docancho

I have been leasing BMWs for some time and now looking to get 2014 S4. I see that S4 current residuals are simply terrible and lease payments are relatively high in comparison with MSRP of car.

I know that I get sick of every car in 2-3 years and want to change. First, I looked into leasing S4 but now thinking about buying.

What do you think -- Would it be better to simply purchase car and privately sell when I want to change in 2-3 years or do you think I should stick to leasing?

please share your thoughts and experience with Audi leases and/or purchasing.


Cheers!

isles1

A relatively conservative residual will help you at end of lease term on a trade or private sale; you would be in a similar situation if you were to finance and then sell or trade in a few years. Residuals on MY2013 are, IMO, low by a few percentage points. There are no lease programs announced for MY2014, so I am not sure where you are getting your info from. But I would expect interest rates to be high initially along with liberal residuals.

There are pros and cons to leasing or financing, and that usually comes down to how many miles you drive per year, if you can write off the lease payments as a business expense, and how often you like to get into a new car. The monthly payment to finance over 5 years is usually significantly more than a lease payment if you are not putting any money down on the purchase. Only you can make that decision.

Interest rates on 2013 Audi S4 leases are good at this point: Money Factor of .00068, or ~1.5% for 36-month leases (.00088 for more than 36 months). Residuals differ depending on lease term, trim package and miles per year. Those programs are in effect only until early April 2013, so you would have to take delivery or order custom before then to lock in those rates.

You can likely do better on a finance if you bring your own financing, but may miss out on conquest cash incentive as a current BMW owner.

docancho

Thank you isles1!

This would be my personal leisure car and I usually do roughly 8k miles per year. For orientation purposes, I used current S4 premium plus residual of 56% for 36months/10k miles per year which is horrendous.

Due to low residual, I have been getting quotes $750-800/month for a $55k car. Lease payment might seem steep considering that used 3yr old S4s roughly go for around $40k now.

Am I the only one seeing that Audi cars are not made to be leased but purchased? Please chime in with your experiences and thoughts.


Cheers!

isles1

The car is worth what it is worth after 3 years of leasing or three years of financing. I, too, think the current residuals are low for 2013 S4s. The buyout on my 2013 (3 years / 12K miles per year) is something like $29,000. If I love it, I buy it at a good price. If I want to get into something new, I trade it in or sell it privately and put the "equity" towards a new vehicle.

Leasing is still generally less expensive per month than financing. I also like leasing because if the car has warranty repair issues or is in an accident, I just turn it in after 3 years and do not have to do with the hassle of trying to sell a car with a "history".

DrGP

You will almost always do better leasing a BMW vs a comparable Audi because BMWFS subsidises the leases and they set the residuals higher than Audi. BMW really just wants to keep selling a higher volume of cars in the US. I have leased most of my cars in the last 15 yrs including 2 BMW's and 3 Audis including my current 2010 S4. In order to get a lease rate on my current S4 that was close to my 07 335i, I had to increase the lease term from 36 to 42 months . Also I had to eliminate some options that were on my 335i to keep the MSRP down. But I would do it again because even in lightly equipped form, the S4 is a big improvement over the 335i. But here's the rub. Since Audi doesn't inflate the residual. I will be able to buy my S4 in Sept for $25.6K. Car has to be worth at least $35K at that time. So even if I planned on leasing another car, it is in my financial interest to buy the car and either keep it or sell it. Did the same on my 04 S4. Bought it, paid over $2k in tax and trans fees, and resold it. I walked away with $3k in my pocket and the buyer got an S4 for a couple of thousand dollars under retail. BTW, if you want a new car every 3 yrs or so, it makes no sense to buy your car. Leasing gives you lower monthly payments and more options at lease end. If you think you will keep your car long term, don't lease.

Ziggler25

Whether financed or lease, whatever you do, don't pay sticker!

docancho

of course not

I got an offer 5% of off MSRP for 2014 exclusive color order next month. is this good enough or I should look for better?

isles1

Not bad for a new model year and an ordered car, but ask for 6% off MSRP. You need to watch the fees the dealer may try to add to the deal. The price you negotiate should exclude any incentives you qualify for (e.g. conquest cash). These incentives should be a cap cost reduction that is subtracted from the negotiated sales price.

A practical question for the dealer is what lease programs will apply to this ordered car? The current program applies to MY2013. You seem very sensitive to the monthly lease payment in light of the relatively low residuals set forth by Audi Financial. In the past, it is not unheard of to see interest rates on leases in the beginning of a model year between 2.5% and 3% for the S4. As posted above, the current lease interest rate is about 1.5%.

Ziggler25

Absolutely! For a brand new model year, just arriving, there will be a higher willingness to pay by the consumer, and anybody in the business of making money knows that.

Case in point, when I was looking at leasing MY2013 S4, my reserach started in Nov/Dec 2012. The Money Factor was .0014. When I finally inked a deal in late Jan, the MF was .00064. That reduction was good for about $60-70 per month.

Your best deal right now will be on MY13 dealer inventory.

docancho

I have seen S4 in non-standard color and want that one. has to be done via 2014 exclusive color order which starts in month or two.

else I would be looking at one of the 2013 in stock.