Audi Lease Question ...
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New Member
Joined: Dec 2004
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Audi Lease Question ...
Just a question to those that have executed a lease under the Audi Lease Program. Typically, the Rent Charge (Finance Fee) is calculated by adding the Net Capitalized Cost (NCC) to the Residual (R) and multiplying by the Money Factor (MF).
Thus,
Rent Charge = (NCC + R) * MF (which is .00055)
By NCC, I am referring to the sales price with the various fees, MINUS THE DOWN PAYMENT (cap cost reduction).
The dealer has told me that the Audi Lease program does not subtract the down payment in calculating the Rent Charge. The dealer is using the Capitalized Cost (CC), that is the sales price with various fees before the down payment is applied. Thus, you are paying interest on funds not loaned (down payment). Is this the way that Audi handles all of their leases?
This is known in leasing circles as the single payment ripoff if you attempt to pay for the entire lease upfront. That is, they would still be charging interest on the single large payment you make, despite the fact that these funds were not loaned. But in the case of a single payment, the RC should become (R + R) * .00055. That is, the NCC would equal the Residual (R). But the way the dealer states that Audi runs the program, it would be (CC + R) * .00055.
Thanks,
Brian
Thus,
Rent Charge = (NCC + R) * MF (which is .00055)
By NCC, I am referring to the sales price with the various fees, MINUS THE DOWN PAYMENT (cap cost reduction).
The dealer has told me that the Audi Lease program does not subtract the down payment in calculating the Rent Charge. The dealer is using the Capitalized Cost (CC), that is the sales price with various fees before the down payment is applied. Thus, you are paying interest on funds not loaned (down payment). Is this the way that Audi handles all of their leases?
This is known in leasing circles as the single payment ripoff if you attempt to pay for the entire lease upfront. That is, they would still be charging interest on the single large payment you make, despite the fact that these funds were not loaned. But in the case of a single payment, the RC should become (R + R) * .00055. That is, the NCC would equal the Residual (R). But the way the dealer states that Audi runs the program, it would be (CC + R) * .00055.
Thanks,
Brian
Senior Member
Joined: Apr 2004
Posts: 5,420
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They are incorrect.
The rent charge is based on the amount you borrow. If what they told you were true, then there would be absolutely ZERO reasons to apply a down payment since you are charged to "rent" money that you're not renting.
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Re: Audi Lease Question ...
Well, I bought the A4 I was leasing when I bought my S4 last month, so I can relate a direct experience. They credited the "rent factor" to me because I bought the lease out early.
I can't seem to find the lease so i can't verify that the document requires Audi to do this, but if they didn't have to, I'm sure they would not have offered it up (I hadn't pushed the issue, i just asked for a buyout quote and it was a seperate line item credit).
I can't seem to find the lease so i can't verify that the document requires Audi to do this, but if they didn't have to, I'm sure they would not have offered it up (I hadn't pushed the issue, i just asked for a buyout quote and it was a seperate line item credit).
Thread Starter
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Joined: Dec 2004
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Re: They are incorrect.
That was exactly my point to them (dealer). Their reply was that this is the way that the Audi lease program calculates the rent charge. In other words, it was "out of their control". I was hoping that someone who has leased through Audi can contradict that statement and affirm that Audi does not calculate the lease charge in such a way. That it is the dealer, in the instance, that is padding the rent charge.
Thanks for the reply.
Brian
Thanks for the reply.
Brian
Senior Member
Joined: Apr 2004
Posts: 5,420
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I cannot provide you with those documents, but I can direct you here:
This site will provide you with the most competitive leases out there in about 1 minute. I've used this company three times.<ul><li><a href="http://leasecompare.com/">http://leasecompare.com/</a</li></ul>
AudiWorld Super User
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Something similar happened to me...
I was actually leasing my A4 and I broke that lease to lease the S4, and even I was with negative equity (upside-down) I got quite a few money credited to me because of the rent-factor, so at the end it only cost me $750 to get out of that lease due the negative equity still in place. That was part of the little money down I put to drive out my S4.
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