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Audi A6
6920 messages, Last post on Dec 26, 2012 at 7:05 AM
You are in the Audi A6 Forum.What is this discussion about? Audi A6, Sedan
#1473 of 6920 Leasing (#1448 - Automophile) and Leasing Nitpicking (#1449 -Markcincinnati) by lintoronto
Jul 23, 2001 (2:35 pm)
Thanks to both of you guys for being so informative and, indeed, so incredibly helpful to neophytes like myself who have never leased before. Automophile indicated that mph =2400x .002 or 2.8% in one example. What does the 2400 represent, and is it a constant? So many interesting comments on the A6 2.7T. I am in the process of deciding on either an 2002 Aura 3.2 CL-S or 2002 A4 3.0; therefore, I am doing my due diligence as best I can. There seems to be almost a romantic passion regarding the Audio even though there is great rational acceptance of reliability concerns and fairly excessive extra warranty cost considerations. I have had a 1998 Legend coupe which I kept for 6 years with only normal maintenance. I presently own a 1995 Legend AS with the identical experience; so, now that I am feeling a little like a change, I am somewhat scared about some of the negative Audi experiences about which I have read. Well, Shakespeare said "cowards die many times before their death". I suppose I should therefore be willing to take a chance on an Audi if I can exercise the courage. Be assured that your comments will be appreciated.Lintoronto
#1474 of 6920 Leasing Formula by mbnut1
Jul 23, 2001 (2:55 pm)
Thanks for the explaination. So if I understand correctly if I lease a car which sells for $42k and has a $20K residual then the lease payment is composed of the depreciation plus a finance charge on $62K (the sum of the selling price and the residual)#1475 of 6920 Lintoronto -- relax by markcincinnati
Jul 23, 2001 (3:00 pm)
Audis are mechanical things (I almost said beings). They are not perfect, I have had some (which I generally consider minor) problems with the 24+ Audis that my wife and I have owned since 1978 (including a couple that were "company cars"). One of the cars (1979 Audi Silver FoxGTI I think it was called) drank a quart of oil every 100 miles -- other than that, no real show stopper problems. On the other hand, I NEVER EVER go without a warranty (Chrysler Corp taught me that the hard $ way -- remember the Cordoba?).I have heard of the legendary Japanese car reliability, but frankly have never known anyone who actually could PROVE that all he/she did was routine maintenance -- but I have seen the posts, so I believe it. My Honda, Toyota, etc driving friends all seem to have "issues" with their cars, just like us Audi owners (and thank god for the Audi advantage, or I bet the cost of these issues would be breathtaking).
Yet, some of these same posts that tell of the high reliability of some of the Hondas,Toyotas, Nissons, etc, etc, also say their cars are "boring." My friends' Camry and Avalon are very reliable, true, but these friends also claim their cars are dull to drive.
Different strokes.
Audis will "engage" you as a driver and as an owner -- you might notice from this board, that Audi driver/owners seem to have a "passion" for their cars -- the A6 2.7T and 4.2 are fantasitic drving machines -- many of us think they are unrivaled for the price.
Audis improve in subtle ways especially during the first 6 months or 10,000 miles -- and it is only when you have been driving an Audi for this time and then drive something else that you really understand what great driving cars they really are. Then, you get hooked for good.
But, they are not "loved" by all -- and that is ok too.
It would seem that most of us on this board, despite some reported issues, are satisfied or delighted customers of the A6 (especially the 2.7T and 4.2 -- and this is not because of any problem with the 2.8, it is just that the 2.8 is, well . . . a trifle underpowered -- but even this is mostly cured with the 2002 A6 3.0 with 220HP).
All of the Audi owners that I know either are or plan to be REPEAT Audi owners -- that, IMO, is the best peace of mind going.
Vorsprung durch Technik.
#1476 of 6920 Leasing formula by markcincinnati
Jul 23, 2001 (3:19 pm)
Not quite: " if I lease a car which sells for $42k and has a $20K residual then the lease payment is composed of the depreciation plus a finance charge on $62K (the sum of theselling price and the residual)."
The "Payment basis" in really simple terms (but mostly accurate terms) is made up of the Selling price of the car MINUS the residual (which is usually a % of MSRP, not of the selling price). In your example, if the car sells for $42K and has a residual of $20K, the lease amount will be based on $22K x the money factor (and of course this is calculated to arrive at the MONTHLY payment -- at a # of months term (plus tax)).
For years companies (GMAC for example) would fool around with the residual as a way to decrease the monthly payment -- but of course an artificially high residual would make it virtually impossible to "get out of the lease" early. Today, leasing arms of the mfg will manipulate both the money factor (i.e., interest rate) and/or the residual, in an attempt to lower the monthly price (and by the way, virtually NEVER put any money down on a leased car -- it is as was said above a "false economy.")
A very high residual or a very low mf? -- I'll take the lowest mf possible -- this way you can get near the end of your lease (3 - 6 months) and have the possibility of walking away without being upside down, especially if you are buying another [Audi] car. Now, if they offer you a really low mf and a really high residual, beware of the upside down monster -- but if your lease is less than or equal to 36 months (NOT 39 months) and you KNOW you will not exceed 50,000 miles in those 36 or fewer months, you are probably ok (upside down wise) because you can keep your car with full service and warranty coverage for the full term of your lease (i.e., no $$$$$$ surprises).
Funny thing, the 39 month lease option has been, for Audi, the best deal -- my only advice is to check out the residual, because if you "get close" to your 50,000 service and warranty limit and you still have 4 or 5 months to go, you may be in for a four figure surprise if something goes "bump" or if you "have to get out of the lease" at, say, month 35.
My current Audi Financial lease is 30 months, no money down and Audi made the first month's payment for me and waived the sec dep. I will begin the shopping process around month 25 and probably have a new Audi no later than month 29 (if history repeats itself) -- and I won't be upside down.
The Audi loyalty program will -- I hope -- be continued.
As they say, a word to the prudent. . . or wise.
#1477 of 6920 Looking for 2.7T lease Deal by acindy
Jul 23, 2001 (6:10 pm)
I'm from Indianapolis and am looking for a A6 2.7T. Tom Wood (the only Audi dealer in Indy) ran an ad for 39 months, $499 a month plus tax, $1,000 down, 10,000 miles per year in the local newspaper. The car had most of the options just not the sport suspension and 17" wheels. It's MSRP was around $44,000.I stopped by Tom Wood and they said that the advertisement only applied to "certain" A6's which they sold out of months ago, even though they had several 2.7T's on the lot. They tried to quote me for $635 a month plus tax with nothing down and 15,000 miles per year. This car was even $1,200 cheaper than the advertisement. They mentioned that Audi USA ran the advertisement in the local paper. The ad did of course have Tom Wood's name on it like they were supporting it.
Does anyone out there know of any dealers in Cincinnati or Chicago (I'd hate to pay the sales tax in Chi Town) that may be honoring the great lease deal's talked about in the ad and on this message board? Thanks for the help.
#1478 of 6920 Leasing Formula by mbnut1
Jul 23, 2001 (7:04 pm)
MarkCincinnati your explaination makes sense to me which is why I challenged Chigago27ti sum of the residual and selling price formula in the first place (see posts 1436 and 1444)#1479 of 6920 Leasing and sales tax by jkendall
Jul 23, 2001 (8:16 pm)
MarkCincinnati, I hadn't planned to lease my new Audi, but some of the reasoning makes good sense. My question is, if I lease the car in Cincinnati and register and drive it in Indiana, since the lease is made in Ohio, do I pay the Ohio or Indiana sales tax? Since I've just moved here from Texas, where the sales tax on a vehicle is 6.25%, I don't know what the sales tax rates are in Ohio and Indiana.Also, why would a trade-in not reduce significantly the cost of the lease payments. AND, have you heard of the one-time lease payment?
I would most likely buy more miles, as I would hate to be having to pay the super tab for going over the limit. When I talked with the guys in Louisville, the deal they quoted me just didn't add up, so I went to see Ralph in Cincy.
An alternative would be to wholesale my Land Cruiser, and put the money in a CD. Whatcha think??
BTW Audiworld released more info on the '02 A6 yesterday in their news.
jk
#1480 of 6920 ACINDY by chicago27t1
Jul 23, 2001 (9:23 pm)
I got my deal at McGrath Audi/Acura in Glenview. Ask for Mike Kollar and tell him that Earl sent you. They are honoring the Audi promotions. Sounds like that other place is trying to rip you off.Sales tax is based on where the location of where the vehicle is registered, not where it is sold. So, if you live in Cincinnati, you'll pay Ohio sales tax.
#1481 of 6920 My lease formula is correct by chicago27t1
Jul 23, 2001 (9:34 pm)
Sorry, MarkCincinnati. The lease payment formula is:
Monthly Depreciation Payment + Monthly Finance Charge
where...
Monthly Depreciation = (Net Capital Cost - Residual)/(lease term in months)
Monthly Finance Charge = (Net Cap Cost + Residual) * Money Factor
This is not a matter of opinion. This is a fact. I went online to see if I could locate the formula elsewhere. Please go to...
http://www.leasetips.com/calculating.htm
You will find that, aside from some differences in terminology, my formula is identical to there formula. Their explanation for the calculation of the monthly finance charge (i.e., the plus sign) is similar to mine (though much more clear than what I posted):
"The plus sign in the formula in step 2 for the monthly finance charge is not a typo. The finance charge is based on the sum of the cap cost and the residual, not the difference. People are used to hearing that in a lease you only "pay for only the part you use" and hence should only pay interest on the depreciation (difference between cap cost and residual). This is not the case at all. Instead, the best way to think of a lease is like a balloon loan where the principle is the cap cost and the balloon payment is the residual value which is made by turning in the car."
They also have a good general lease guide at:
#1482 of 6920 Trade-ins and Leases by chicago27t1
Jul 23, 2001 (9:42 pm)
There are two benefits (or at least two that I know of) to applying a trade-in to a lease transaction. They are both related to reducing the sale price (net cap cost) of the car.1) Reducing the net cap cost will reduce the amount to be depreciated over the term of the lease and the amount that will be subject to a finance charge (see previous really long message).
2) It will also reduce the amount of sales tax you are paying. In Illinois this a really big deal.
MarkCincinnati is correct, however, when he says that money factor (interest Rate divided by 24) plays a bigger role. The only problem is that you (to my knowledge) cannot negotiate a money factor. Those figures are supplied by Audi Financial services or whoever owns the lease.
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