Term Care Help
12-08-2018, 02:46 PM
#1
AudiWorld Junior Member
Thread Starter
Term Care Help
So I purchased my first ever Audi and part of the sale includes Audi Care for 4 years. The finance manager tried to sell me term care over and ovwrand I declined it, because all I wanted was the included Audi Care. He kept showing me different numbers after I said no and the number I agreed to what I thought was whatvmy monthly payment would be without, and I said of course I want that one. I didn't realize the monthly costs he was showing me had some form of term care in there. I didn't realize until I got home after a long night with my 4 year old there distracting the heck out of us. Turns out that I agreed to about $3,000.00 for term care. So I'm stuck with it and I can cancel, but it doesnt change my monthly payment. What it does is it can be applied to the principal. He swears that I should keep it. Here's part of the emails he sent me. ..
"The term care will essentially cover everything that isn’t covered by the manufacturer or the audicare. Nonscheduled maintenance as in brakes, wheel alignment, windshield wipers, additional fluids, battery replacement, lightbulb replacement, headlamp replacement and coverage on belts, hoses and everything that is not considered a manufacturer defect. So you’ll have all the additional maintenance costs that aren’t included with the audicare bundled in, as well as wear and tear on any part with no deductible. I was able to bundle it in with your audicare to give you additional miles, nonscheduled maintenance and wear and tear. I remember putting it together so, if you turn in the vehicle, you won’t be penalized for those wearable items and you should have no costs while you’re driving the vehicle."
" It was paired with the audicare, showing as separate item on the menu and paperwork. We were able to drop the payment significantly and cover the implied cost of ownership that you would have been responsible for at various points. It is worth the maintenance items alone, and if you have any kind of repair that isn’t a factory defect, you’ll have it covered where it would not be otherwise, making money and receiving loaner cars and roadside assistance for the entire period of ownership.
I know it was a lot of information and there was a lot going on that day, so let me know if you have any questions. You are set up very well, and you won’t have the nonscheduled maintenance surprise you or come out of pocket for something like an 1800 dollar headlamp or anything else!"
" I was not in the office, but yes you could cancel it within thirty days, but you would be on the hook for the nonscheduled maintenance and wear and tear while you drive it and if you turn it in as well. The payment is set , so it would just go to the balance of the principal. The payment does not change, and with the additional maintenance that isn’t included in audi care, you would be making money even without having any wear and tear or warranty issues that would be upgraded by the term care"
So I'm wanting opinions and if I have any other options. I told him I felt I was lied to and it was snuck in even after I told him time after time I just wanted the Audi care.
Thanks everyone
"The term care will essentially cover everything that isn’t covered by the manufacturer or the audicare. Nonscheduled maintenance as in brakes, wheel alignment, windshield wipers, additional fluids, battery replacement, lightbulb replacement, headlamp replacement and coverage on belts, hoses and everything that is not considered a manufacturer defect. So you’ll have all the additional maintenance costs that aren’t included with the audicare bundled in, as well as wear and tear on any part with no deductible. I was able to bundle it in with your audicare to give you additional miles, nonscheduled maintenance and wear and tear. I remember putting it together so, if you turn in the vehicle, you won’t be penalized for those wearable items and you should have no costs while you’re driving the vehicle."
" It was paired with the audicare, showing as separate item on the menu and paperwork. We were able to drop the payment significantly and cover the implied cost of ownership that you would have been responsible for at various points. It is worth the maintenance items alone, and if you have any kind of repair that isn’t a factory defect, you’ll have it covered where it would not be otherwise, making money and receiving loaner cars and roadside assistance for the entire period of ownership.
I know it was a lot of information and there was a lot going on that day, so let me know if you have any questions. You are set up very well, and you won’t have the nonscheduled maintenance surprise you or come out of pocket for something like an 1800 dollar headlamp or anything else!"
" I was not in the office, but yes you could cancel it within thirty days, but you would be on the hook for the nonscheduled maintenance and wear and tear while you drive it and if you turn it in as well. The payment is set , so it would just go to the balance of the principal. The payment does not change, and with the additional maintenance that isn’t included in audi care, you would be making money even without having any wear and tear or warranty issues that would be upgraded by the term care"
So I'm wanting opinions and if I have any other options. I told him I felt I was lied to and it was snuck in even after I told him time after time I just wanted the Audi care.
Thanks everyone
12-08-2018, 11:05 PM
#2
I had never heard of term care until I read your post, so I checked it on the AoA site:
https://www.audiusa.com/content/dam/audiusa/Latcha/service-parts/term-care-protection-audi.pdf
It says that the contract is cancellable after 30 days for a $50 fee. I guess your dealer is saying that up to that point it is cancellable without a fee. If you need more than 30 days to decide what to do, a $50 hit isn’t all that much, so take the time to figure it all out. I looked through the covered items and it is fairly extensive. At the cost you mentioned ($3,000) assuming you keep the car for 6 years and do not exceed the 72,000 mile mark by that time, then the cost would amount to $500 a year. In terms of Audi service that is not a big expense for the items covered, so maybe it is worth it. I lease, so I would never reach 6 years or 72,000 miles on any one car. I do get Audi Care for the routine maintenance and have an excess wear and tear plan for things like scratches, chipped wheels, worn tires and the like.
Assuming a 5-year loan term, it would probably mean you pay the loan off a lot quicker which is not necessarily a bad thing. That would also reduce the interest you pay over the lease term. When I used to buy I always got a long-ish loan term and then paid an additional $75 or $100 a month to reduce the total interest paid and shorten the term, but it still gave me the option at high expense times like the Holidays to pay only the contracted loan amount.
It seems you financed (not leased) and so the idea that the refund would be applied to the principal sort of makes sense. Any amount you pay in additional principal reduces the base on which the subsequent months’ interest is calculated so once that refund is applied you would still make the same loan payment, but a much greater portion of it would go to principal reduction and a lot less to interest.
Anyway, good luck whatever you do. I will keep leasing if I continue to get Audi’s.
https://www.audiusa.com/content/dam/audiusa/Latcha/service-parts/term-care-protection-audi.pdf
It says that the contract is cancellable after 30 days for a $50 fee. I guess your dealer is saying that up to that point it is cancellable without a fee. If you need more than 30 days to decide what to do, a $50 hit isn’t all that much, so take the time to figure it all out. I looked through the covered items and it is fairly extensive. At the cost you mentioned ($3,000) assuming you keep the car for 6 years and do not exceed the 72,000 mile mark by that time, then the cost would amount to $500 a year. In terms of Audi service that is not a big expense for the items covered, so maybe it is worth it. I lease, so I would never reach 6 years or 72,000 miles on any one car. I do get Audi Care for the routine maintenance and have an excess wear and tear plan for things like scratches, chipped wheels, worn tires and the like.
Assuming a 5-year loan term, it would probably mean you pay the loan off a lot quicker which is not necessarily a bad thing. That would also reduce the interest you pay over the lease term. When I used to buy I always got a long-ish loan term and then paid an additional $75 or $100 a month to reduce the total interest paid and shorten the term, but it still gave me the option at high expense times like the Holidays to pay only the contracted loan amount.
It seems you financed (not leased) and so the idea that the refund would be applied to the principal sort of makes sense. Any amount you pay in additional principal reduces the base on which the subsequent months’ interest is calculated so once that refund is applied you would still make the same loan payment, but a much greater portion of it would go to principal reduction and a lot less to interest.
Anyway, good luck whatever you do. I will keep leasing if I continue to get Audi’s.
Last edited by irenesbob; 12-08-2018 at 11:10 PM.
12-09-2018, 10:08 AM
#4
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Audi Premier Purchase appears to be leasing in all of the ways that matter (guaranteed buyout price, mileage limits, wear & tear charges), so we might as well say that OP is leasing, for simplicity's sake.
What is the term of the Term Care? It sounds like it might match the maximum term of Audi Care (4 years, assuming the 4 covered services don't come first). If so, that's $750/year.
If an F&I person tried to convince me that their car could reasonably cost me $750/year while it's under warranty and has all scheduled maintenance covered, I would have to assume that they were either insane or were trying to sell me a car-shaped bag of flaming poop (or an FCA product, but I repeat myself
), and either way I'd walk away from that deal so fast there would be a cartoon dust trail behind me.
Caveat: I've always bought Japanese and have never need brakes replaced before 100,000km, so $750 in repairs/non-scheduled maintenance in four years would be more expensive than any car I've ever owned.
What is the term of the Term Care? It sounds like it might match the maximum term of Audi Care (4 years, assuming the 4 covered services don't come first). If so, that's $750/year.
If an F&I person tried to convince me that their car could reasonably cost me $750/year while it's under warranty and has all scheduled maintenance covered, I would have to assume that they were either insane or were trying to sell me a car-shaped bag of flaming poop (or an FCA product, but I repeat myself
), and either way I'd walk away from that deal so fast there would be a cartoon dust trail behind me.Caveat: I've always bought Japanese and have never need brakes replaced before 100,000km, so $750 in repairs/non-scheduled maintenance in four years would be more expensive than any car I've ever owned.
12-09-2018, 11:12 AM
#5
AudiWorld Junior Member
Thread Starter
Audi Premier Purchase appears to be leasing in all of the ways that matter (guaranteed buyout price, mileage limits, wear & tear charges), so we might as well say that OP is leasing, for simplicity's sake.
What is the term of the Term Care? It sounds like it might match the maximum term of Audi Care (4 years, assuming the 4 covered services don't come first). If so, that's $750/year.
If an F&I person tried to convince me that their car could reasonably cost me $750/year while it's under warranty and has all scheduled maintenance covered, I would have to assume that they were either insane or were trying to sell me a car-shaped bag of flaming poop (or an FCA product, but I repeat myself), and either way I'd walk away from that deal so fast there would be a cartoon dust trail behind me.
Caveat: I've always bought Japanese and have never need brakes replaced before 100,000km, so $750 in repairs/non-scheduled maintenance in four years would be more expensive than any car I've ever owned.
What is the term of the Term Care? It sounds like it might match the maximum term of Audi Care (4 years, assuming the 4 covered services don't come first). If so, that's $750/year.
If an F&I person tried to convince me that their car could reasonably cost me $750/year while it's under warranty and has all scheduled maintenance covered, I would have to assume that they were either insane or were trying to sell me a car-shaped bag of flaming poop (or an FCA product, but I repeat myself
), and either way I'd walk away from that deal so fast there would be a cartoon dust trail behind me.Caveat: I've always bought Japanese and have never need brakes replaced before 100,000km, so $750 in repairs/non-scheduled maintenance in four years would be more expensive than any car I've ever owned.
Appreciate this. So I'm better off just applying it to the principal? That's like $60.00/month in extra payment. I swear this man snuck this in on me, because I kept telling him I just wanted the Audi care that was included in the discounted sale price.
Also, itenesbob, why do you lease Audi's and not purchase?
12-09-2018, 11:52 AM
#6
AudiWorld Senior Member
There are many reasons for both leasing and purchasing. In my case I was looking at purchasing a low mileage 2017 or a new 2018. When I decided on a 2018 I could either take about $50k out of investments which earn on average 5-6% per year or finance. To me it was better financially to lease at the same interest rate. Financially it makes sense to use someone else’s money and pay them a lower interest rate so then it is either lease or buy. With the lease I had no money down - no need to access any of my investments and then pay capital gains taxes. I also did not have to pay the sales tax on the entire car up front, I pay it on each lease payment.
When the lease is up, depending on the value of the car vs. the residual and what else is available I can either buy out the lease or get a new car.
If you work out all of the numbers assuming you buy out the lease or finance the car over the same period, the lease is about $1000-$1500 more expensive but you have the use of your money during the term of the lease. In my case having the money to keep invested and not pay taxes on the capital gains made it a wash.
If you are in business and this can be a company car then the math is even more in favor of a lease because the accounting is easier.
Where a lease does not make sense is for someone who cannot predict their mileage and does not plan to buy out the lease or for someone who gets a lot of dents and dings on their cars. In these cases the fees at the lease end can be expensive (but if you are going to buy out the lease the dents and dings are not an issue).
When the lease is up, depending on the value of the car vs. the residual and what else is available I can either buy out the lease or get a new car.
If you work out all of the numbers assuming you buy out the lease or finance the car over the same period, the lease is about $1000-$1500 more expensive but you have the use of your money during the term of the lease. In my case having the money to keep invested and not pay taxes on the capital gains made it a wash.
If you are in business and this can be a company car then the math is even more in favor of a lease because the accounting is easier.
Where a lease does not make sense is for someone who cannot predict their mileage and does not plan to buy out the lease or for someone who gets a lot of dents and dings on their cars. In these cases the fees at the lease end can be expensive (but if you are going to buy out the lease the dents and dings are not an issue).
12-09-2018, 12:05 PM
#7
AudiWorld Super User
The Audi Term Care is incredibly expensive for what it covers. In eight years of owning my A4, that plan would have paid for one $200 battery and a set of wiper blades that I replaced for $20. I'd rather have the extra $2800 in my bank account.
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12-09-2018, 01:37 PM
#8
AudiWorld Junior Member
Thread Starter
Unfortunately i already have completed the transaction. So my payments will stay the same, only options are continue with term care or apply that money to the principal. I'm leaning ore toward the principal. I would have paid more regardless of my payments, but I also didn't realize the tires on this car have 20,000 mile warranty on them, so those will be replaced in the next 1.5- 2 years.
12-09-2018, 01:51 PM
#9
A few reasons:
- I never want to have a car again that I have to pay to get anything fixed on
- I like having a newer version of things every few years and I hate selling or trading in
- I’m a bad negotiator; when I want to get rid of something (divorce as well) I’m like “just take it”
- I am old (76) and live alone – no one to tell me I can’t or shouldn’t on anything
- I have excellent credit so I always get good money rates and I’d rather pay possibly a bit more each month on a lease (not even sure that is true) and then watch the nest egg grow – China tariff wars aside lol
- I am fickle and go from an Audi A6 one year to an A4 the next and maybe a TT or Subie Ascent after that. Buying would make me feel trapped a bit. Even a bit is too much entrapment for me at this point in my life
- Finally, I don't drive as much now as when I was younger so I can live within the mileage limit
- I never want to have a car again that I have to pay to get anything fixed on
- I like having a newer version of things every few years and I hate selling or trading in
- I’m a bad negotiator; when I want to get rid of something (divorce as well) I’m like “just take it”
- I am old (76) and live alone – no one to tell me I can’t or shouldn’t on anything
- I have excellent credit so I always get good money rates and I’d rather pay possibly a bit more each month on a lease (not even sure that is true) and then watch the nest egg grow – China tariff wars aside lol
- I am fickle and go from an Audi A6 one year to an A4 the next and maybe a TT or Subie Ascent after that. Buying would make me feel trapped a bit. Even a bit is too much entrapment for me at this point in my life
- Finally, I don't drive as much now as when I was younger so I can live within the mileage limit
12-09-2018, 01:55 PM
#10
AudiWorld Junior Member
Thread Starter
A few reasons:
- I never want to have a car again that I have to pay to get anything fixed on
- I like having a newer version of things every few years and I hate selling or trading in
- I’m a bad negotiator; when I want to get rid of something (divorce as well) I’m like “just take it”
- I am old (76) and live alone – no one to tell me I can’t or shouldn’t on anything
- I have excellent credit so I always get good money rates and I’d rather pay possibly a bit more each month on a lease (not even sure that is true) and then watch the nest egg grow – China tariff wars aside lol
- I am fickle and go from an Audi A6 one year to an A4 the next and maybe a TT or Subie Ascent after that. Buying would make me feel trapped a bit. Even a bit is too much entrapment for me at this point in my life
- Finally, I don't drive as much now as when I was younger so I can live within the mileage limit
- I never want to have a car again that I have to pay to get anything fixed on
- I like having a newer version of things every few years and I hate selling or trading in
- I’m a bad negotiator; when I want to get rid of something (divorce as well) I’m like “just take it”
- I am old (76) and live alone – no one to tell me I can’t or shouldn’t on anything
- I have excellent credit so I always get good money rates and I’d rather pay possibly a bit more each month on a lease (not even sure that is true) and then watch the nest egg grow – China tariff wars aside lol
- I am fickle and go from an Audi A6 one year to an A4 the next and maybe a TT or Subie Ascent after that. Buying would make me feel trapped a bit. Even a bit is too much entrapment for me at this point in my life
- Finally, I don't drive as much now as when I was younger so I can live within the mileage limit