isles1

False. If the value of the car at lease end exceeds the agreed upon residual, then you have equity you can tap by purchasing the car and selling it privately -OR- having a dealer appraise it and put the equity towards another lease or purchase.

A car is a depreciating asset. When you lease, you are paying the depreciation, plus interest. If the car is worth less than or about the same as the lease end buy out, then walk away or buy it. If the car is worth more than the lease end buy out, you can decide to buy it for yourself at a great deal, or use the equity as suggested above. A lease gives you far more options than financing IMO.

To say you have nothing at the end of three years means you have no idea about leasing. To imply that buying or financing a car puts you in a better position, I disagree. The car depreciates at the same rate however you decide to go about acquiring it. Ask yourself what you really paid and what you are left with after you finally pay off that car you financed over 4 to 6 years.

The wild card is generally the interest rates, which are often better on financing versus leases. For the extra half-point I pay on a lease, the lease end options make it worth it to me.

DrGP

You are right and wrong. As far as Audi leases are concerned, it is not unusual to have equity in your car at lease end. BUT for most other cars, it is rare to have equity. Car manufactures want to sell cars . In order to sell more units, many (like BMW) subsidise the leases and set the residuals artificially high. When they do that, it is rare to have lease end equity.

DrGP

You will definitely NOT pay the same to lease or buy an Audi. First of all you will need a larger down payment. AND the S4s have been holding thire value really well. That had not been the case in the past and I can't say it is so with all current Audis either, because I just am not knowledgeable about other Audi models. Historically, BMWS have held their value much better than Audis. A lot of that was due to buyers perception of BMW's value and the desirability of the BMW brand name.

isles1

I'm talking S4s here. I have no idea what BMW does or does not do.

I've never had equity at the end of a lease on other brands; in other words, residual/buyout was higher than the actual value of the car at lease end. Pro: relatively low monthly lease payments, and I paid less than the total actual depreciation over the lease term. Perhaps that is a result of MFG subsidies to move cars.

Having a low residual on a leased car does not bother me for the reasons mentioned above. Because of the lease-end options, the relatively higher monthly lease payment is still a better compromise for me versus buying an S4. Everything else equal (knock on wood), at lease end I'll be able to trade in my current S4 for $5K - $9K more than the lease end buyout amount.

Obviously, this does not hold true for everyone in the market for an S4, as mileage per year also has to be taken into account when deciding to lease or buy/finance.

DrGP

If you are a person who leases and than releases at lease end, the higher residuals used by Audi is a deterrent and makes other brand cars(BMW, MB) more attractive and less expensive to lease. I personally would prefer the lower lease payments. But when it came down to releasing another 335i(which I really liked)or leasing a B8 S4 with higher residual, I chose the S4 and am completely happy with my decision. I chose a 42 month term and gave up a few options in order to keep my lease rate similar to that of the previous BMW. And now I find myself in position to buy the car for at least $10K under retail. I'm foolish not to do so. I can decide to sell it or trade it at any time.

4CE FED NOGARO

Buy it. The residual value is going to be lower than the actual value of your car. These cars hold their value very well.

WHTMTNS4

Yep just bought mine as I approached end of lease for at least 10-12k less than market value. Nothing else including refreshed B8.5 upgrades excites me enough to make a change. Love this car particularly living in northern New England as I rarely see highways and this car with winter set up is a beast in the snow. Perhaps I will now do some mods now including tune however I am very satisfied with the power this car delivers in stock. I think I will replace the peelers for the summer. I will wait and see what Audi brings in the future however worried about all the chatter about no manual transmission options. Oh well, if so perhaps I will jump to something else and this car will become my " winter beater".

Tweakophyte

As someone who typically would not lease, there does seem to be a timing window where you can lease the car on its first or second model year and have this spread between street price and the lease residual.

The only thing I'd throw in here is the residuals do seem to be holding values, however, I expect the spread between lease-residual and market value to close after the B9s come out. I believe the B8 S4 will hit the US at the end of 2015 as a MY16 or maybe the following year. Regardless, it's in the 3 year window.

DrGP

I was thinking that if these S4s are holding their value, it would behoove Audi to increase the residuals to make leasing more attractive and sell more cars. I remember when the B8s first came out, Audi was saying that they wanted to sell more S4 units to compete with the 335i rather than the M3. They would not have to subsidise the lease or take a loss at lease end to do such.

Audis or VWs 4Life

I went with a lease because about a year ago audi had this ridiculous deal going on the S4. Car had a 54.5k sticker, 0 down other lease inception fees and first month. (~$1400)

15k a year $678 (all in including taxes) Without taxes it is closer 616. 36 mos 30k buyout.

I have a business and I write it off. Most of the 2010's are going near 38-42 so I should be ahead by the end. I will likely do a courtesy sale of the car at the end (or buy it out) if I end up making 8k on the deal it will lower the lease cost to about $450 a mo. Can't touch a car like that for 450 a mo.