i was thinking of refinancing my lease, meaning, doing a lease buyout through a 60 month auto loan at %5.09. The car is my 04 s4, I have had it for 3 months but feel terrible paying so much in lease payments(my payment are high) Do you guys think it is a wise thing to do? I am willing to keep it for 4-5 years.

 

Your going to lose money either way through lease payments or depreciation pick your poison. I have found that with the lower rates you can get 60 month notes close to 36 month leases and if you are going to keep it 4-5 years I personally think its worth the extra money to buy it. I don't know how Audi stuctures their leases, you need to find out what the payoff is and if sales taxes will be due if you convert it to a retail purchase.

 

what's your lease payment?

 

If you buy out your lease, you are essentially making ALL of your payments plus the buyback value--the same thing you'd be doing over the next few years anyway.

If you *finance* that amount (all payments+buyback) you'd pay double interest; the built-in interest in your lease (money factor) AND the interest of your new loan.

A properly structured lease is a very good way to obtain a vehicle, but leases are complex and dealers commonly take advantage of this complexity to, in turn, take advantage of their customers. It sounds like that may have happened to you and unfortunately there is no good way to get out of a bad lease unless you sell your vehicle to someone else for (hopefully) not too much less than you owe.

 

Hey thanks for the response, I guess you are right and didn't realize the double interest situation. I got into this lease with negative credit from my old leased s4 (14 months to go) and even though i negotiated the price down to 48.5k, they bought my car for -3500 of what my payoff was (26.5K), whcich was rolled into the lease, so the lease was calculated at over 52K. My paymets are 725+tax(2k driveoff) for 48(ouch). When do you think it would make sense to try and sell the car privately?(which is what I should have done with my old s4)2-3 years?

Thanks for your input!

 

Thanks for the response!

 

That doesn't look like an awful lease to me. It's hard to say when a good time to sell would be--you should search the classifieds and see what S4s like yours are going for and compare that to what you owe. It will not look good but...

...if you do the math on all of your payments+buyback, on a good lease the sum will actually be similar to what you would pay over 48 months of conventional financing. Not the same, but similar (the lease will be higher by approx. $900). My point is that maybe you should reconsider trying to get out of the lease; 45 months from now you can buy your car for the buyback value and own it. And you will have paid maybe $800-$1000 more than you would have if you'd financed--that's only the $$ of one payment.

In a lease, every one of your payments has the same interest to principal ratio. In the beginning, the car depreciates more quickly and hence the difference between what the car is worth and what you owe is quite large (in a bad way). But with each passing month, the car depreciates more and more slowly, allowing your payments to "catch up" with the value of the car until after, say, 48 months, the two meet at the buyback value. Unfortunately, you have your negative value from your old S4 built in, and you will never get that back.

So until the end of lease is a little closer, you will be "behind" your car and thus selling it would be a losing proposition. If you want to sell, I'd wait a few years and you will be better off.

 

not TOO bad of a deal, actually.