Bizzare end of lease issue.
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Bizzare end of lease issue.
Long story short: My friend's '01 2.7T lease expires this October, but he wants into a new Allroad now. He's happy to just cut a check to AFS for the total sum of the 4 remaining payments and turn in the vehicle now, but here's the bizzare part. If he does so, he's liable for the potential difference in residual value that AFS actually receives versus the amount defined in his lease contarct. If he just continues to make his monthly payment and keeps the car 'til end of contract, no such liability. Obviously he'll keep the car parked in his driveway and make the payments monthly. I just don't understand AFS's logic. Anyone?
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AFS uses an insurance company that covers some or all of the residual difference between
actual value, and contract value. I don't think they can collect ( and you know they will with the used car market values ) if the car gets turned in early.
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I guess that explains the strange AFS attitude toward lease buy-outs....
AFS seems to think I should be thrilled to get a $1,500 reduction below the residual on my lease (2000 2.7t). That results in a price of about $25,300. By all accounts I've seen, the auction prices of these cars is way below $25,000, so they know they will lose money if I turn it in. If I buy it though, they would avoid writing the asset down as much as if they have to auction it. I guess the insurance makes up the difference. They seem to be "steering" us toward buying a new Audi, but even then they grant loyalty bonuses that reduce their profit. Obviously the answer lies in the corporate accounting treatment of the transaction and the goals they are trying to achieve.
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Tell me how you like the new one vs. the 2000 2.7...
I am a little hung up on the lack of tip/radio controls on the wheel, but what are the positive differences between the 2 models? The deals on 2.7's are even more aggressive than on 4.2s. I was set on "upgrading", but I do love my 2.7!
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Just went thru same deal with wife's Saab
At mileage, paid for.. 6 months b4 lease end.. think they want it back, nah... try and negotiate a reasonable buyout, nah... Did I let it sit in the snowbank at the end of my driveway the whole time... hell yes.. did it need to be towed to the dealer under the roadside service plan, hell yes.. will I ever lease a car with poor residual value again.. NO WAY.
Anyhow.. some points of interest:
If you drop the car off early, and don't make the payments (not the case in your post, but interesting, none the less..) they would consider that a voluntary repo.
Most leasing companies have an early lease termination penalty that runs about as much as the security deposit, so that insurance payment may be less than the early term pmt.
Most dealers and manufacturers WANT you to buy/lease another car, and at the dealer level will usually do what it takes to put you in a new car and not kill you on the lease turn in.
Good luck.
Anyhow.. some points of interest:
If you drop the car off early, and don't make the payments (not the case in your post, but interesting, none the less..) they would consider that a voluntary repo.
Most leasing companies have an early lease termination penalty that runs about as much as the security deposit, so that insurance payment may be less than the early term pmt.
Most dealers and manufacturers WANT you to buy/lease another car, and at the dealer level will usually do what it takes to put you in a new car and not kill you on the lease turn in.
Good luck.
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Others have posted their thoughts previously, bet here's my $.02
Handling is much improved due to: 17" wheels/tires (including now "standard" sport suspension), reduction in unsprung weight and better steering system. Road feel is much improved, altho still not "BMW-like".
NVH improvements = quieter interior.
6-disc in dash changer, standard.
ESP - standard.
Warranty now runs full 4 years-50k miles.
Altho steering wheel does not have radio controls, the steering wheel itself feels better in your hands. Not a big deal to reach over to the stereo to change stations or adjust volume.
Bose sounds somewhat better - bass not as muddy.
Probably more than these, but I have a suggestion. Take a test drive! You'll see in 1 minute what I mean. Good luck.
NVH improvements = quieter interior.
6-disc in dash changer, standard.
ESP - standard.
Warranty now runs full 4 years-50k miles.
Altho steering wheel does not have radio controls, the steering wheel itself feels better in your hands. Not a big deal to reach over to the stereo to change stations or adjust volume.
Bose sounds somewhat better - bass not as muddy.
Probably more than these, but I have a suggestion. Take a test drive! You'll see in 1 minute what I mean. Good luck.