positive equity in it.
One thing not mentioned, you can always privately sell your leased Audi for a profit if the car is worth more than the end of lease value. I have done this with every car I've leased, mainly because I drive under the allotted miles and keep it in pristine condition. Most don't like the hassles of privately selling a car, so I can understand that. But if you do end up with a car at the end of a lease that is worth more than what the contract says, at least "force" the dealer to give you some trade-in credit if getting a new one. Often, people don't research this and just return the car not knowing they have some positive equity in it.
07-28-2017, 08:33 AM
#25
AudiWorld Super User
For the last ten or so years, Audis have leased poorly. But things are improving, at least here in competitive Los Angeles.
One thing not mentioned, you can always privately sell your leased Audi for a profit if the car is worth more than the end of lease value. I have done this with every car I've leased, mainly because I drive under the allotted miles and keep it in pristine condition. Most don't like the hassles of privately selling a car, so I can understand that. But if you do end up with a car at the end of a lease that is worth more than what the contract says, at least "force" the dealer to give you some trade-in credit if getting a new one. Often, people don't research this and just return the car not knowing they have some positive equity in it.
One thing not mentioned, you can always privately sell your leased Audi for a profit if the car is worth more than the end of lease value. I have done this with every car I've leased, mainly because I drive under the allotted miles and keep it in pristine condition. Most don't like the hassles of privately selling a car, so I can understand that. But if you do end up with a car at the end of a lease that is worth more than what the contract says, at least "force" the dealer to give you some trade-in credit if getting a new one. Often, people don't research this and just return the car not knowing they have some positive equity in it.
07-31-2017, 04:26 PM
#26
AudiWorld Senior Member
Here is the way I look at it.
Current lease rates are 1.47% in Connecticut. If I want to buy the car lets say I pay 33% cash and finance the rest. The best loan rate I can get now is about 3%. The 33% (about $16,000) for the downpayment is sitting in investments which are earning between 5% and 10%. Why would I want to lose that investment income on the downpayment and pay a higher interest rate on the remaining balance?
Another factor here in CT is the "Luxury Tax". For a car with a sticker price > $50,000 (independent your final purchase price) the sales tax rate is 7.75% vs. 6.45% for a car less than $50,000. By leasing I unfortunately have to pay 7.75% sales tax but only on the capital repayment portion of the lease payment, not on the entire value of the car. If I decide to buy out the car at the end of the leas then I will only need to pay the 6.35% tax on the residual value (because the used car is worth less than $50,000)
No matter how I look at this, leasing is a better deal. This would not be the case if lease rates approached investment income (perhaps someone with poor credit).
Current lease rates are 1.47% in Connecticut. If I want to buy the car lets say I pay 33% cash and finance the rest. The best loan rate I can get now is about 3%. The 33% (about $16,000) for the downpayment is sitting in investments which are earning between 5% and 10%. Why would I want to lose that investment income on the downpayment and pay a higher interest rate on the remaining balance?
Another factor here in CT is the "Luxury Tax". For a car with a sticker price > $50,000 (independent your final purchase price) the sales tax rate is 7.75% vs. 6.45% for a car less than $50,000. By leasing I unfortunately have to pay 7.75% sales tax but only on the capital repayment portion of the lease payment, not on the entire value of the car. If I decide to buy out the car at the end of the leas then I will only need to pay the 6.35% tax on the residual value (because the used car is worth less than $50,000)
No matter how I look at this, leasing is a better deal. This would not be the case if lease rates approached investment income (perhaps someone with poor credit).
08-07-2017, 01:30 AM
#27
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Here is the way I look at it.
Current lease rates are 1.47% in Connecticut. If I want to buy the car lets say I pay 33% cash and finance the rest. The best loan rate I can get now is about 3%. The 33% (about $16,000) for the downpayment is sitting in investments which are earning between 5% and 10%. Why would I want to lose that investment income on the downpayment and pay a higher interest rate on the remaining balance?
Another factor here in CT is the "Luxury Tax". For a car with a sticker price > $50,000 (independent your final purchase price) the sales tax rate is 7.75% vs. 6.45% for a car less than $50,000. By leasing I unfortunately have to pay 7.75% sales tax but only on the capital repayment portion of the lease payment, not on the entire value of the car. If I decide to buy out the car at the end of the leas then I will only need to pay the 6.35% tax on the residual value (because the used car is worth less than $50,000)
No matter how I look at this, leasing is a better deal. This would not be the case if lease rates approached investment income (perhaps someone with poor credit).
Current lease rates are 1.47% in Connecticut. If I want to buy the car lets say I pay 33% cash and finance the rest. The best loan rate I can get now is about 3%. The 33% (about $16,000) for the downpayment is sitting in investments which are earning between 5% and 10%. Why would I want to lose that investment income on the downpayment and pay a higher interest rate on the remaining balance?
Another factor here in CT is the "Luxury Tax". For a car with a sticker price > $50,000 (independent your final purchase price) the sales tax rate is 7.75% vs. 6.45% for a car less than $50,000. By leasing I unfortunately have to pay 7.75% sales tax but only on the capital repayment portion of the lease payment, not on the entire value of the car. If I decide to buy out the car at the end of the leas then I will only need to pay the 6.35% tax on the residual value (because the used car is worth less than $50,000)
No matter how I look at this, leasing is a better deal. This would not be the case if lease rates approached investment income (perhaps someone with poor credit).
Also, interesting thing for Arizona, if you buy a car from local dealer, you pay state tax(5.6%)+city tax(different in every city, lowest is 2.2%), but if you buy a car out of state, you only need to pay state tax when register it...I may never buy a luxury car from any dealer in AZ again....lease may be different(some CA dealers told me they do not do out-of-state lease.)
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