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Old 02-29-2012, 03:07 PM   #57
Fiveflat
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Old 02-29-2012, 03:07 PM   #58
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Originally Posted by C4L View Post
Here ya go folks...

2012 Golf R Lease OFFER
- $469/mo for 36 months w/ $1,999 due at signing
- Based on MSRP of $35,810
- Lease-end Purchase - $20,403

2012 Golf R Purchase
- $680/mo for 60 months w/ $1,999 due at signing
- Based on MSRP of $35,810, 6% sales tax (MI) and 5% APR (national new car average)

Est. Residual Value - 3/65%, 4/55%, 5/45% - KBB.com

NOW, on average the customer can expect to pay 92% of MSRP. (I paid 93% on my GTI and 88% on my CC. I negotiate like crazy...haha). Lets figure 95% because it is an R. Should be obvious that no one pays sticker.

SO, how that changes things is that on the lease, the pre-determined residual remains the same but the purchase price is reduced to a factor of 95% of MSRP.

NEGOTIATED Golf R Lease
- Based on purchase price of $34,019 (95% of $35,810 MSRP)
- Lease-end Purchase - $20,403

That now only leaves $13,616 BEFORE the $1,999 due at signing to be paid or $11,617 over 36 months.

Negotiated payments = $322/mo - AMAZING due to the high 60% pre-calculated residual on the car (highest I have ever seen actually from a manufacture) and paying 95% MSRP. Add 6% sales tax (MI) and your payments are at $341.31/mo for 36 months on a Golf R at 95% MSRP negotiated.

Paying the same 95% on a purchase would result in financing $34,061 over 60 months (national average) at 5% APR (national average) and 6% sales tax (MI).

Negotiated Purchase Payments = $642.77
Negotiated Lease Payments = $341.31

$642.77 x 60 = $38,566 - $16,114 (60 month ESTIMATED residual value) = $22,452 TOTAL COST over 5 years
$341.31 x 36 = $12,287 TOTAL COST over 3 years

Now, to adjust for the time differences we would just break this 60 month and 36 month total cost to a common denominator of 'per month cost'.

Purchase = $22,452 / 60 months = $374/mo
Lease = $12,287 / 36 = $341.31/mo

AND, of course you need to keep in mind that on the purchase scenario, you will have the car for 2 years OUT of warranty and free maintenance. That means no tires, no 40k service (a big one), no brakes, nothing on the lease.

AND...

One additional thing that I do personally to ensure this is even more advantageous;

$643/mo - $341/mo = $302 EXTRA. That is money I save the WHOLE time.

If I can't afford to purchase the car, I won't lease it either. I have that money available so I save it.

The problem that people find themselves in is that instead of considering a lease or purchase of the same $35k car, they will consider the purchase of a $35k car or a lease of a $45k car. Thus allocating the same monthly payment, NOT netting the same car.

Leasing a car at $643/mo is far worse than buying a car at $643/mo. from a purely financial standpoint.
Leasing a car at $341/mo is much better than buying the same car at $643/mo...

Honestly, not being a douche here but let me know if any of this seems wrong or doesn't make sense or if I just missed or failed to consider something.
Excuse me but WTF is the point of all this??? 341 a month? No shit that's a better deal.

The deal in question is $469 a month!! What was the point of you trying to prove that something less than 469 a month is a better deal.

We were CLEARLY stating that $469 a month was the issue at hand not the fictitious calculated lease figure you came up with. No way will a dealer agree on 341 a month when a GTI "special" deal is 279, given that the R is a full 12k MORE expensive.
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Old 02-29-2012, 03:09 PM   #59
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In addition we're talking APPLES TO APPLES. Owning a NEW R for 3 years and LESS than 36k miles vs leasing it for the same amount of time.
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Old 02-29-2012, 03:10 PM   #60
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If you assume calculations on $469 then your MATH must assume a full sales price of MSRP, because that's what the 469 number is based off as well.

Apples vs. Apples.
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Old 02-29-2012, 03:12 PM   #61
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Quote:
Originally Posted by maxtdi View Post
Excuse me but WTF is the point of all this??? 341 a month? No shit that's a better deal.

The deal in question is $469 a month!! What was the point of your trying to prove that something less than 469 a month is a better deal.

We were CLEARLY stating that $469 a month was the issue at hand not the fictitious calculated lease figure you came up with. No way will a dealer agree on 341 a month when a GTI "special" deal is 279, given that the R is a full 12k MORE expensive.
NO ONE PAYS STICKER FOR A CAR...

The $469/mo is assuming sticker was paid.
Same with the GTI offer.

If you run the numbers on their 'advertised' offers you will see that they are done at 100% MSRP.

On average you can expect to pay 92% MSRP. I paid 93% on my GTi and 88% on my CC. You of course need to negotiate this, they will not just give it to you.

My scenario used an acquisition cost of 95% MSRP for BOTH the finance and lease.

Negotiation is a HUGE part of a quality lease. The residual (lease buy-out option) is fixed so regardless what the purchase price is, that stays. This can yield HUGE effects if you are only paying, in this case, 40% of the value of the car.

This is a scenario I have put in to practice MANY times now.

And you are failing to consider residual values. That is essentially the ONLY cost you incur when you lease. The MSRP means little. The residual does.

Example;
Golf R - Leasing with a 60% residual
GTI - Leasing with a 55% residual

So like this;

$35k Golf R = $21,000 residual at lease end or $14,000 of payments.
$30k GTI = $16,500 residual at lease end or $13,500 of payments.

Just a mere difference of $500 or $13.88/month on a $5,000 more expensive car.

RESIDUAL VALUE IS HUGE in leasing. It almost solely determines the price.

And one thing I have found with recent VW's is that they are conservative in their est. residual values. What that means is that if you finance at lease end you can come out with instant equity.

For example, on my MKV. I leased it for 36 months and they told me I would owe $12,800. It was worth appx. $14,500 at that point. I contracted to buy it (negotiating that purchase price too down to $11,900) and was able to turn around and sell it immediately for a $2,000 PROFIT AFTER COSTS. All the while only paying lower lease payments during the previous 3 years.

Last edited by C4L; 02-29-2012 at 03:22 PM.
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Old 02-29-2012, 03:12 PM   #62
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If you assume calculations on $469 then your MATH must assume a full sales price of MSRP, because that's what the 469 number is based off as well.

Apples vs. Apples.
I assumed the same 95% acquisition cost for both scenarios. The same price was paid for the car in any event.
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Old 02-29-2012, 03:13 PM   #63
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The "SPECIAL" means you can't negotiate on that... otherwise you wouldn't be getting a "special". That's like negotiating a .9% APR. It is the final figure.

Nothing you stated in this thread makes any sense.
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Old 02-29-2012, 03:20 PM   #64
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I assumed the same 95% acquisition cost for both scenarios. The same price was paid for the car in any event.
I know, I was only proving your point that you are basically comparing apples to apples.

Oh yea, I negotiated my lease price and residual on my Golf too... on a "promotional" lease offer.
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Old 02-29-2012, 03:20 PM   #65
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The "SPECIAL" means you can't negotiate on that... otherwise you wouldn't be getting a "special". That's like negotiating a .9% APR. It is the final figure.
One CAN negotiate on a lease "special". Just last year my partner went in for a Jetta for the $199 special and $1999 due at signing. That was for an "S", but we wanted an SE with Convenience and Sunroof. They quoted us $412.

After 4 hours of negotiation, we got the lease to $312 including tax, title, license, ZERO down AND $800 of negitive equity in 330CI.

You can negotiate a lease "special" because there is more to the lease than the cost of borrowing money. The cap reduction cost (price paid) is a HUGE factor.
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Old 02-29-2012, 03:23 PM   #66
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The second you go over on miles, you are f'ed...

PLEASE keep that in mind.
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Old 02-29-2012, 03:24 PM   #67
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Quote:
Originally Posted by maxtdi View Post
The "SPECIAL" means you can't negotiate on that... otherwise you wouldn't be getting a "special". That's like negotiating a .9% APR. It is the final figure.

Nothing you stated in this thread makes any sense.
That is wrong. It is calculated at 100% MSRP. BOTH of my cars were leased on 'special' and negotiated to 93% and 88% MSRP, as I have said.

Its called marketing/advertising. Say hello to it.

Just because it doesn't make sense does it mean it is incorrect in any way. Find fault in what I said and I will gladly address it.
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Old 02-29-2012, 03:25 PM   #68
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The second you go over on miles, you are f'ed...

PLEASE keep that in mind.
One can always purchase more during the lease or pay at the end. For the Jetta, it's only $0.10 a mile. Much cheaper than BMW! HA!
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Old 02-29-2012, 03:28 PM   #69
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ahhh the leasing debate...

for many..the low down payment and fairly low monthly is very tempting..

for the dealer its a godsend..they can actually "sell" the car twice..

the real negative is..you never "own" it..

if your a corporation leasing is the way to go..it can be alclose to a total write off..if your creative you can even get a tax break on the lease..not easy to do but i have seen it done..

i buy with 60 mo financing...and pay it off in 36..the numbers vary year to year..but my average finance charge over the last 15 years of car purchases is approx 3.5%..which im willing to..

i take care of my cars..if you do the required maintenance few problems should arise in the first five years..10/12k yr..

i just prefer to own the car and am able to get a new one every 5 years (30-35k range)

the new mustang gt is tempting me now with 0% APR 36 mo..$361/mo pmt .. yes a large down..but with trade in allowance taken in.. not far from the ideal "lease"...and in 3yrs..its mine..
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Old 02-29-2012, 03:29 PM   #70
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Quote:
Originally Posted by C4L View Post
Here ya go folks...

2012 Golf R Lease OFFER
- $469/mo for 36 months w/ $1,999 due at signing
- Based on MSRP of $35,810
- Lease-end Purchase - $20,403

2012 Golf R Purchase
- $680/mo for 60 months w/ $1,999 due at signing
- Based on MSRP of $35,810, 6% sales tax (MI) and 5% APR (national new car average)

Est. Residual Value - 3/65%, 4/55%, 5/45% - KBB.com

NOW, on average the customer can expect to pay 92% of MSRP. (I paid 93% on my GTI and 88% on my CC. I negotiate like crazy...haha). Lets figure 95% because it is an R. Should be obvious that no one pays sticker.

SO, how that changes things is that on the lease, the pre-determined residual remains the same but the purchase price is reduced to a factor of 95% of MSRP.

NEGOTIATED Golf R Lease
- Based on purchase price of $34,019 (95% of $35,810 MSRP)
- Lease-end Purchase - $20,403

That now only leaves $13,616 BEFORE the $1,999 due at signing to be paid or $11,617 over 36 months.

Negotiated payments = $322/mo - AMAZING due to the high 60% pre-calculated residual on the car (highest I have ever seen actually from a manufacture) and paying 95% MSRP. Add 6% sales tax (MI) and your payments are at $341.31/mo for 36 months on a Golf R at 95% MSRP negotiated.
I'm confused on how it goes from $469/mo to $341/mo
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