RLiu818

I am told that without a security deposit, .00015 will be added to the MF when leasing. This is assuming that I don't qualify for the Audi Loyalty program which waives the security deposit.

Can someone tell me what I should expect to pay for a security deposit and whether this is refundable and under what terms will it be fully refundable.

Also, does it make financial sense to pay the security deposit to get the more favorable MF?

Thanks

Bada Bing

Typically the amount of the security deposit is equal to your lease payment (I think it's after use tax has been added) rounded up to the nearest $50 increment. For example, if your lease payment comes out to $629, the required security deposit would be $650. At least that's how it works with BMW Financial.

The money is fully refundable under all conditions at the end of the lease. I would say it definitely makes sense to pay the deposit and get the lower MF. In fact, you may be able to give additional deposits and lower your MF further. On my current BMW lease, I paid 7 additional security deposits ($3500 for a total deposit of $4000) to lower my MF by 0.00049 (down from 0.00205 to 0.00156). It saved me about $35 per month in lease payment. I think Audi has a similar MSD (multiple security deposit) program but I'm not sure if you get 0.00007 reduction per security deposit.

tubi

Yes, do MSD to lower MF. Worst case scenario, i.e. car totaled, you'll still get your SD back. If you put money down (cap cost reduction) like most people do, you'll kiss that money goodbye.

DrGP

A security deposit is used so the dealer already has your money if there are damages or extra wear and tear on the car. That way they just deduct the lease end costs from your security deposit and refund the remainder to you. That gives the dealer some SECURITY that they won't have to go after you to collect any lease end fees. If the car is totalled, the insurance company and GAP insurance(which is included in AFS leases) will pay off the car. Security deposit would then be entirely returned since the lease parameters were satisfied and no other charges accrue due to the total loss.

RLiu818

The dealer told me that the security deposit is refundable less a "disposition fee" for the lease end. What does he mean by this?

DrGP

If you do not lease another Audi, there is a fee. I have the same situation my 335i. Dealer required no security deposit. Since I will be leasing a new S4 when my lease runs out, I will have to pony up $350 at lease end Plus any damage or excess wear issues to which I believe there will be none.

Bada Bing

All automakers charge a disposition fee for cleaning and reconditioning the car for resale. I think MB charges $500 or more in disposition fee, so $350 that BMW and Audi charge is somewhat reasonable. If you end up leasing or buying another car from AFS, you should ask them to waive the disposition fee. If you are giving the car back and walking away, the charge applies.

RLiu818

Thanks for the clarification. At least now I know what to expect and that this isn't some attempt at getting more money from my ignorance.

BlackjackMulligan

Not all charge it, but in my experience, most do.

tubi

IIRC, Honda, Acura and Infiniti don't have disposition fee.