Should I purchase my end-of-lease Audi A4?

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Tirebiter
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Should I purchase my end-of-lease Audi A4?

Post by Tirebiter »

My lease is ending soon on my 2017 Premium Plus Audi A4. It has 26k miles on it. Residual is now just under $27k, which is slightly higher (maybe about $1k higher) than the listed sales price of A4s with similar specs and mileage in my area. I have really enjoyed this car for the last 3 years and was assuming I would just purchase it at the end of the lease term, as I have maintained it well and it is in near-pristine condition. I actually like it better than the newer A4s.

The wrinkle, as of late, is that I am barely driving. My wife and I have both been working from home due to the Covid shelter in place rule. I work for a large corporation and can perform my job at almost 100% effectiveness remotely (although I'm not sure if my employer would agree with that). I have driven the car maybe 3 times in the last 2 months, never for more than 10 miles. We already own a second car.

I can afford to buy the car without any detrimental impact on my savings plan for the time being. But I am wondering whether it might be smarter to just let the car go, wait until I need to commute to work again (no idea when that will be) and then shop for a different vehicle.

I don't think there's any clear right or wrong answer here, but would welcome any thoughts on additional factors I might want to consider.
adamthesmythe
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Re: Should I purchase my end-of-lease Audi A4?

Post by adamthesmythe »

Let it go while you still have pleasant memories.
GoldenFinch
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Re: Should I purchase my end-of-lease Audi A4?

Post by GoldenFinch »

My Audi, bought after a three year lease, was a disaster. It ended up having continuous mechanical problems. Maybe it was just a lemon, but it was a bad experience.
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Tirebiter
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Re: Should I purchase my end-of-lease Audi A4?

Post by Tirebiter »

Thank you Adam and Golden. Out of curiosity, what year Audi’s did you have?
Skiandswim
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Re: Should I purchase my end-of-lease Audi A4?

Post by Skiandswim »

I would let the lease end and look to purchase another car later. After owning several Audis, the cost of repair is now well above industry average. I was fortunate to have a reasonable local mechanic and cars with below average problems (not risking it again).

Residual values for used cars dropped 9.2% YOY in April. As more new cars "age" on dealer lots and leased cars are returned, there will be additional pressure to discount. You might be able to get a great deal in a month!

https://publish.manheim.com/en/services ... index.html
GoldenFinch
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Re: Should I purchase my end-of-lease Audi A4?

Post by GoldenFinch »

Tirebiter wrote: Sun May 10, 2020 7:46 pm Thank you Adam and Golden. Out of curiosity, what year Audi’s did you have?
Mine was 2008, which was a long time ago, but the memories of taking the car into the dealer are fresh in my mind. I really loved many aspects of the car itself, but it was so unreliable and very expensive to maintain. Maybe I was just unlucky and they have improved over the years.
khram
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Re: Should I purchase my end-of-lease Audi A4?

Post by khram »

This experience has taught me even more so not to purchase expensive cars. I drive a 10-year-old Camry. Because it's old, registration is not too expensive (it's based on car value here), insurance is cheaper, etc. Even if I did 0 driving for a whole year, with insurance and registration it would cost me over (on average) $100/month to own a useless vehicle which was paid off a decade ago. Much more if I had a nicer car. Over $200/month on average during a year when I am driving on a daily basis.

I haven't been driving at all since I WFH now, and even before, I pretty much just drove to work and gym. There were moments when I thought about selling it in a couple years and picking up an Audi or some other nicer car. I'm not a car guy, actually don't know what kind of car I would get. But there have been a couple times when I've rented a nicer car or a truck for a road trip which was fun to drive, and that filled my fix.

Now I expect to drive this thing into the ground whether that's 2 more years or 5 more years. I'm not sure if I will buy another Camry then or some other car. I will most likely go back and forth on this in my mind many times over the next few years.

Don't have any specific advice about Audis, other than the few times I've driven them, I didn't much enjoy the drive, I couldn't see as much as I could with my Camry, and I hear they're very expensive to maintain.
smalliebigs
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Re: Should I purchase my end-of-lease Audi A4?

Post by smalliebigs »

Maybe I'm an outlier, but I would just keep leasing another vehicle. You would always be in warranty and be worry free. And you could also try out new vehicles every couple of years.
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Re: Should I purchase my end-of-lease Audi A4?

Post by Jags4186 »

Given the current economic situation, unless you are financially independent, I would not purchase a $27k vehicle ($30k after taxes and fees likely).

If you are a two vehicle household you likely can go down to 1 car for the time being. If you need a second car suddenly, you likely can get a new car same day.
zlandar
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Re: Should I purchase my end-of-lease Audi A4?

Post by zlandar »

Nope. You get to walk away from a car with a very high maintenance and repair cost.
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midareff
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Re: Should I purchase my end-of-lease Audi A4?

Post by midareff »

I suspect they, the leasing company, have more cars than they want to sell in today's market. Maybe way more. ... How about offer them $20K as a buyout and be prepared to move up 1 or 2K to complete the deal. It just might be worth a couple to a few thousand under current wholesale for them to not have another vehicle in inventory they have to prep and sell. If they won't make a truly sweet deal walk from it.
FishTaco
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Re: Should I purchase my end-of-lease Audi A4?

Post by FishTaco »

zlandar wrote: Mon May 11, 2020 7:40 am Nope. You get to walk away from a car with a very high maintenance and repair cost.
+1

Also, there are some really good deals out there right now on both new and used cars - particularly used.
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Helo80
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Re: Should I purchase my end-of-lease Audi A4?

Post by Helo80 »

midareff wrote: Mon May 11, 2020 7:48 am I suspect they, the leasing company, have more cars than they want to sell in today's market. Maybe way more. ... How about offer them $20K as a buyout and be prepared to move up 1 or 2K to complete the deal. It just might be worth a couple to a few thousand under current wholesale for them to not have another vehicle in inventory they have to prep and sell. If they won't make a truly sweet deal walk from it.

It does not work that way. (though, these are COVID times so all the rules are out the window).

OP can certainly try to negotiate with the lessor, but probably a 90% chance (I'd say 98 to 99% chance if these were non-COVID times) they'll tell him to surrender the vehicle if he's not interested in it.

Insurance policies are going to kick in if the Audi is seriously upside down. That's why the lessors don't care about making a truly sweet deal.


@ OP --- I would also advise to surrender the vehicle. German cars are better to lease than own. Unfortunately, many historical examples have given the country a bad reputation for maintenance track records.

Also, if you do call to "negotiate", tell us how quickly they tell you "no".
Last edited by Helo80 on Mon May 11, 2020 7:58 am, edited 1 time in total.
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cableguy
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Re: Should I purchase my end-of-lease Audi A4?

Post by cableguy »

See if you can keep leasing it another year. Keep the car....same payments....one more year....and then give it back. I've done it before with a Honda.
smalliebigs
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Re: Should I purchase my end-of-lease Audi A4?

Post by smalliebigs »

I will also add another angle to this: the industry internal benchmarks via 3rd party companies have BMW at #1 reliability when we compared our company's warranty spending and initial quality stuff to others. So take that for what it's worth. People tend to have impressions of brands that were probably only true 10, or even 20 years ago.

That said, I would recommend leasing, if nothing else, for peace of mind reasons.
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midareff
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Re: Should I purchase my end-of-lease Audi A4?

Post by midareff »

Helo80 wrote: Mon May 11, 2020 7:54 am
midareff wrote: Mon May 11, 2020 7:48 am I suspect they, the leasing company, have more cars than they want to sell in today's market. Maybe way more. ... How about offer them $20K as a buyout and be prepared to move up 1 or 2K to complete the deal. It just might be worth a couple to a few thousand under current wholesale for them to not have another vehicle in inventory they have to prep and sell. If they won't make a truly sweet deal walk from it.

It does not work that way. (though, these are COVID times so all the rules are out the window).

I guess I will just have to disagree having done it myself both personally and professionally while still employed.

OP can certainly try to negotiate with the lessor, but probably a 90% chance (I'd say 98 to 99% chance if these were non-COVID times) they'll tell him to surrender the vehicle if he's not interested in it.

Insurance policies are going to kick in if the Audi is seriously upside down. That's why the lessors don't care about making a truly sweet deal.


@ OP --- I would also advise to surrender the vehicle. German cars are better to lease than own. Unfortunately, many historical examples have given the country a bad reputation for maintenance track records.

Also, if you do call to "negotiate", tell us how quickly they tell you "no".
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8foot7
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Re: Should I purchase my end-of-lease Audi A4?

Post by 8foot7 »

I truly believe if you like driving an Audi you should just continue to lease new Audis every three years and just call it what it is, a luxury purchase.
The BH way is to drive a paid off Camry (or lately I guess it's these Subarus) for 20 years. If you like a luxury car and can afford a lease payment alongside maxing out tax-advantaged space and you have an emergency fund and a job that is as secure as you can assess it to be these days, then I'd look for a great lease deal on a new Audi. When you buy it at 3 years old, you're buying it when it (a) starts to go south electronically and mechanically and (b) you begin to be on the hook for fixing it all. If you are tired of the payment, then I'd take your 27k and buy a nicer used Japanese vehicle or something more reliable. If the payment doesn't bother you, especially if you can run it through a business, then I'd turn it in and get a new Audi on another lease when you get back to driving.
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Re: Should I purchase my end-of-lease Audi A4?

Post by Helo80 »

midareff wrote: Mon May 11, 2020 8:06 am I guess I will just have to disagree having done it myself both personally and professionally while still employed.
What models and what year? Lessors literally buy insurance policies for these sorts of situations.

Anything is possible, I suppose.
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Re: Should I purchase my end-of-lease Audi A4?

Post by midareff »

Helo80 wrote: Mon May 11, 2020 8:30 am
midareff wrote: Mon May 11, 2020 8:06 am I guess I will just have to disagree having done it myself both personally and professionally while still employed.
What models and what year? Lessors literally buy insurance policies for these sorts of situations.

Anything is possible, I suppose.
I've negotiated off lease deals both for myself and when I was in the Rent-A-Car business for the company, also negotiated deals more favorable than pre-established guaranteed buyback pricing deals for heavy equipment at contract expiration when I was involved in that side for municipal fleets. The real point here is that IF the lease's depreciation was calculated to terminate at a residual value far in excess of today's market value any smart company would be willing to negotiate a price to mutual advantage. Not only does it save them taking in a vehicle at a book price they must loose on, but they avoid the costs of prep, transportation and auction costs, if they auction, or lot float costs and warranty exposure to cover as well if they try to retail, that they avoid. The off lease process is not free, it is full of additional time and costs to the lessor. OTOH, there are times when the actual real world monthly depreciation of a leased vehicle can result in a residual resale value that may be far above what the buy out option price is, which can make it important to have first call option to buy. Even if you don't want to keep the car you can sell it and make some money. There are lots of possibilities in the car buying and leasing business for an educated consumer.
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Re: Should I purchase my end-of-lease Audi A4?

Post by apex84 »

If you're able to share, where do the other luxury brands fall (BMW, MB, Audi, Lexus, Acura, Jaguar, Alfa Romeo, etc.)?
smalliebigs wrote: Mon May 11, 2020 8:02 am I will also add another angle to this: the industry internal benchmarks via 3rd party companies have BMW at #1 reliability when we compared our company's warranty spending and initial quality stuff to others. So take that for what it's worth. People tend to have impressions of brands that were probably only true 10, or even 20 years ago.

That said, I would recommend leasing, if nothing else, for peace of mind reasons.
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Re: Should I purchase my end-of-lease Audi A4?

Post by smalliebigs »

apex84 wrote: Mon May 11, 2020 9:54 am If you're able to share, where do the other luxury brands fall (BMW, MB, Audi, Lexus, Acura, Jaguar, Alfa Romeo, etc.)?
That was shared sometime in Jan or Feb, so I'm not going to remember many details. If I recalled correctly, BMW was 1, Jaguar was last at 15. Lexus and Acura were quite good, but probably not top 5. Alfa Romeo was in the bottom half.

The rest, I really cannot recall, or claim to recall.
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Re: Should I purchase my end-of-lease Audi A4?

Post by Helo80 »

midareff wrote: Mon May 11, 2020 8:43 am I've negotiated off lease deals both for myself and when I was in the Rent-A-Car business for the company, also negotiated deals more favorable than pre-established guaranteed buyback pricing deals for heavy equipment at contract expiration when I was involved in that side for municipal fleets. The real point here is that IF the lease's depreciation was calculated to terminate at a residual value far in excess of today's market value any smart company would be willing to negotiate a price to mutual advantage. Not only does it save them taking in a vehicle at a book price they must loose on, but they avoid the costs of prep, transportation and auction costs, if they auction, or lot float costs and warranty exposure to cover as well if they try to retail, that they avoid. The off lease process is not free, it is full of additional time and costs to the lessor. OTOH, there are times when the actual real world monthly depreciation of a leased vehicle can result in a residual resale value that may be far above what the buy out option price is, which can make it important to have first call option to buy. Even if you don't want to keep the car you can sell it and make some money. There are lots of possibilities in the car buying and leasing business for an educated consumer.


I appreciate the further clarification, though I'm honestly ignorant on fleet and heavy equipment leasing/sales. From my very limited understanding of heavy equipment is that during bad economic times (e.g. 2009) where construction plummeted, stuff like big caterpillar trucks took a huge hit.

The thing is, for what us BHs buy.... normal consumer sales.... most leasing companies (usually through the factory's in-house financing company), have every incentive to get the RV as accurate as possible. If they calculate the monthly payments too high (and create too much equity in the vehicle), then lease rates will not be attractive compared to competition as they'll be a couple of hundred dollars higher. If they calculate monthly payments too low, then sure, leasing will look awesome, but they'll be underwater on the vehicle at lease turn on creating a situation that you describe above.

It's not unheard of that lessors will negotiate the 10-day payoff value, but it's heavily against the consumer whom retains the first right of refusal. There are insurance products sold to leasing companies to cover upside down RVs like what is happening now with used prices.
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Re: Should I purchase my end-of-lease Audi A4?

Post by apex84 »

Thanks!
smalliebigs wrote: Mon May 11, 2020 9:58 am That was shared sometime in Jan or Feb, so I'm not going to remember many details. If I recalled correctly, BMW was 1, Jaguar was last at 15. Lexus and Acura were quite good, but probably not top 5. Alfa Romeo was in the bottom half.

The rest, I really cannot recall, or claim to recall.
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Re: Should I purchase my end-of-lease Audi A4?

Post by smalliebigs »

So if you're keen on a Jaguar F-Type, for example, lease would be the way to go.
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Re: Should I purchase my end-of-lease Audi A4?

Post by delamer »

Any chance it would make sense to sell the other car and keep the Audi?
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Re: Should I purchase my end-of-lease Audi A4?

Post by midareff »

Helo80 wrote: Mon May 11, 2020 10:00 am
midareff wrote: Mon May 11, 2020 8:43 am I've negotiated off lease deals both for myself and when I was in the Rent-A-Car business for the company, also negotiated deals more favorable than pre-established guaranteed buyback pricing deals for heavy equipment at contract expiration when I was involved in that side for municipal fleets. The real point here is that IF the lease's depreciation was calculated to terminate at a residual value far in excess of today's market value any smart company would be willing to negotiate a price to mutual advantage. Not only does it save them taking in a vehicle at a book price they must loose on, but they avoid the costs of prep, transportation and auction costs, if they auction, or lot float costs and warranty exposure to cover as well if they try to retail, that they avoid. The off lease process is not free, it is full of additional time and costs to the lessor. OTOH, there are times when the actual real world monthly depreciation of a leased vehicle can result in a residual resale value that may be far above what the buy out option price is, which can make it important to have first call option to buy. Even if you don't want to keep the car you can sell it and make some money. There are lots of possibilities in the car buying and leasing business for an educated consumer.


I appreciate the further clarification, though I'm honestly ignorant on fleet and heavy equipment leasing/sales. From my very limited understanding of heavy equipment is that during bad economic times (e.g. 2009) where construction plummeted, stuff like big caterpillar trucks took a huge hit.
Also all forms of construction and equipment used for trash collection and disposal, all brands besides Cat. Think about this, if you were an equipment dealer and you were on the hook to buy back a dozen medium loaders at $40K each and there was no market above at that time over $10K each what would you do if the municipality offered to keep them and you give them $30K each. Would you rather carry $480K of finance credit and it's interest charges to keep them on your lot and hope to sell them?

The thing is, for what us BHs buy.... normal consumer sales.... most leasing companies (usually through the factory's in-house financing company), have every incentive to get the RV as accurate as possible. If they calculate the monthly payments too high (and create too much equity in the vehicle), then lease rates will not be attractive compared to competition as they'll be a couple of hundred dollars higher. If they calculate monthly payments too low, then sure, leasing will look awesome, but they'll be underwater on the vehicle at lease turn on creating a situation that you describe above.
I think that most individuals are more or less lost when looking at a lease for a vehicle they have already (generally) selected. Lease capitalized cost, monthly depreciation, residual value and first call option to buy are mostly foreign concepts to most individual buyers, even the more astute ones, and almost all of those numbers are negotiable.

It's not unheard of that lessors will negotiate the 10-day payoff value, but it's heavily against the consumer whom retains the first right of refusal. There are insurance products sold to leasing companies to cover upside down RVs like what is happening now with used prices.

I don't agree it's "heavily against" as an everyday occurrence. It's like any other monetary transaction, it's either paid down too far or it isn't and all of this will vary by what particular company, or lessor if you will, the dealer uses for the transaction. Generally, they have more than one available and the dealership and writer at the dealership get a per vehicle incentive.
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Re: Should I purchase my end-of-lease Audi A4?

Post by Goal33 »

I'd take advantage of your unique ability to seamlessly transition to a 1 car household along with the associated cost savings. Get a new car in a few months or later.
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Re: Should I purchase my end-of-lease Audi A4?

Post by Helo80 »

midareff wrote: Mon May 11, 2020 10:18 am I don't agree it's "heavily against" as an everyday occurrence. It's like any other monetary transaction, it's either paid down too far or it isn't and all of this will vary by what particular company, or lessor if you will, the dealer uses for the transaction. Generally, they have more than one available and the dealership and writer at the dealership get a per vehicle incentive.

You do realize that insurance is sold to leasing companies to protect against major loss on the vehicle in the event of market changes, right?

That's why I kind of question that you're suggesting $20k offer when the car is booking for $28k at retail... (and I realize I'm completely missing the wholesale price on the vehicle and we'd have to look at manheim data for that one)
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Re: Should I purchase my end-of-lease Audi A4?

Post by stimulacra »

Great time to walk away.

How much would an Uber ride cost for your area? Or the occasional Turo or weekend rental?

With less demand for commuter-mileage and less likely wear-and-tear on vehicles in the near future, I would suggest that now is a great time to try out a fun cheap weekend car as your primary; Mazda Miata, Jeep Wrangler, and old pickup truck.

About 70% of the driving I've been doing lately has been pleasure driving at around sunset. Low traffic, minimal social contact exposure, nice gorgeous weather, gets us out of the house for a bit, it's fun to cruise and explore the city without a set agenda. I'm sure your off-lease Audi does this very well but you can do it equally as well for a fraction of the cost.
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Re: Should I purchase my end-of-lease Audi A4?

Post by JackoC »

GoldenFinch wrote: Mon May 11, 2020 2:11 am
Tirebiter wrote: Sun May 10, 2020 7:46 pm Thank you Adam and Golden. Out of curiosity, what year Audi’s did you have?
Mine was 2008, which was a long time ago, but the memories of taking the car into the dealer are fresh in my mind. I really loved many aspects of the car itself, but it was so unreliable and very expensive to maintain. Maybe I was just unlucky and they have improved over the years.
My brother had an early 2000's A4, also lots of trouble. But, the 2017 A4 per Consumer Reports got 5/5 on reliability 'much better than average'. Cost of repair of brands like Audi tends to be higher than 'mass market' for things that eventually need to be done on any car, or to repair something off warranty you wouldn't expect to have to fix if that happens, IOW 'reliability'. But the reliability rating of A4 recently is good per CR.

Reliability for an individual car, not a model or brand, is much less predictable. But having owned and driven a car you at least know how it's been treated, and to some degree it may have given you inklings if it's an individual lemon.

Not an Audi person personally (I like BMW's lately) but if you like it and purchase option is reasonably attractive relative to market I'd keep it. Any other transaction you go through has somebody making more money from you, of else they wouldn't be doing the transaction. And speaking of me and BMW's the 2015 328i I bought outright in 2014 had essentially no problems through 2018 when I sold it to my son, none so far since. He knows it might eventually, like any car, and it could be expensive. But it wouldn't be a lot of money in the big picture for somebody who's doing well (I frankly preferred to entice him with that car rather than a new BMW he might otherwise have bought). My 2018 M2 has had no serious problem so far either. If it does in the future, you know what, I'll get it fixed :happy . It's a super fun car to drive, glad I have it.
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Re: Should I purchase my end-of-lease Audi A4?

Post by JAZZISCOOL »

GoldenFinch wrote: Sun May 10, 2020 7:01 pm My Audi, bought after a three year lease, was a disaster. It ended up having continuous mechanical problems. Maybe it was just a lemon, but it was a bad experience.
I had an Audi A-4 T lemon bought gently used (off lease). This was a long time ago but after replacing 2 engines and having it towed over 300 miles after a breakdown, I was so happy to replace it. :|

YMMV.
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Tirebiter
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Re: Should I purchase my end-of-lease Audi A4?

Post by Tirebiter »

Thanks for the great feedback everyone.
midareff wrote: Mon May 11, 2020 7:48 am I suspect they, the leasing company, have more cars than they want to sell in today's market. Maybe way more. ... How about offer them $20K as a buyout and be prepared to move up 1 or 2K to complete the deal. It just might be worth a couple to a few thousand under current wholesale for them to not have another vehicle in inventory they have to prep and sell. If they won't make a truly sweet deal walk from it.
Thanks for the suggestion. I did try this. I offered $23k to Audi Financial Services and was flatly turned down. I then approached two dealers with the offer to turn in the car to them and purchase from them, for a price lower than the residual, but was also turned down.
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Re: Should I purchase my end-of-lease Audi A4?

Post by Helo80 »

Tirebiter wrote: Mon May 11, 2020 10:58 am Thanks for the great feedback everyone.
midareff wrote: Mon May 11, 2020 7:48 am I suspect they, the leasing company, have more cars than they want to sell in today's market. Maybe way more. ... How about offer them $20K as a buyout and be prepared to move up 1 or 2K to complete the deal. It just might be worth a couple to a few thousand under current wholesale for them to not have another vehicle in inventory they have to prep and sell. If they won't make a truly sweet deal walk from it.
Thanks for the suggestion. I did try this. I offered $23k to Audi Financial Services and was flatly turned down. I then approached two dealers with the offer to turn in the car to them and purchase from them, for a price lower than the residual, but was also turned down.

Thank you for coming back with an update. I was genuinely curious how such an offer would go.
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Tirebiter
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Re: Should I purchase my end-of-lease Audi A4?

Post by Tirebiter »

stimulacra wrote: Mon May 11, 2020 10:48 am How much would an Uber ride cost for your area? Or the occasional Turo or weekend rental?
Thank you for the suggestions. In the current environment I'm not comfortable with the idea of sharing a car with an Uber driver, but I had not thought of something like Turo and I might be more comfortable with that.
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Re: Should I purchase my end-of-lease Audi A4?

Post by Helo80 »

Tirebiter wrote: Mon May 11, 2020 10:58 am I then approached two dealers with the offer to turn in the car to them and purchase from them, for a price lower than the residual, but was also turned down.
That does not particularly surprise me either simply because I do not believe that dealerships have much leverage to negotiate on the leased vehicle either. My best guess is that the agreed buyout price you had with Audi Financial services is the same price given to the dealer.


(I'm padding some of my statements above, as there are general principles that come to leased vehicles and business transactions... )
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Re: Should I purchase my end-of-lease Audi A4?

Post by GoldenFinch »

JAZZISCOOL wrote: Mon May 11, 2020 10:52 am
GoldenFinch wrote: Sun May 10, 2020 7:01 pm My Audi, bought after a three year lease, was a disaster. It ended up having continuous mechanical problems. Maybe it was just a lemon, but it was a bad experience.
I had an Audi A-4 T lemon bought gently used (off lease). This was a long time ago but after replacing 2 engines and having it towed over 300 miles after a breakdown, I was so happy to replace it. :|

YMMV.
One time my Audi had been at the shop for several days. When I went to pick it up I watched them drive it up and turn it off. I was handed the keys and climbed inside to drive away. Tried to start it and the car was dead. When I told the guy it wouldn’t start he shook his head like I was a dumb lady who didn’t know how to drive a car. Then he couldn’t start the car. Next he had the hood up and a bunch of guys trying to figure out what was wrong. It was a new problem. I was sent home again with another loaner car. Very inconvenient.
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midareff
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Re: Should I purchase my end-of-lease Audi A4?

Post by midareff »

Helo80 wrote: Mon May 11, 2020 10:44 am
midareff wrote: Mon May 11, 2020 10:18 am I don't agree it's "heavily against" as an everyday occurrence. It's like any other monetary transaction, it's either paid down too far or it isn't and all of this will vary by what particular company, or lessor if you will, the dealer uses for the transaction. Generally, they have more than one available and the dealership and writer at the dealership get a per vehicle incentive.

You do realize that insurance is sold to leasing companies to protect against major loss on the vehicle in the event of market changes, right? and that impacts this exactly how? The lessor takes a loss to actual value and files a claim.... that effects this how?

That's why I kind of question that you're suggesting $20k offer when the car is booking for $28k at retail... (and I realize I'm completely missing the wholesale price on the vehicle and we'd have to look at manheim data for that one) The OP cited the vehicle was somewhat overpriced, I think the OP suggested $1K. That would suggest wholesale around $22K... if OP offers $20K and has to sweeten a couple thousand is he better off keeping or not? Methinks he is as he could sell for more himself. It's a strange economy right now with people home, car buying is not on their mind and a lossor may have more than they wish to carry, even at today's low interest rates.
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Re: Should I purchase my end-of-lease Audi A4?

Post by midareff »

Tirebiter wrote: Mon May 11, 2020 10:58 am Thanks for the great feedback everyone.
midareff wrote: Mon May 11, 2020 7:48 am I suspect they, the leasing company, have more cars than they want to sell in today's market. Maybe way more. ... How about offer them $20K as a buyout and be prepared to move up 1 or 2K to complete the deal. It just might be worth a couple to a few thousand under current wholesale for them to not have another vehicle in inventory they have to prep and sell. If they won't make a truly sweet deal walk from it.
Thanks for the suggestion. I did try this. I offered $23k to Audi Financial Services and was flatly turned down. I then approached two dealers with the offer to turn in the car to them and purchase from them, for a price lower than the residual, but was also turned down.
While you still have it you might try this as it has no associated costs, other than a little of your time. Get a CarMax buy offer and see what that is.They generally are not cheapskates and I have (several times now) used them to negotiate a trade in offer (saves sales tax 7% here) that matches or slightly exceeds a CarMax offer. and BTW, throwing out an offer that is too your advantage that isn't taken costs you nothing.
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Re: Should I purchase my end-of-lease Audi A4?

Post by bogledogle »

I say unless you have an exceptional car you want to keep, dump it. I assume you can buy a pre-owned with CPO coverage for the same money you are going to investing to buy out your lease now. Car dealer are going to offer better leases and lower priced CPOs with the downturn - you are nicely poised to take advantage of it. Return the car and tell them to call you when the rates are dirt cheap.
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Helo80
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Re: Should I purchase my end-of-lease Audi A4?

Post by Helo80 »

midareff wrote: Mon May 11, 2020 11:33 am
Helo80 wrote: Mon May 11, 2020 10:44 am
midareff wrote: Mon May 11, 2020 10:18 am I don't agree it's "heavily against" as an everyday occurrence. It's like any other monetary transaction, it's either paid down too far or it isn't and all of this will vary by what particular company, or lessor if you will, the dealer uses for the transaction. Generally, they have more than one available and the dealership and writer at the dealership get a per vehicle incentive.

You do realize that insurance is sold to leasing companies to protect against major loss on the vehicle in the event of market changes, right? and that impacts this exactly how? The lessor takes a loss to actual value and files a claim.... that effects this how?

That's why I kind of question that you're suggesting $20k offer when the car is booking for $28k at retail... (and I realize I'm completely missing the wholesale price on the vehicle and we'd have to look at manheim data for that one) The OP cited the vehicle was somewhat overpriced, I think the OP suggested $1K. That would suggest wholesale around $22K... if OP offers $20K and has to sweeten a couple thousand is he better off keeping or not? Methinks he is as he could sell for more himself. It's a strange economy right now with people home, car buying is not on their mind and a lossor may have more than they wish to carry, even at today's low interest rates.

I don't know if we will ever get on the same page, as we're either arguing around each other or you have no idea what I'm talking about and find it okay to purposely dismiss what I'm trying to say because of your experience as a rental car fleet manager and heavy equipment leaser.

1. Audi Financial Services likely has, for lack of a better term, GAP insurance on the leased vehicle OP. Audi's financial side will mostly be fulfilled once the vehicle is surrendered by OP and if it does not bring the expected value at auction. (again, they effectively have GAP like insurance to cover the difference between the expected wholesale value and what it actually brings when there are major market adjustments like right now).

2. I don't see how your second point has any relevance.

OP Offered Audi Financial Services: $23k. They flatly declined this offer.
OP went to two Audi dealerships: They declined to buy the vehicle and sell it to him

Audi Financial Services likely has tens of thousands of leased vehicles being returned since March 1 that they're underwater on. Right now, I would imagine they're speaking with their general counsel and insurers to seek compensation for covering this loss.

BLUF - I don't think that OP has nearly as much leverage as you think he does.

But, I would be happy to be proven wrong, and I'm curious if OP ultimately ends up surrendering his vehicle. I'm all for him getting as much equity out of his vehicle as possible. If CarMax will cut him a check for some outrageous amount, more power to him.
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Re: Should I purchase my end-of-lease Audi A4?

Post by jhsu802701 »

How much will you have to pay to buy out your leased Audi?

If you can get it for a ridiculously cheap price (like $1000), I'd recommend going for it and being prepared to get rid of the car if it requires big expensive repairs. But if you have to pay the full $27,000, RUN AWAY from the deal. There are nice brand new Hondas and Toyotas that you can buy for that amount of money.

As a general rule, people who avoid buying GM and Ford products because of reliability concerns have no business owning European cars. Consumer Reports shows that European cars aren't more reliable than American cars. To add insult to injury, maintenance and repairs on European cars are FAR more expensive than on Japanese or American cars. Worst of all, parts availability is an issue, and many mechanics don't know how to work on European cars. On the other hand, you can count on parts for Hondas, Toyotas, Chevies, Fords, and Dodges to be widely available, and you can count on all mechanics in the US to know these cars.
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Re: Should I purchase my end-of-lease Audi A4?

Post by zlandar »

If the lender is the car company they don't usually negotiate purchase price on leases. Doing so would anger their dealers who want to earn money by selling the car themselves:

https://clark.com/cars/should-you-buy-out-leased-car/


"You may find you have negotiating power when it comes time to pony up for the residual value, depending on how your lease financing was originated and by whom.

If the lease was done by a bank, the banks don’t want the off-lease vehicles back at all. They’re not in the used car business, after all. So you can usually negotiate a discount from what the residual purchase price would be, Clark says.

However, that won’t be the case if you got your lease through one of the automakers’ captive finance companies (Honda Financial Services, Toyota Financial Services, Ford Motor Credit Company, etc.). You’ll likely find you have no wiggle room with them on price."
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Re: Should I purchase my end-of-lease Audi A4?

Post by atikovi »

Tirebiter wrote: Sun May 10, 2020 6:41 pmResidual is now just under $27k, which is slightly higher (maybe about $1k higher) than the listed sales price of A4s with similar specs and mileage in my area.
That's a $20,000 car tops. If you're not using it, why keep it. In 2 years it will be worth $12,000. People lease so they can drive something new every few years. If you don't want to do that, let it go.
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Re: Should I purchase my end-of-lease Audi A4?

Post by UALflyer »

jhsu802701 wrote: Mon May 11, 2020 12:47 pm How much will you have to pay to buy out your leased Audi?

If you can get it for a ridiculously cheap price (like $1000), I'd recommend going for it and being prepared to get rid of the car if it requires big expensive repairs. But if you have to pay the full $27,000, RUN AWAY from the deal. There are nice brand new Hondas and Toyotas that you can buy for that amount of money.

As a general rule, people who avoid buying GM and Ford products because of reliability concerns have no business owning European cars. Consumer Reports shows that European cars aren't more reliable than American cars. To add insult to injury, maintenance and repairs on European cars are FAR more expensive than on Japanese or American cars. Worst of all, parts availability is an issue, and many mechanics don't know how to work on European cars. On the other hand, you can count on parts for Hondas, Toyotas, Chevies, Fords, and Dodges to be widely available, and you can count on all mechanics in the US to know these cars.
For whatever reason, this otherwise excellent forum is replete with these types of factually inaccurate posts.

Talking about the overall reliability of European or German cars makes no sense, as it runs the gamut. There are plenty of European models that actually represent a very good financial deal, as after the initial depreciation hit, they plateau and experience depreciation levels similar to their Japanese counterparts, all while being quite reliable and pretty inexpensive to maintain. There are other models that continue to experience steep depreciation for years, together with poor reliability and expensive maintenance and repair costs.

The OP is talking about an off-lease A4, not some expensive exotic. Its parts availability is a non-issue, as parts are widely available and do not carry a large premium. All the large cities tend to have plenty of excellent and competitively priced independent mechanics who will have no problem working on an A4 (incidentally, the same mechanics frequently work on Hondas and Toyotas).

My recommendation is for the OP to spend some time with price guides to calculate the approximate depreciation going forward. With a lot of vehicles like this, the depreciation tends to stabilize at this point in its life, which makes it a pretty good deal, even when compared to some of the non-luxury counterparts out there. As for its reliability, the OP should take a look at the model specific Audi forums, which should have a good discussion of its overall reliability, weak points, and more or less specific maintenance and repair costs.
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Re: Should I purchase my end-of-lease Audi A4?

Post by caffeperfavore »

The Audis of the late 90s/early 2000s were disasters, but they've gotten much, much better in reliability through the years. I had a 2012 for four years of trouble free, bullet proof driving. Loved the car. Had good reliability ratings from CR, True Delta, etc. Perhaps it would have imploded in year 5, but I doubt it. Wife wanted more of a kid friendly vehicle, so we went with a Toyota SUV.

And, I can't believe how cheap it is to own this thing. Gas, maintenance, oil, insurance, everything is cheaper. I didn't expect how much of a difference it would make. Also, I don't really care what happens to it (within reason), whereas I would worry about where I parked the Audi, scuffs would bother me, etc. It wasn't a huge weight on my shoulders, but first time I parked in an iffy area, I realized a weight had been removed. There's freedom in that.

Tl;dr: unload it. When things are looking up again and you need a second car, go shopping.
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Re: Should I purchase my end-of-lease Audi A4?

Post by JackoC »

jhsu802701 wrote: Mon May 11, 2020 12:47 pm 1. As a general rule, people who avoid buying GM and Ford products because of reliability concerns have no business owning European cars. Consumer Reports shows that European cars aren't more reliable than American cars.
2. To add insult to injury, maintenance and repairs on European cars are FAR more expensive than on Japanese or American cars. Worst of all, parts availability is an issue, and many mechanics don't know how to work on European cars.
1. OP's car, 2017 Audi A4, has been 'much better than average' in reliability per Consumer Reports. This is a problem I often see on threads here involving European (usually meaning German) luxury brands: people make statements about their supposedly uniformly poor reliability that doesn't actually jibe with what CR says for the year and model in question. Some of those people will say 'well, CR doesn't know what they're talking about' if confronted with that, but you've given CR as source. :happy

2. There's some truth to this, but one might suspect the degree to be exaggerated sometimes judging from frequent statements of type 1 which aren't well backed by objective data. But you definitely want to find a good independent mechanic specializing in a German luxury brand for post warranty service, unless you're a skilled DIY'er, that's true. And repairs will be more expensive than 'mass market' brand cars.
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Re: Should I purchase my end-of-lease Audi A4?

Post by atikovi »

It's basically a Jetta underneith.
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Re: Should I purchase my end-of-lease Audi A4?

Post by smalliebigs »

atikovi wrote: Wed May 13, 2020 8:07 am It's basically a Jetta underneith.
That's like saying a Jeep is only a Fiat underneath. This is just a pretty ignorant statement.

There are a lot of shared components, that is true. In fact, all vehicles share more components than you think. But there is a lot of engineering and interior differences that set the two brands apart.

The discussion about this warranty and that warranty, this reliability and that issue just implies that from most of the people here, it is wiser to return the vehicle, or just lease a new one.
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Re: Should I purchase my end-of-lease Audi A4?

Post by atikovi »

smalliebigs wrote: Wed May 13, 2020 8:34 am That's like saying a Jeep is only a Fiat underneath.
Actually the Jeep Cherokee IS built on a Fiat platform.
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Re: Should I purchase my end-of-lease Audi A4?

Post by smalliebigs »

atikovi wrote: Wed May 13, 2020 8:58 am Actually the Jeep Cherokee IS built on a Fiat platform.
Man, I really don't want to get this thread bogged down. But I am an engineer at FCA. What you're saying is true. But that's like saying we don't do any changes in terms of engineering and design. We just take off the Fiat 500 badge and slap on a Jeep? It's blatantly ignorant and biased.

There is a lot more to a vehicle than just the platform, and do you even know what the 'platform' means?

Sorry, that's the last I'm going say about this and derail this thread.
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