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Audi A4 2005+

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  • mileswmilesw Posts: 29
    I will soon replace my B5, which I bought new 8 years ago. It has low miles -- 32k. I paid cash for the car and bought an extended warranty for about $900. With low mileage and long warranty, maintenance costs have been very low. It still runs beautifully.

    Now I'm thinking of replacing it with a new B7 (though I'm not yet decided). I think I'd rather not keep the car so long this time - maybe 5 years. I did a little calculation on the computer and discovered that, when you count depreciation, my annualized cost of ownership leveled out (stopped dropping) after 5 years. I didn't do myself a particular favor to keep it so long.

    If I go for a new B7, what's my best option? Buy - cash or loan? Lease? What extended warranties are out there these days? Other thoughts or suggestions?

    Keep in mind that I only drive about 4k miles per year. Odd, I know, but I live in the city, so driving distances are short.
  • markcincinnatimarkcincinnati Posts: 5,049
    You will get many "compelling" reasons, justifications and rationalizations here to do, uh, any of the above, so to speak.

    Talk with someone who makes these decisions for a living -- a CPA comes to mind, but even then it will be based on his/her bias. My CPA favors leasing cars and buying/owning real estate. He leases a Passat AWD Avant and owns his own office building. His partner has leased a new Volvo SUV and is co owners of the property with his partner.

    I own a building with two other people -- I lease my car, one of my partners leases cars one owns them. One of my partners "bought" the last Oldsmobile mini-van when they were 60 months same as cash. He claims he will keep it until the wheels turn square. He leases a new Cadillac every 24 months, however, too. The other gentlemen, a Harvard MBA and a PhD in economics owns, in addition to the property I co own with him an upscale housing development (an 8 figure development). He stopped leasing decades ago and bought a Lexus LS400 when they first came out -- his pledge to his friends, "I'll keep this car 200,000 miles." At 100,000 miles he had the thing repainted and at 200,000 miles ridded himself of the car out of a fear that he would die before it did, so he sold it to his son.

    So we have CPAs actions and two "wealthy" individual's (I am not one of them, unfortunately) actions here on display. The common theme, if there is one -- is that none believe that cars, no matter how nice, fun, durable, reliable, etc., are investments. They all, in my observation of their behavior, tend to "buy and hold" cars only when they have "huge tracts of land" (Monty Python and the Holy Grail) squared away.

    I know only one person who invests in cars, and I suspect his barn with its many classic cars and high zoot sports/exotics actually is an investment (think Jay Leno). The rest of us slobs just muddle through looking for the most we can get for the lowest costs over time.

    My cousin, as a final example, is a successful litigator in his 60's -- he has NEVER purchased a brand new car. He ALWAYS buys them at the "auto auction" and for years set his price always at a low 4 figure number -- I called his cars "bics" after bic pens and lighters. He would buy them and keep them until they no longer worked. He would not repair them and I suspect he rarely maintained them. I remember a car he had that when the A/C stopped working he simply rolled down the windows, ONLY when the power window motors would no longer work did that car get sold (yes!) and another auto auction "creampuff" (not really) replace it. He never or seldom bought the same brand twice, had no problem with a car from any country on earth and never cared about the colors or anything. Other than gas, the only thing I ever saw this guy spend money on was perhaps a tire or two if the car he got from the auction was in need of them from the get go.

    This gentleman, with me at his side, strolled the city of Verona Italy and then Venice and without a second thought bought a multi-hundred year old apartment in Venice, refurbished it as new and now keeps it rented year round, except when he wants to use it 3 or 4 times per year for a week or so.

    It takes all kinds.

    For me, I keep "dreaming" that someday I'll own a car 100% that is not dead on its tires -- but even at my advanced years, 53, I cannot justify even attempting to build up equity in an automobile. For, as much as I love cars, I look at them as if they were ice sculptures, I know they will all too soon melt away.

    Buy what grows in value, rent what shrinks in value -- advice that seems in spirit, at least, to be a foundation of all the folks I know, am partnered with or am related to who "have money."

    Drive it like you live.
  • bmwcccbmwccc Posts: 234
    Great advice, think I will consider heavily to lease myself.

    Mark, do you know what month the 2006 version is due to come out?
  • bmwcccbmwccc Posts: 234
    Milesw

    Thanks for the pics, great info to have on the S-Line seats.

    Yes, good news for the A6 owner to fix that problem, I am just curious how many other similar stories are out there. We don't hear them here on the A4 forum cause people are just picking up there cars now or in the very near future. Only test drives will show this and only if you do that roll to a stop then gun it pattern as well.

    I am fine waiting for several more months when the S-Line is available and feel there should be ample info. out on this Tip Lag thing.

    By the way, on the forum from where you pasted those pics, any mention of Tip Lag from them?

    Thanks
  • thebody5thebody5 Posts: 20
    Well I can agree with you on one thing, CPO are a great way to go if you don't want a new car. But if you want a new car Lease the car. You never buy an asset that drops in value, you lease them. You get a cheaper monthly payment and you can get in and out of the car every couple of years with small amounts of money out of pocket. If you were buying and wanted to get out after two years you would have to put a good chunk of money down. Or you would have to fiance for a shorter term, which means higher payments.
  • mileswmilesw Posts: 29
    No, there's not much talk about tip lag.
  • mileswmilesw Posts: 29
    I lately invited advice about buy vs. lease. To me, the issue is mainly one of cost, so I did the math (can't help it, I'm a professor).

    Turns out I had an error in my earlier calculation. Here are the corrected results. I'm posting the details, because it might help other people to decide. But keep in mind that I only drive about 4k miles per year.

    I have kept my 1997 A4 for 8 years. Here are the average monthly costs of ownership had I kept my car for only 2 years, 3 years, etc., up to 8 years (which is what I actually did). These estimates include depreciation and maintenance (I added up my actual repair bills), but do not count fuel and insurance. All figures are in 2005 dollars.

    Years.....Monthly cost (2005 $)
    2.................685
    3.................533
    4.................507
    5.................448
    6 ................434
    7 ................405
    8.................387

    Anybody have a rough ballpark idea of lease rates on a new A4? This would let me compare leasing to buying on a quantitative basis.

    I guess if cost is the only issue, then buying and keeping the car for 8 years is the way to go. But if you want to replace your car more frequently, the decision is more complicated.
  • armin1armin1 Posts: 4
    Would everyone agree, that the better handling and looks of the 2005.5 A4 with sports suspension compensates for the drawback of decreased ground clearance and maybe ride comfort? I tested it yesterday and found it very nice, even on a bumpy road, but especially the looks I preferred a lot! I did not have a chance to challenge it, unfortunately. As I live in New Hampshire, with bumpy roads and snow I am wondering whether the sports suspension would be a mistake for me though (I am about to purchase a 2.0T manual shift Avant). Any suggestions?
  • mileswmilesw Posts: 29
    Quick follow-up. I spotted another error. Here are the right figures:
    Years.....Monthly cost (2005 $)
    2.................580
    3.................448
    4.................430
    5.................381
    6 ................374
    7 ................351
    8.................346
  • mileswmilesw Posts: 29
    Since I'm contemplating a new car, I've been pushing some figures around, and I discovered an interesting thing about A4 pricing - if you adjust for inflation, a comparably equipped A4 has actually gone down in price since 1997.

    I paid exactly $30k for my 1997 A4 2.8 Q MT fully loaded ($300 over invoice). In today's dollars, that would be $35,400.

    Then I configured a new B7 on Audi's web site for comparison. Interestingly, a 2.0T B7 has an MSRP that is almost the same as my purchase price back in 1997 (adjusted for inflation). By the way, I configured the B7 without modern-day doo-dads like nav and lighting, to maintain a fair comparison to the B5.

    In other words, the A4 has actually gone down in price, but can be purchased in much more expensive configurations due to new optional features that were not available in 1997, such as 3.2L engine, nav, lighting pkg.

    Also, performance has improved. My B5 could only match the 0-60 performance of a B7 if it were dropped from a tall building.
  • rjorge3rjorge3 Posts: 136
    Buy what grows in value, rent what shrinks in value -- advice that seems in spirit, at least, to be a foundation of all the folks I know, am partnered with or am related to who "have money."

    Whooaaaoo mark, I really enjoyed reading your post. I am a 34years young CFP in NJ, and all my life I owned my cars, the previous one (I still have it for nostalgic reasons) is a 1994 Toyota Celica with 145,258 miles that I bought brand new in 1994 for $18,500 financed for 5 years. I loved to hear from someone with many years of experience.

    When it was time to replace my Celica, I came to a cross road...I love to own things, I hate renting things (I do own a co-op which I rent and I own my house), thus the idea of leasing was really giving me nightmares sweaty palms, until my CPA sat me down. He dedicated almost an hour (and yes he did not even charge me!!) and explained to me why in my case and in most cases leasing is more beneficial (I would have to type a two page post if you want his explanations), long story short, I leased my A4 1.8 6M on January this year and I loved the fact that I only paid $1,350 out of pocket and $388 monthly pmt(interest rate=money factor was equivalent to only 1.5%!!). For my 1994 Celica I gave a $5K down payment and I paid $356 per month. And yes, I am one of those quantitative nuts (hey! I am a CFP after all) and I calculated that my payments would have been $860.08 if I would have financed the car over 39 months (my lease term); thus I made believe that I purchased the car (to satisfied my feeling of owning something) and I am investing $475 per month since January 1st this year in a mutual fund (a Blend Fund, 60 Stock/40Bond). So far counting today deposit, I have $1,974.45, that is a 3.92% rate of return in only 4 months!!. and my standard deviation (for those quantitative nuts again) is very low, which means that I am not taking too much risk on the money that I am putting aside on the fund. Oh, another side note, a "side effect" of my conversation with my CPA was that he told me "you will start to see that other newer cars will start to open your appetite to get a newer model on a more frequent basis"..........yesterday I went to the NYC auto show and I saw the 2006 BMW 330i....yes you guessed it.....in 2008 when my lease expires and if nothing else changes, that will be my next lease. I guess he was right (my CPA), your appetite will make you very hungry for newer cars :D

    R
  • taxman10taxman10 Posts: 59
    I leased in CT on the first weekend that the B7 was available. I went for 3 years and 36k miles. residual was 58%. Money factor was equivalent to 3.25%, or .00135.
    The bet is that the money factor should come down, economic condiditons being no different, somewhat as the summer marketing season approaches and , in my opinion, the Passat becomes available.
    On the same weekend the money factor on an Allroad was .001 or 2.4% - different car, different product cycle, better rate.
    There are plenty of websites that allow you to run lease pro formas - start googling with "lease calculator".
    Good luck :)
  • joxer1joxer1 Posts: 27
    Well, apparently Audi Canada either doesn't want to lease any cars or there are a lot of suckers here. I didn't get all the hard numbers from my dealer but using one of these calculators with the numbers I did get turned into something like (for 39 months) - 51% residual, 5.5%, $715 before tax (590 USD), for a pretty loaded 2.0T. With numbers like those I just can't see leasing the car. FWIW, a BMW X3 3.0 would work out to $515 for a vehicle that costs the same or a bit more new ($424 US). That might not be so bad, except then you'd have to drive an X3.
  • cicerocicero Posts: 51
    Gambit:

    I must say I know how you feel. Initially, I felt the same way, a bit concerned about the grill and the rear of the car. I thought the rear looked like a Catera, the fog lamps appeared lifted from Hyundai and the grill reminded me of the Concorde. I thought....hmmm....this is a clear product of the Global economy. Then...they introduced the "Coretta" formerly two cars, the Corolla merged with my beloved Jetta and I saw Global pandering all over the product.

    However, after time I changed my opinion about the A4. Last Sunday I visited the dealership and saw a number of them up close and personal and I have to say----sans license plate, that the grill looks great and the styling is much more aggressive. I came home and immediately started trying to figure out how I could trade in my 2002 which I am still paying on and get into a new car. This is a clear indication of lust or at the very least, conspicous consumption on my part because I am completely satisfied with my 1.8T Q regardless of the complaints about the engine being underpowered etc.

    Nevertheless, Audi should take my desire as a compliment because I was not for the changes (Mark saw the beauty in the car before most of us did but then Mark is Mark).

    Give the car another look, a first look if you have not seen one up close and are only relying on pictures, and you may change your mind. And that is the rest of the equation: we generally don't take change well but when you consider the evolution of this model of car the most amazing thing is that most of us appreciate each rendition of the A4. I still find myself smiling when I see the first A4s on the roadway as well as the 2005s. The car has stayed true to its styling concept and each of the cars are clearly related.

    I think the A4 design team did a great job. I rescind my prior criticism of the changes.

    I wish I could do the same for the Jetta; however, the "Coretta" has not grabbed me or mellowed me. I think it is a brutish Corolla and has lost its personality and distinctiveness in the process------but it may do very well in Japan.

    Cicero
  • taxman10taxman10 Posts: 59
    I got the 17" wheels but not the sport suspension. I am not missing it. But if you want the ultimate and have the extra $250, go for it.
    The car is alread pretty low to the ground w/o it and corners very flat. I'm not messin with it.
  • gambit293gambit293 Posts: 406
    Yup, I'll admit that I haven't seen a new A4 in person yet, but I have seen quite a few A6s, and those didn't change my impression. As was stated before, the market will be the final judge, so we'll see.

    Completely agree about the Jetta. It's basically the most expensive Corolla you can buy but with a nicer interior and no Toyota reliability.
  • markcincinnatimarkcincinnati Posts: 5,049
    If the issues at present have to do with either depreciation and/or money factor, the impact upon regular financing and an outright purchase are similar. Leasing only suggests -- if the money factor can be as low as possible -- that you are not kidding yourself into thinking there is even a hint of a possibility of building equity.

    My wife's soon to be built X3 is $46K (USD) and for 36 month/15,000 miles with no money down (OK $250.00) the payment is $581. An Audi A4 3.2 @ $44K (USD) same terms was $684. The residual on the BMW was higher and the money factor slightly lower.

    Now, you may not care for a BMW or specifically an X3 and I accept that. But similarly, I priced an A6 vs a BMW 5, a Mercedes and recently an Infiniti M35x.

    The Audi cost less than the BMW when configured as close as option packages etc would allow -- but was over $119 per month more. The Mercedes was MORE expensive but was about the same as a far less expensive Audi, finally a $50,240 M35x needed to be compared with a $51,770 A6 to come mostly content-wise close and the monthly difference was over $150 per month lower for the Infiniti.

    None of this means a hill of beans if you want to simply look at cars based on the monthly payment -- heck they'll pay YOU to take a Jaguar around Cincinnati.

    However, if you will find "equivalent" cars (in YOUR mind, for YOUR purposes) and would actually be OK with them being your daily driver for a few years, then the "cost dependency" DOES rear its ugly head.

    Since many of these cars are NOT from the US and NOT built in the US, there may be money factors at play here. A car from Munich or Ingolstadt, imported here to the US has Euro Dollar issues to address (and one would think equally so)>

    Yet, when a $54K A6 equates to a $57K BMW and the BMW costs less to "acquire" -- something ain't right. Now, in my case, I would not want the BMW, so its lower price is simply an indicator of the lower value the market must place on the Audi or the higher cost of money Audi Financial must want to place on the transaction. In any case, since someone, some human being inside Audi made the decision(s) to market the new Audis thusly, it appears that they have not fully scrutinized what Acura, BMW, Jaguar, Cadillac, Volvo, Infinity, Lexus and "the rest of the usual suspects" are doing.

    The main issue is that Audi used to be different or at least very rare in that it offered very nice German sport/lux cars at slightly lower prices and with a HUGE advantage: quattro. The playing field is no longer thus -- who doesn't offer AWD in at least one car in their line up that is playing in this league. Name a Premium Brand (and Saab doesn't count) that typically plays in "XYZ" magazine comparos -- check out the new Car and Drive, a couple months back look at Motor Trend and so on -- Audi has serious competition.

    Audi, for this moment in time, has serious and viable and affordable (relatively) competitors that can be had NOW and several more that will be here in the next 90 days (think two new BMW's both avail with AWD -- the 3 and 5 series).

    I maintain that this is a marketing or marketing influenced blunder that 25 years of quattro and accolades upon accolades will not, cannot, mitigate. The NA consumer, at least, reads, uses the Internet and can test drive in an auto mall, a half dozen similar market segment cars in an afternoon -- Audi needs to combat the current crop with superior products and competitive prices. I will suggest they have leading products (but not leading alone) -- they are members of the pack, that is, but not THE leader of the pack any longer. Yet they seem to be from the consumer's point of view (the majority of these cars, these premium cars, are leased and or financed with the mfg's financial arm) the most expensive as if they are the "ONE" leader of the pack.

    This position, IHMO, ended with the roll out of the 2005 and 2006 competitors from Europe, Japan and the US.

    Still having said all of this, we would have paid MORE for a $44K A4 than for a $46K X3, but not $103 per month more considering the A4 had no bluetooth and no On*star and most importantly no manual transmission.

    I suspect we would have paid at least $25 or $35 per month more for a less well equipped less expensive Audi -- but alas it was not even possible to make this concession.
  • I am considering a 2.0T Auto with sport package. The dealer had two black cars on the lot but only with the 17" wheels. He strongly recommended the 17" wheels over the sport package indicating the sport package was much too rough. Granted, he didn't have a sport package car on the lot and I'm discounting his comments since he probably wants to sell a car on the lot. However, I'd like to know people's feedback regarding the 17" wheels only versus the sports package. The sports package looks much nicer.. lowered and all. However, I'm curious about how much ride quality in day-to-day driving is compromised. I drove the 17" wheels only car and it handled quite nice. I'm really just concerned about the harshness of the sports suspension.
  • taxman10taxman10 Posts: 59
    Scan up to post #519.
  • dl7265dl7265 Posts: 1,381
    WoW TT for an X3,Enjoy it Mark. Perhaps one Day Audi will listen.

    Maybe you can give Trahan an earful Wednesday.

    DL
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