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Audi Q7 Lease Questions



  • Mike,

    If I gave them my A6 for the trade-in, doesn't it mean that I pay less sales tax on the Q7 lease? So if I get 7,000 off the price of the Q7, I am now saving on the tax.

    Here are the numbers I ran through, without and with the trade-in. This is for a base Q7 with a NJ sales tax. Please tell me if this is realistic!

    According to w/o trade-in
    MSRP: 39900
    Base Cap Cost: 38000
    Costs Added: 575 (aquisition fee)
    Cap Cost Reductions: 0
    Adjusted Cap Cost: 38575
    Residual Value: 23940 (60% - 10k/yr)
    Money Factor: 0.0004
    Term: 36
    Sales Tax: 7%

    Depreciation: 14635
    Finance (Rent) Charge: 900
    Total Sales Tax: 1087

    Total of All Pmts: 16622
    Total Lease Cost: 16622

    Monthly Pmt: 431
    Tax: 30
    Total Monthly Pmt: 461

    According to w/ trade-in of $7,000
    MSRP: 39900
    Base Cap Cost: 38000
    Costs Added: 575 (aquisition fee)
    Cap Cost Reductions: 7000
    Adjusted Cap Cost: 31575
    Residual Value: 23940 (60% - 10k/yr)
    Money Factor: 0.0004
    Term: 36
    Sales Tax: 7%

    Depreciation: 7635
    Finance (Rent) Charge: 799
    Total Sales Tax: 100

    Total of All Pmts: 9024
    Total Lease Cost: 15534

    Monthly Pmt: 234
    Tax: 16
    Total Monthly Pmt: 250
  • I frankly am not 100% sure, although logic would say that you are correct. I do have two observations.

    In the 2nd example, you say total sales tax is $100. Then you say that of the 250 monthly payment, 16 of it is tax. After 36 months, that's $576 of tax. This represents a $504 tax savings along with a $100 interest savings.

    Second, you have the total lease cost in the 2nd example as being $15534. $250*36 = 9000 + 7000 down payment = 16000. This compares to the 16,662 cost of the lease in example 1. This more accurately reflects the tax and interest savings.

    While saving $600 is nice, the downside of doing this is if the car is totaled or stolen and not recovered, you lose the $7000 trade in. A cap cost reduction does indeed save some interest and I do believe a trade in would save the tax on a lease.

    I do belive, though, that the general consensus would be to avoid any cap cost reduction on a lease, tax savings or not.
  • You're right, now that I think about it. I'd be better off investing the $7,000 in an ING savings account, where I would earn $350 annually, $1050 over 36 months not counting interest on interest, $400 more than what I would get from the tax savings. If I receive a check from them for my car instead, does this mean I now have to pay tax on this sale? Or is it still considered a trade-in?

    The big question for me on the Q7 remains - is the money factor is also .00038 for the base model just like it is for the premium? I called Audi Fin Svs but of course they didn't tell me this information... Anybody know? Carman?

    Before I even started to discuss numbers, the salesperson telling me that the lease deal on the Premium is better. Are they getting some incentive from the manufacturer on the premium models?
  • You aren't paying tax on the sale of the car, you're paying tax on the purchase of the car. So if you receive a check, you do not have to pay taxes on the sale.
  • Thanks, I am new to this.

    Are there any reasons not to get a 39 month lease instead of 36 months? The warranty still covers it.
  • Mike - No disagreement with your argument. I opted not to tie up the money with Audi for the marginal benefit - which I calculated around $300 for three years versus the ability to invest it somewhere else (i.e int'l ETF fund) and have the ability to get that money if needed (which I won't). While I could have easily put down the 4 MSDs (ironically it was never offered to me), just a personal decision. Some of the int'l ETFs have been earning well in excess of 10%.
  • If you are paying the same depreciation over 39 months vs 36 months, and the interest rate is low, I see no reason why it would be a bad thing. Chances are the payment will be lower as well. The key is the difference in residual value and the Money factor.
  • Hi lej1447. The price that you were quoted for the Q7 is definitely not below dealer invoice. Perhaps it is after all sorts of advertising and other fees are added in. Having said that, the price that you were quoted is still pretty good, especially if the dealer that you're working with had to swap for the model that you want. The lease program that you were quoted is right in line with Audi Financial Services' current program for this model.

    Prices Paid Forum
  • Here's the information that you're looking for, shoprey85. Audi Financial Services' current buy rate lease money factor and residual value for a 36 month lease of a 2007 Q7 3.6 Premium with 15,000 miles per year are .00038 and 52%, respectively. The residual value for a lease with only 12,000 miles per year would be 2% higher. $500 over dealer invoice would be a very good price for this truck. That's a good target to shoot for, but don't be disappointed if you have to pay a little more than that. Make sure to stop by the following discussion to see how much other community members have paid for similar trucks lately: "Audi Q7: Prices Paid & Buying Experience".

    Prices Paid Forum
  • You're absolutely right, ny_driver. Audi has been making up for its below average residual values on the A6 and Q7 with extremely low money factors. Good lick in your negotiations.

    Prices Paid Forum
  • Hello rocco50. Audi's special lease money factors on the Q7 are the same for Premium and non-Premium models.

    Prices Paid Forum
  • Hi Car_man. Thank you for the reply.

    Oh darn it, I was hoping to be somewhere in the neighborhood of $500 above invoice. Any how, leasing contract does not list every padded or hidden cost, possibly such as ad fee and any other added in.

    You mentioned about good quoted price given dealer swapping models. Would you please give me a little explanation why such was the case?

    BTW, is it worth it to buy the Audi Care at this point, considering the cost of regular maintenance at intervals of 15K, 25K, 35K, and 45K (if I purchase the car after 36K mi lease)?

    I'm still learning. Thank you so much.
  • If you are going to lease, absolutely add Audi Care. It will add 1% to the residual value. This virtually eliminates the additional $550 cost. In my deal, my payment actually went down $0.30/month by adding AudiCare. Now I don't have to pay $100-$150 at the scheduled maintenace intervals.
  • Something to consider is that you have to pay for the fourth year of registration for only 3 months of use. May or may not be a factor for you, but that equates to several hundred dollars.
  • Good point. I just had to do that for my 39 month Mercedes Lease. Although it was only $49.50 for New Jersey.
  • Thank you Car_man! I am also looking at the FX35, I just posted my figures that I got, please tell me what you think.
  • I've been reading some messages about the extra three months on the infiniti fx35 lease forum made by exaudiowner, see if his reasoning against it makes sense to you.
  • I've read it and I don't think that he is correct.

    Let's take a scenario and run it.

    MSRP 60,000
    Selling Price 58000
    MF 0.00125
    Residual Value 55%
    Taxes 7%

    Let's say the residual value is the same for 36 months and 39 months. This is the way it was on my current lease.

    From Lease Calculator

    For 36 month lease, the monthly payment would be $864.76. Let's assume that all of the upfront fees are the same, in this case $0. 36 $864.76 payments = $31,131.36 total cost of the lease.

    For a 39 month lease, the montly payment would be $807.61. 39 $807.61 payments = $31,496.79

    You are payment a little more in total payments because you are using their money for 39 months instead of 36 months.

    The depreciation cost is the same. You are paying it over 39 months instead of 36, so the payment is lower, but you make more payments.

    If the residual value is much lower on a 39 vs 36, then you have the analyze the two and see which is better.

    This scenario costs you $365 over 39 months to have a payment that is $57/month lower.
  • I agree, thats the way I look at it.

    Do you know if I should be paying both the Destination Charge and the Acquisition (Bank) Fees, or just one of them? Should this fee(s) be capitalized as a part of my Net Cap, or paid up front?

    Please look at my numbers that I got from the dealer yesterday:

    The dealer said he's charging me $300 over invoice, yet the Net Cap includes the Tax amount...

    I also have the right to give them multiple security deposits to reduce my MF ?
  • I do believe that the adjusted cap cost includes the taxes. I'm unsure about what fees are capitalized.

    As for the MSDs, they should be allowed but check on their program. For instance, a Mercedes dealer told me that for them, MSDs reduce their base money factor. If MB Financial is offering a subsidized money factor, MSDs do not lower the subsidized rate, making them a non-factor.

    I know for sure that BMW and Audi allow for MSDs to reduce whatever the rate they offering.
This discussion has been closed.