Lease ends in 11 months. Seeking Suggestions

[troyguitar]

And CC's lease relatively cheap. Less than GTI's in fact. My wifes CC (MSRP of $34,xxx) is just $10 more per month than my GTI (MSRP of $26,xxx). With the same assumptions and everything...

I will be buying out my GTI in July when it is up though...

I've noticed low lease prices on a lot of the more "luxury" cars but have not investigated the terms beyond that. Is the residual on the CC lease much higher to offset the payments?

You can also lease a $35k Cadillac, for example, for the same monthly rate as a $25k GTI. It is odd.

 

[ElectricEye]

And CC's lease relatively cheap. Less than GTI's in fact. My wifes CC (MSRP of $34,xxx) is just $10 more per month than my GTI (MSRP of $26,xxx). With the same assumptions and everything...

I will be buying out my GTI in July when it is up though...

I could lease a CC, and then get back into a MK7 if I still want one after that lease expires.
An A3 Sportback - which from the latest I've read is now coming stateside would (depending on price) solve this whole dilema.

 

[aj_law]

WELL... That depends on the car. VW simply predicts the residual value at the end and the entire lease is based on that contractual figure. IF they underestimated the residual, you can buy the car at lease end at the predetermined price and walk in to instant equity.

Not to mention how the owner maintains the vehicle. You can get to the end of a lease and the car is worth much more because it was kept in pristine condition, has low mileage, etc.

Difference between two cars coming off the same lease can be thousands...easily.

 

[McQueen77]

Doesn't matter how long the loan or what the rate is if we're talking about selling or trading it immediately, there will be very little interest paid.

You pay the sales tax either way, either on the buyout price or on the next car's purchase price.

It's cheaper because VW guessed low on the residual. I can turn in my lease for $350 or whatever the turn-in fee is, or I can buy it out for about $17k including tax and trade it in for $19k... How is that not cheaper?

its not cheaper because then you will essentially have paid the depreciation off + tax on the payments, + tax again on the purchase of the remaining balance, thus turning your $26k car into a $30k car, no? Im obviously using rough numbers here as I don't know what the capitalized cost was on your GTI, your money factor, anything..

also, the interest rate comparison doesn't add up anyway from C4L because if OP has good credit, he can get a money factor comparable to what we got which ends up being about .036% APR vs. best case financing on a used car which will be, at best 1.9%, if you are willing to finance for the shortest term possible thus making your monthly payments huge. or you can put money down on the remaining balance on the GTI/buyout, but then thats money you are sinking into a 3 year old GTI, which may or may not be fine, when you could just pocket the money and get into another lease. cash in hand will always be worth more than cash in a car, unless you are trying to lessen the long term hit of finance charges, which in OP's case, is irrelevant

i do agree that with the mileage factor and end condition of the car, you can definitely walk away with some equity whether its just cash in hand going into your new lease or buying out the car. if you get a vw or audi that $350 return fee is waived btw.

If you only drive 5k miles per year, VW is making an arm and leg on you when they resell the car if you turn it in. Why not take some of that profit and keep it for yourself?

I just dont think buying the existing car is 'keeping any profit for himself'. I totally agree with the bolded part, but a better option IMO would be to sell the car himself at lease end and keep the difference in equity i.e. cash in hand. OP just sounds like a good lease candidate to me. So if his GTI ends up being worth $2500 more than residual, he'd be better off having the $2500 and getting into another VW w/0 down for another 3 years vs. putting that $2500 into buying out his GTI.

 

[booey1979]

My GTI lease wraps up at the end of Dec. 2013.
Unfortunately, there will be no MK7 here in North America at that time - if there was, I would roll right into one.

So, I'm entertaining suggestions.
I want to stay with VW - or the Audi A3 Sportback should that come around in time and at a reasonable price.

My options:

Buy my GTI this requires a loan of about $16,000. It's Shadow Blue, and only has 10K miles on it in 25 months.

Buy my GTI and trade it in for a MK7 when the 7 shows up.

Lease a CC, which will have less rear seat room (for my now 11 year old twin boys) and cargo capacity than my GTI.

I'd like to hear from you, I've got almost a year to entertain suggestions...
I should add that I'm looking to hover at no higher than a sub 35K price point.

Thanks!

Lease another MK6 GTI.

Jeez that's hardly any miles! I'd keep it but then again I bought my 2011 used in 2012 with 10k miles.

 

[D Griff]

its not cheaper because then you will essentially have paid the depreciation off + tax on the payments, + tax again on the purchase of the remaining balance, thus turning your $26k car into a $30k car, no? Im obviously using rough numbers here as I don't know what the capitalized cost was on your GTI, your money factor, anything..

also, the interest rate comparison doesn't add up anyway from C4L because if OP has good credit, he can get a money factor comparable to what we got which ends up being about .036% APR vs. best case financing on a used car which will be, at best 1.9%, if you are willing to finance for the shortest term possible thus making your monthly payments huge. or you can put money down on the remaining balance on the GTI/buyout, but then thats money you are sinking into a 3 year old GTI, which may or may not be fine, when you could just pocket the money and get into another lease. cash in hand will always be worth more than cash in a car, unless you are trying to lessen the long term hit of finance charges, which in OP's case, is irrelevant

i do agree that with the mileage factor and end condition of the car, you can definitely walk away with some equity whether its just cash in hand going into your new lease or buying out the car. if you get a vw or audi that $350 return fee is waived btw.




I just dont think buying the existing car is 'keeping any profit for himself'. I totally agree with the bolded part, but a better option IMO would be to sell the car himself at lease end and keep the difference in equity i.e. cash in hand. OP just sounds like a good lease candidate to me. So if his GTI ends up being worth $2500 more than residual, he'd be better off having the $2500 and getting into another VW w/0 down for another 3 years vs. putting that $2500 into buying out his GTI.

So what you're saying is that VW will cut you a check worth the difference between the value and your contracted residual? What's the point of having a contracted residual then? Are you sure this is the case?

I agree with you that cash in hand is worth more, but I was under the impression that to get this cash in hand, you'd have to buy the car at the residual ($16k in this case) and then sell it for $19k or whatever and pocket that cash. I've never really looked into leasing though, so I could be mislead in this regard.

 

[ElectricEye]

Well, I'm still 11 months out - but I believe that I'm convinced that I'll continue to lease rather than buy out my car.
The idea of having signifigantly higher monthly payments to drive the car off warranty - or to stretch those paymnets out forever just doesn't appeal to me.

It would be so much easier to just walk into VW during Sign and Drive, and get myself into a CC or another MK6 with no money out of pocket or bank.
I'm in no way tired of the MK6, so who knows - maybe I'll roll into one December '13?

 

[nouse4aname]

Yes you have to buy out in order to get the equity. McQueens been drinking again or something.

Put it this way, who the hell wouldn't buy a 4 door dsg 2010 GTI with 15,000 miles for $16,000 right now, not sure what options but those are just gravy as 4 door dsg puts you in the black. Even if it was just to flip it and sell immediately. That's the equivalent of what you're looking at in a year.

To not do so is just giving the dealer thousands in profit with the only benefit to you being avoiding dealing with selling the car privately. Hell I bet you could walk into Carmax the same day as your buyout and turn a profit.

 

[D Griff]

Well, I'm still 11 months out - but I believe that I'm convinced that I'll continue to lease rather than buy out my car.
The idea of having signifigantly higher monthly payments to drive the car off warranty - or to stretch those paymnets out forever just doesn't appeal to me.

It would be so much easier to just walk into VW during Sign and Drive, and get myself into a CC or another MK6 with no money out of pocket or bank.
I'm in no way tired of the MK6, so who knows - maybe I'll roll into one December '13?

Yes you have to buy out in order to get the equity. McQueens been drinking again or something.

Put it this way, who the hell wouldn't buy a 4 door dsg 2010 GTI with 15,000 miles for $16,000 right now, not sure what options but those are just gravy as 4 door dsg puts you in the black. Even if it was just to flip it and sell immediately. That's the equivalent of what you're looking at in a year.

To not do so is just giving the dealer thousands in profit with the only benefit to you being avoiding dealing with selling the car privately. Hell I bet you could walk into Carmax the same day as your buyout and turn a profit.

That's what I thought. Don't give your $19-20k car back when you could have it for $16k. You could probably hop in it and drive down the road to the next VW dealer and sell it for $17k.

Say you just finance the $16k for 48 months. Your payment will probably be about $350 if you get a good interest rate. Then if you trade it in a year for a MK7 for say $14-15k you'll at least have a couple of thousand in equitty to roll into that car as apposed to nothing.

 

[nouse4aname]

Yeah, personally I'd keep it if it hasn't given you any problems. Not only is it a deal at $16k. You personally know the owner and how well it was taken care of.

I'm sure the dealer would be more than happy to sell you a 100k extended warranty and maintenance plan if that's a concern and it would still be a deal with that base price.

 

[C4L]

I've noticed low lease prices on a lot of the more "luxury" cars but have not investigated the terms beyond that. Is the residual on the CC lease much higher to offset the payments?

You can also lease a $35k Cadillac, for example, for the same monthly rate as a $25k GTI. It is odd.

In the case of the CC/GTI, the residual was slightly better but the money factor (interest rate) was also much better. They were just simply trying to sell more of them. And our negotiated sales price (cap cost) was better too. About 88% MSRP on the CC instead of appx. 93% on the GTI.

Cadi/Infiniit/BMW lease the lowest of the luxury makes. Audi actually leases among the worst. They offer the least amount of discounts and incentives.

So there are 3 key figures in leasing;
1 - residual value - this is contractual and cannot be negotiated but varies from model to model
2 - money factor - this is contractual and cannot be negotiated but varies from model to model.
3 - Cap Cost - Effective 'purchase price' - This CAN be negotiated and usually works out very favorably for the leasee because they are negotiating on the purchase price of the total car to be repaid on just the residual.

So lets use an actual example with hypothetical residual (I don't remember what it actually was on the CC);

CC Sport Plus - $34,xxx MSRP - Avg. Price Paid - $32,370. Say a $2,000 'discount' but in the case of a lease the residual doesn't change. So if you have a car with 50% residual which equates to $17k in this case. Negotiating from $34k to $32k represents an amount to repaid of $15k and not $17k while the residual remains $17k.

$2k off of $34k represents 6% off. Total payments on this amount would reflect a 6% decrease.
$2k off of $17k represents 12% off. Total payments on this amount would reflect a 12% decrease.

Same 'deal' on the same car but with twice the effect because you are only paying half the amount in this case.

 

[ElectricEye]

That's what I thought. Don't give your $19-20k car back when you could have it for $16k. You could probably hop in it and drive down the road to the next VW dealer and sell it for $17k.

Say you just finance the $16k for 48 months. Your payment will probably be about $350 if you get a good interest rate. Then if you trade it in a year for a MK7 for say $14-15k you'll at least have a couple of thousand in equitty to roll into that car as apposed to nothing.

The car is in fantastic shape - I treat it like I own it.
There is a skuff on the passenger side that can be very nearly buffed out, and I curbed one Detroit which I polished down to the point that you don't notice it until you get close.
Aside from that, the car is great.
It really would be a score at $16,000 with 15K on it.

But I really hate buying and selling cars.
I don't know if I have it in me to purchase the car, sell the car for the profit, and get myself in another car.
I'd have to decide if that is worth some two thousand dollars to me.

 

[troyguitar]

Here's my question, using ballpark numbers.

GTI $25k and CC $35k have same lease payment = $12k over 3 years.

If they both have 56% residual, that's GTI $14k and CC $19.6k

Total cost, excluding all other crap which is comparable for each then, is GTI $26k and CC $31.6k... one over MSRP one well under.

Are they just cool with making a lot less money on the CC?

 

[nouse4aname]

If a few thousand isn't worth a few hours of your time just turn it in. But that's a hell of a billing rate if you ask me.

At the very minimum, when it is time to turn in. Go get an appraisal at carmax, then get a loan to buy the car if the numbers look good at a local credit union. That would reduce the hassle to virtually nothing and I bet there's still a profit opportunity there. Or heck, use autotrader's online appraisal dealio.

 

[ElectricEye]

Here's my question, using ballpark numbers.

GTI $25k and CC $35k have same lease payment = $12k over 3 years.

If they both have 56% residual, that's GTI $14k and CC $19.6k

Total cost, excluding all other crap which is comparable for each then, is GTI $26k and CC $31.6k... one over MSRP one well under.

Are they just cool with making a lot less money on the CC?

I think they are ok with making less on the CC.
I took a cursorary look at them when I leased my GTI, and the salesman said that they lease favorably partly because they're easy to get rid of when the lease is up.
They move a lot of them.