Confused by current S6 lease pricing
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Confused by current S6 lease pricing
I just got back from visiting our local Audi dealer to negotiate pricing on one of the many S6s they have in stock (I counted 7 at least). I went in looking for a deal in the neighborhood of the one 'jscatena' got (i.e. cap. cost of $58,776, residual of 54%, money factor of 2.3%, out of pocket of $4,502, and monthly @36/15 of $712), and was told that the residual is now 44%, the money factor is higher, etc. How can they get away with that for an '02 at this time of the year? Any suggestions on how to proceed...? What do you think would be a fair amount to be paying...?
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Just buy it...I don't understand leasing myself...I'm stupid I guess...
It seems that the payments are very confusing along with capital cost reductions, etc...residuals, money factors, etc.
Bottom line, I'd multiply the payments, add the "down", etc...and figure out how much money you spend over 36 months or so...then work it backwards with a purchase...
The benefits of the purchase are that you are not limited on either end getting rid of it...plus, the mileage "penalty" is much lower in a purchase...as a few thousand miles here or there don't make too much $$$ difference. But, obviously, a lease ensures you of a minimum "resale" value as you have that predetermined before you take the car.
Of course the residual just dropped...because it is now one year old and 36 months from now it will be 4 years old not 3...but where you need to make this money up is on the "capital cost"...that is, get the effective sales price down below invoice...since the car is one year old afterall.
Basically, from what I hear, the best time to lease is just before a new model year arrives, the residual is still high, but the capital cost is relatively low as they are trying to get rid of the cars before the new ones arrive. Or you should buy a one year old new car at below invoice.
I don't understand it either...sorry...you probably should have pulled the trigger last month.
Bottom line, I'd multiply the payments, add the "down", etc...and figure out how much money you spend over 36 months or so...then work it backwards with a purchase...
The benefits of the purchase are that you are not limited on either end getting rid of it...plus, the mileage "penalty" is much lower in a purchase...as a few thousand miles here or there don't make too much $$$ difference. But, obviously, a lease ensures you of a minimum "resale" value as you have that predetermined before you take the car.
Of course the residual just dropped...because it is now one year old and 36 months from now it will be 4 years old not 3...but where you need to make this money up is on the "capital cost"...that is, get the effective sales price down below invoice...since the car is one year old afterall.
Basically, from what I hear, the best time to lease is just before a new model year arrives, the residual is still high, but the capital cost is relatively low as they are trying to get rid of the cars before the new ones arrive. Or you should buy a one year old new car at below invoice.
I don't understand it either...sorry...you probably should have pulled the trigger last month.
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Yes, your big problem now if trying to minimize payments is the residual...
I agree with Finman -- negotiate the lowest purchase price possible on an '02, then take the 1.9% purchase financing. Based on the residual, Audi has already discounted the cars by at least 6%.
If you are looking for the lowest lease payment, you may actually be able to do better on an '03!
If you are looking for the lowest lease payment, you may actually be able to do better on an '03!
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Leas rates are regional based on inventory left and change around the 6th
o every month. Trying to duplicate something not found in your region, or 30 days later, may not be possible. The residual always falls as the model year gets older. In addition, if an incentive was being held in your area by AoA, but most of the cars effected have been sold, AoA will discontinue the special rates and leave the dealer to find a way to unload the remaining cars. Of course, the dealer, even if selling or leasing at cost, cannot comptete with AoA incentive rates.
In some extreme cases, dealers can return the cars to AoA, and get a credit for future cars, while the "old" cars are shipped off to secondary markets like Asia or South America.
In some extreme cases, dealers can return the cars to AoA, and get a credit for future cars, while the "old" cars are shipped off to secondary markets like Asia or South America.
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Re: Confused by current S6 lease pricing
Bc,
I just completed negotiations for the leasing of my incoming 2002 A6 4.2. Rule of thumb is to negotiate sales price, then discuss leasing. In direct contradiction to common wisdom I provided the dealership with my "target numbers" and let them work out the best solution.
While I cannot address either the purchase or price of a S6, I did manage to hit my target numbers with a little shopping around (I started in Honolulu where there is no competition), then called a friend who owns several car dealerships in both Hawaii and California.
McKenna Motorcars in Norwalk handles a large Audi volume and was exceedingly solicitous. For comparison shopping I enclose their phone number (562) 868-3233. Either Ken Babaneau (sales manager) or Nick Locasale will treat you very well.
Good hunting,
--BEAU
I just completed negotiations for the leasing of my incoming 2002 A6 4.2. Rule of thumb is to negotiate sales price, then discuss leasing. In direct contradiction to common wisdom I provided the dealership with my "target numbers" and let them work out the best solution.
While I cannot address either the purchase or price of a S6, I did manage to hit my target numbers with a little shopping around (I started in Honolulu where there is no competition), then called a friend who owns several car dealerships in both Hawaii and California.
McKenna Motorcars in Norwalk handles a large Audi volume and was exceedingly solicitous. For comparison shopping I enclose their phone number (562) 868-3233. Either Ken Babaneau (sales manager) or Nick Locasale will treat you very well.
Good hunting,
--BEAU
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Re: Confused by current S6 lease pricing
You might find that someone has to "eat" the 02' depreciation at the begining of the term. Meaning you will have an extra years worth of depreciation hitting the assest, before you even buy it. Might have better luck turning that into a good purchase, but probably not a good lease. I just ran the numbers on an 02' A8, and year one depreciation was about 20K. I would have to lease that depreciation in a monthly payment (ouch...), regardless of the money factor the extra 8K, in what turns out feeling like a years carrying cost, sucks... Have someone quote numbers on an 03' they are probably going to be similar, maybe better... Just my 2 cents... It doesnt seem reasonable, but it was what happened to me too...
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Advantages in leasing are purely as tax write-offs - depreciating a purchased car is extremely
limited - something like $3,020 the first year, $2,600 the next year, $1,925 the following, etc, so essentially you would need about 20 years to depreciate an S6, or a thousand years for an RS6. If you lease, you get to deduct the entire payment (or rather the percentage that is used for business, such as 85%) and all expenses related to it as a business expense or write-off, provided you can legitimately claim it as an expense (as an independent contractor). If your company leases for you, they get the write-offs. On an RS6 for example, the bazillion dollar monthly lease payment is a nice write-off for a company...hint, hint.
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