You're in the Lower Mainland area? Which dealer do you use? Clarkdale? Richmond Audi?
So your verdict is that the 3.0 is not underpowered? Have you tried it with a full load going up to, say, Whistler? Thanks for any insight you could offer.
Brian, oh geez which right sweeping curve did you have your accident? Yeah I agree, unless you put chains on your tires, there's no way the ESP or Quattro or whatever can save ya cuz it's still 4 tire patches touching the road. Yeah let's talk outside the board.....my email address is iambb8@hotmail.com
Scirocco, big *slap* on your face for putting on only 3300 miles in 2 yrs!!!!! My God, you better move the car like a few inches every week cuz the dead steady weight on the same patch of tire is going to get you flat spots on the tires!!! Mine just reached 30k in its 2 yr anniversary 2 weeks ago. 15k/yr, not bad driving in Chicagoland.
MarkC, I think the TT's final assembly is in Hungary, cuz the VIN number starts with a T instead of a W. W is for Deutschland while T is for Hungary. I think they use the final assembly point as the country of manufacturing.
Yea I am from Vancouver' area, I brought my car from Clarkdale but for maintenance and service I will bring the car to Richmond Audi because their facility there is new.
No I haven't try driving the car up to Whistler yet but I will someday, since snow in the west coast is so bad this year =(. However, I did drove the car to Hemlock resort the road there were pretty rough and I am carrying 2 snowboards and 5 passengers in the car 2 adults and 3 children. I can overtake other cars rather easily, while all those rugged suv struggle to head up because of the tight roads.
For extra powers the S mode comes in very handy, I can notice instantly the difference, the RPM gauge will usually reach 5000 rpm before it upshift to the next gear. 3.0 is eunogh to satisfy most people, if you want more power the S4 will be available or simply chip it if you want to void the warranty .
Billy-- *ouch -- rubs cheek* I know, I deserved that slap. But yeah, I do thank you for the flat spot on the tire advice. I do drive it at least once a week so I'm not too worried about flat spots.*laughs*
A long time ago, I think we talked about using Ecode tails so that the rear turn-signal lamps would be amber. Did you ever do that? A place locally --they're actually less than 2 miles from my house-- are selling them and I went down to see them recently. The only thing that kept me from buying them is they don't have any side (rear) marker lamp provisions. I guess it's only in north america that it's required that vehicles have side marker lamps? ...or at least they're not required in Europe. So, just wondering if you (or anyone else reading this who has a B5) have retrofitted your tail-lamp assembly with the Ecode assmebly?
Paul-- Man, so you put on about, what, 25k/yr?? ...yeah, that's definitely more than the average joe! ...I suppose you're definitely not a candidate for a lease.
Brian-- *omg* jeez, I'm sorry to hear about your experiences the past year. I do remember your mentioning the first accident but I didn't realize you had a second one. It's disappointing that it's soured you completely on that particular car. But, yeah, if you can swing the used S4 idea then I think that's the way to go. I too didn't think I could afford the S4 two years ago but now I regret not having spent a little more and getting the S4. At the time, I thought I was really stretching my budget and going into uncharted territory just buy buying an A4 but my philosopy about life has changed considerably since then. As I've said, I'm now looking forward to shopping for the next generation S4 and possibly getting one of those.
Interesting comments on your coil pack experience. Thanks for mentioning it. I guess I'm going to press my dealer on seeing about getting them all replaced if a recall hasn't happened by the time I make my service appointment next month. VW has already issued a recall, right?
Good luck and I hope things are looking up for you now ...it sounds like it. Keep us posted on your hunt for a good used S4.
I know, I do drive about 25K a year. Cars are meant to be driven though, right? I did 'Driver Option' my VW, but I am buying the lease out so I should be ok.
I commute about 80 miles round trip a day. I might end up getting a TDI next time, definitely would be alot of savings for someone like me. I got the 1.8T now though, because I am power hungry..
Richmond Audi! But I have to tell the any car dealer that does not stock gaskets has a problem!The Benz 230 although no tire burner did give better performance that the Audi A4 3. 0 liter. I realize all this is subjective but thats what driving is about!The 230 did not have all the options like Heated seats,electric seating, heated seats and a Bose system. But both high and liw beams were xeon. The mirriors self dimmed and unlike the Audi the outside mirrors were heated and they had turning signals built into them. Remember my 2002 came fully loaded ata cost of a litle over $60,000 Canadian. Electric seats are nice byt not really needed . Heated seats make sense if you live east of Vancouver. My feeling about the motor is that after 20,000 klicks its hard on the gas and in my view the car needs more without getting silly.
Does anyone have the 17" wheel/tire option WITHOUT the sport suspension (for an '03 A4) and can comment on the difference in ride/handling compared the standard 16" wheel/tire combo? Is this option worth the extra $? On the other hand, does the wider tires adversely affect traction and handling in the snow?
Ummm nope haven't done the rear Ecode tails. I guess I tend to become rather lazy during the winter months to upgrade or even clean the car although the road salt can cause some major issues. Actually some of us here have done the LED turn signals on the front with the Ecode headlight assemblies.....actually those LED turn signals will work with stock non Ecode headlight assemblies too. It's great that they will light up instantly, but then when they are not lit, they have about 80% of the intensity versus when they are lit. In other words, when they blink, they are not that pronounced. They could present some safety hazard. Yeah let me know if you decide to do the rear ecodes and take some pics!
I think a lot of countries don't require the reflective things inside the assemblies.....that's why the Ecodes don't have the yellow reflective things in them.
I had a 2000 A6 without sport suspension but with 17" UHP (summer) wheels and tires. I had traded in a 1999 A6 with 16" all season wheels and tires.
I traded the 2000 A6 in on a 2001 A6 with the sport suspension, seats and wheels and tires.
As far as RIDE quality goes, I could tell virtually no diff between the 00 and 01 A6. The 01 did "hunker down" more in the twisties. That is to say, the 01 had less body roll.
The 99 had the worst handling of the three and overall a pretty nice (softer) ride -- kinda reminded me of a Chrysler 300M with sport suspension -- which is to say "not bad."
The penalty, so to speak, for the wheels and tires and the sport suspension is "nil" in my opinion.
The handling improvement overall is subtle but when you really push it, the sports suspension and the lower profile tires (and wider too) equipped versions are hands-down superior.
Finally, the summer only tires that MAY come on a car so equipped are not very helpful once the temperature goes and remains below 40F. Snow traction is "OK" but since it is usually below 32 to have snow still on the road (here in moderate winter Cincinnati) the summer tires, uh, well -- they suck.
I switched to Ultra High Performance All Season tires on my 01 A6 4.2 w/sport package. I have this type of tire on my current 03 allroad, too.
Mich Pilot Sport A/S work very well. There are a few other UHP A/S tires at the wide and low size, too.
Billy-- I guess what I meant to say is that in North America, side marker lamps are required. In the front they're required to be amber and in the back they're required to be red. In most cars, designers have been albe to integrate both the parking lamps in front and the tail lamps in back to be able to be seen from the side. If the tail lamps (or parking lamps in front) can't be seen from the side, the vehicle has to have a separate lamp assembly in order to have it be seen from the side. A good example is the current Passat ...its tail lights can't be seen from the side so they have a separate rear side marker lamp in the rear fenders.
In our cars, our tail lamps can be seen from the side but in the ecodes, the tail lamps can not. Is that really a big deal or not? ...I don't know. Technically, I suppose it's illegal but I'm sure no cop would even notice if I were to retrofit my tails to the ecode assembly. What I'm giving up to have amber turn signals in the rear is the ability to be seen from the side (rear side) at night.
So, the question is: do we really need rear side marker lamps?
mmmm.....I gotcha. Good point though.....I don't like red turn signals and yup those amber ones would work quite nicely. Do you have a pic of them from the mfg website? Or any pic link to AW? Would luv to see a picture of it.....AFAIK no one here has done this mod.
Billy-- Again, the Euro tail lamp assemblies have amber turn signals, fog lamps on both sides but as said before, no side marker light provisions (although they can be seen slightly from the side but not as much as the US spec assembly).
Here is a pic of the two side-by-side so you can tell how the tail/brake lamp section sort of wraps around the side on the US assembly where on the Euro assembly it doesn't. The one on the left is the US spec (as we have):
Nice.....$249 a pair.....not too shabby.....nice that you live so close to Achtuning. Let me know if you are doing it and take pics and post comments after you are done! But again it's hard to get you move your car so get it done soon!
yup... I know! But I'm debating whether it's worth the money to have amber turn signals and by doing so, not have any side marker lamps. I probably wouldn't hesitate if the side markers were built-in as in our OEM assemblies. So, I have to keep asking: just how important are side markers?
Our tail lamps are relatively dim anyway even with the side marker provision. I'm wondering just how "under-illuminated" our rear ends will be with the Euro set-up.
I was looking at the assembly to see if maybe I could somehow make what now is the fog lamp position, an additional tail lamp so when the light switch is on, I'd have two tail lamps per side ...one at the bottom in the standard position and one at the top of the assembly where the fog lamp is now located. But looking at the assembly, it appears the circuitry is all integrated so it would take a lot of intricate rewiring and soldering to accomplish something like this.
I once saw a thread over at AudiWorld about someone thinking about trying to re-wire the assembly to make the top position (fog lamp position) a brake lamp so that the lamps would function in the traditional European fashion of having a separate tail lamp and a separate brake lamp as the current Golf and Jetta have, for example. I don't know why Audi departed from using this set-up. Years ago, all European cars used this configuration. I believe Mercedes, Volvo, Saab and some BMWs still use it.
So I suppose the point of my diatribe is to point out my dissatisfaction with the B5 A4's tail/brake lamp performance in comparison to other manufacturer's features of clear lenses, starburst designs, unique reflectorization and now even some LED usage. Our lamps are pathetic by comparison. The B6's tails are quite an improvement ...at least they now use two lamps per side for the tail lights.
Here's a wierd one...my wife said the CD player in her 2000 A4 1.8T Quattro quit; she ejected the disc and it was soaking wet! She says there was no smell (like coolant on it), just water. Then the radio started going crazy, jumping stations. The radio seems to work ok now but we haven't tried another CD yet. Any ideas? (She says there's no way anything dripped into the CD slot from the cupholder above the radio.)
Was she listening to Sting's Living Sea? I couldn't pass that one up. Sounds like either a leak in the A/C or possibly water getting in by the windshield. Has it been raining alot?
This test was one of several that a friend of mine and I took over a several day period. The BMW 3 series was better, the Passat 4Motion was better, the Audi A4 1.8T was "not as luxurious" and with the 1.8T engine was not as quick -- but overall the Lexus would have only been picked over the Chrysler 300M Sport, which was also part of the group of "similarly" priced cars. The BMW would have been the second choice after the Audi, followed by the Passat -- which lost mainly due to the lack of a stick shift and sport suspension (model year 2002).
I prefer the IS300's exterior design to a degree, and I love the chronograph gauges as well. What I can't stomach are those ugly, clear taillamps! Also, the interior looks very cheap to me as well. I have a Jetta now, so I am kinda spoiled..
I'm sure you know what the IS300's Toyota background is, therefore you must know why it seems cheap inside. It's another "lets reskin another cheaper Toyota add some psuedo luxury details and call it a Lexus design and charge more!" Thanks, but no thanks. Their sales are suffering miserably for that reason.
I think what Ajayme meant was this. The IS200 (Europe and Asia only I believe)and the IS300 were originally designed and marketed as a Toyota, not a Lexus. While the other vehicles in the Lexus lineup like the LS and the GS were designed and marketed as a Lexus not a Toyota. I hope this make sense.
This is the same reason why I found it very hard to accept the ES300 as a Lexus and not as a high end Camry. Not that its a bad car to drive daily for commuting.
Nissan Maxima ----> Infiniti I35 Infiniti G-35 is the four door Skyline in Asia Infinti M45 ---> Nissan Gloria in Asia and Europe Infiniti G-20 (retired) ----> Nissan Primera in Asia and Europe
Consider the A4 and the passat, they don' t just rebadge the brands like the Japenese... Passat uses old technologies from the A4 and the interior and features of both cars are noticably different.
hi guys, i'm thinking about buying a '03 A4, and I only test drove the 3.0, havent got a chance to test drive the 1.8T. Is the 1.8T pretty good? cos i heard a lot of complaints about their failing ignition coil. I'm also wondering how much I should pay for this car (I can get it for $800 below MSRP). And one more thing, which one is the better idea, buying or leasing, since I drive about 350 miles round trip once a month. Thanx
I like the 1.8T a lot (but with the 5spd manual). It is virtually a bargain. The 3.0 is also nice, but it seems like a lot more money for only a little more performance. And, if you can wait -- the rumor mill says the 1.8T or perhaps 2.0T will be uprated in power and torque (2004?)
The 1.8T version is also very nicely balanced and can be chipped for about $600 which will push its power and torque and performance beyond the 3.0's
Leasing and buying -- the discussions on this town hall must number in the hundreds. There are a minimum of two schools of thought that have been pounded and hammered and argued and discussed.
I favor getting professional advice. I have "repeated" the advice I have received which I grant is first and foremost applicable to MY situation (the advice of my CPA that is what I have repeated: buy what appreciates and rent/lease what depreciates -- your milage may vary, etc.)
I -- and I am sometimes alone in this sentiment -- believe in short term leases 36 months or less and permanent KNOWN payments (since Audis include maintenance) and, IMHO, no hassles, or at least greatly reduced hassles.
Never have an Audi that is out of warranty, by the way. You cannot afford to repair one of them, I don't care how much money you make or have. (And in all fairness this opinion is applicable to virtually all European cars, it is not unique to Audi that you cannot afford to repair them, that is).
Other valid points of view are expressed on this forum and over at audiworld.
The current "kink in the rationale" may be that it might be possible to acquire a new car at virtually no money cost. In some respects at least part of the lease vs buy argument is mitigated in the face of temporarily historically low money costs (sometime 0.0% interest, in fact).
High milage -- generally works against leasing.
Ability to pay 100% cash, CAN work against a lease argument in normal interest rate climates, too.
Financing during periods of high inflation has some appeal to those who like to buy in today's dollars and pay back in future dollars (where's Jimmy Carter when you need him?)
We are at a point of inflection economically speaking -- general logic and calculations from a more "normal" time may not apply.
On the other hand, it is hard to argue against this: car companies ARE hungry for sales, money is cheap and if you have the wherewithall (and the need) now is a pretty good time to buy or lease a car from almost any car company.
Regarding your opinion that one should never have a European car out of warranty. Now if you are correct (and I'm not saying you're not) then wouldn't it stand to reason that the manufacturers' warranty programs would eventually go bankrupt? Unless sales are subsidizing the warranty programs. And then that would mean European cars are overpriced relative to Japanese cars because they are less reliable, relative to Japanese cars.
I've raised this question before - these warranty programs are obviously designed to make money and they are not offered as a type of welfare program. If it were true that "you cannot afford to repair one of them..." [Audi or other European car] ... "I don't care how much money you make or have" then the cost of these extended warranties would be such that nobody could afford to purchase one of these either. European cars - including Audi - unquestionably ARE more expensive to repair than U.S. and Japanese makes, but lots of people own them without going to the poorhouse. I do agree that if someone is basically living paycheck-to-paycheck, with no reserve to draw on in the event they were to incur a major repair, then that person would be taking an unnecessary risk owning any European model that is out of warranty. So far our A4 is two years out of warranty, and the total cost of repairs (not including routine maintenance) is the equivalent of two lease payments - so in our case we are about 22 monthly payments ahead of what it would have cost if the car was still "new" and we were still making payments on it. I realize that other peoples' experience can be quite different.
If the assertion that nobody could afford to own them out of warranty were true then their resale would be virtually zero. In fact the A4's resale has been pretty good.
My 2 year / 22k mile out of warranty A4 has only cost me $250 in repairs for rear end seals. Fortunately for me Audi replaced some big buck items under warranty.
When I considered buying a new A4, the salesman unwittingly talked me out of it, by saying that after 60K miles he didn't really expect any trouble with an Audi. I tend to agree with this, based on the observation that most of the problems seem to stem from lack of preproduction development, but are corrected with time. So if you get a model that has been out for a couple of years and combine it with the warranty period you should have a fairly reliable vehicle out of warranty.
The thing that has been missing from this arguement all along is the actual potential repair costs are the expense of the repairs multiplied by the probably of having that repair. Sure something can be expensive to repair but if it doesn't fail then it's cost is still zero.
One last point being that I agree the expense of repairs is high but if I considered them likely in a car of Audi's price range then I would consider Audis to be junk. Which I don't apparenty neither does the rest of the used car market. My out of warranty A4 is one the the finest driving vehicles that one could possibly own particularly given it's current market value.
In all fairness and consistant with the line of reasoning above there are certain cars which I would be very wary of owning without a warranty, those being the A8's and S Class Benz's. In the case of the A8's there have been enough reports of transmission failures ($12K) to make me think that that they might be a bad bet, though some A8 owners are now starting to believe this can be prevented by unscheduled maintainance. In the case of the S Class the older model had frequent need of air conditioning repairs ($7K). On the other had the earlier Mercedes C Classes have been very reliable. Automobiles are engineered products. Their failures and reliablity are not random acts of God. They stem from the nature of the engineering, testing, manufacturing and field support processes that are used as part of the product development Maybe the point being is that I don't think that you can make a blanket statement about the potential ownership costs on out of warranty German cars. You have to pick and choose based on the expected likelyhood of their reliablity.
I am not suggesting that Audis and other European cars (and now I am told Japanese cars too) are so unreliable that their warranty programs are at risk of bankrupting them (their parent companies).
Can any one of us that is "responsible" self-insure? Or perhaps better asked do many of us have the financial resources that we would place at risk to self insure?
We, most of us I presume, have auto, home and life insurance policies. The cost to rebuild my house after a fire is something that I cannot afford. The cost of rebuilding my car if it is crashed, I may be able to afford, but I certainly cannot afford the liability that would accompany a judgement against me should I injure someone.
Yet no one believes that "running naked" thusly would ever be a consideration.
The warranty and maintenance are "built into" the MSRP of many new cars, such as Audi. Keeping an Audi beyond 50,000 miles with an extended warranty is NOT unaffordable. An additional 50,000 miles of coverage is about $1,000 (perhaps 2 lease payments, eh?). You may -- and proably won't -- need this coverage.
I have never made a claim against my auto insurance, I am 51. Last year I made my first claim agains my homeowners insurance -- and my roof had to be replaced ($16,000+) -- hail damage.
I will continue my auto, home and life insurance "warranties" just as I will continue my "extended repair auto warranties" should I ever keep one of these cars out of original factory warranty.
Having come in some respects to my own defense, but actually more to clarify my previous statements, I still maintain that having an Audi (or other European cars) out of warranty is a possible expensive proposition that very few can afford -- should something go "bump."
I am not suggesting that Audis are so unreliable that they should never be considered for keeping beyond 50,000 miles. Plenty of people do so.
Now, I personally have reasons for not wanting a more than 3 model year old Audi -- which may or may not apply to others, too.
My point remains: IF repairs, beyond minor, are required, Audis (and other EU cars) are breathtakingingly expensive to repair -- and I would never have one without a warranty, as I would not continue to drive with out insurance or live in my house with out insurance.
Warranties and insurance are a way to reduce the costs of relatively rare events -- a way to spread the risks.
And, much as I would like to be able to pick and choose, I still maintain that it is possibly imprudent to say "I'll run naked with an A4 but not an A8, or with a C class but not an S class" any more than it would be to say, well I've never made a claim on my car insurance, so I'll just go without -- heck I'm 51 and haven't needed it so far. . . If you get my drift.
P.S. Every Audi I buy has fewer problems than the ones before -- I would not suggest that "just because it is a used Audi" that it will be unreliable. Quite the contrary. However, when repair costs are generally starting @ multiples of $100 and some repairs are multiples of $1000 -- again I say "why not reduce the financial risk" because none of us can afford to have one of these things fixed if one of these 4 or 5 figure items breaks.
It's great that these extended warranty programs are available for those who cannot afford or otherwise do not want to assume the risk of a major mechanical failure. But in my case, with the A4, I've come to the conclusion that it's a very acceptable (and affordable) risk to take, given my circumstances at least. Right now the car is worth perhaps $12,000-$13,000 as a trade in, so if for example the unforseeable happened and my engine blew up, and it would cost me $12,000 to replace it, I seriously doubt that I would choose to repair the car. Instead I would walk away from it, sell it for parts and scrap metal, and buy or lease a replacement vehicle. While my net worth would take a hit of perhaps $10,000, this would be easily absorbed. And at that point after leasing a new model I would be essentially be in the same position as Mark or anyone else leasing a new vehicle. This is the worst case scenario, and given the remote possibility that this would happen on an engine with just 53,000 that's been meticulously maintained, I'm quite comfortable in assuming this risk. Like mbnut1 says, "the actual potential repair costs are the expense of the repairs multiplied by the probability of having that repair. Sure something can be expensive to repair but if it doesn't fail then it's cost is still zero."
I agree with Mark on the idea of buying homeowners insurance - I'm not going to take the risk of having my house burn down uninsured. In my case that would be about $375,000 whereas the new engine on the A4 might be $10,000. The cost of insuring against each event - annual homeowner premium vs annual extended warranty cost - isn't that much different, but one would be devastating whereas the other would be pretty easily absorbed. With the extended warranty, I probably would have purchased one if the worst case scenario had been $25,000 or $30,000 instead of $10,000, or if the cost to buy one had been $500 instead of $1,500 or more. I will look closely at an extended warranty for our allroad, which will be worth more and probably has greater potential (with its twin turbo engine, air suspension, etc) to incur one of these major breakdowns. But if the cost for buying one ends up being more than the perceived risk (say $3,000 or more), I would likely pass and instead self-insure that risk, or perhaps sell the car and move on to something else. We'll see when the time comes.
In matters of 3rd party liability involving potential negligence, you do not know what the worst case scenario might be, which is why I purchase a personal umbrella which adds a million dollar limit to the liability limits provided by auto and home insurance. This has the potential to truly wipe you out, so it's well worth the $150 or so annual cost.
The bottom line is that your "exposure" in the event of a hideously expensive repair is limited to the replacement value of the car. That is an acceptable risk to me in light of the evidentally hig quality of my A4 and the lack of problems experienced with this high mileage unit (94k).
I have a lot more equity than if if had leased this car and pissed away $15000+.
I assume you paid cash for this car or were able to get "negative" interest rates, for that is the ONLY way to NOT have pissed away money on a depreciating asset. Buying a car on credit (other than negative interest, which I grant IS POSSIBLE since this economic storm started back in 2000) is like buying an ice cube and not keeping it at least at 31 degrees. You know it will melt, and the number of degrees above freezing merely serves to indicate how quickly it turns to water.
Most folks buy a car on credit and rent an apartment -- this is no way to build equity.
Now, having said that do not think I am against owning a car. I just cannot make the numbers work -- FOR ME. The fact that it is possible that others may make it work FOR THEM is something that I grant, but only if they paid CASH or got negative interest rates on the purchase. But very few cars will allow the build up of equity -- and most of the ones that will, are not exactly practical as daily drivers -- unless you're Jay Leno.
Let's play a fun game of leasing vs buying used without the warranty. For the purpose of this exercise we will assume zero interest rates.
Say the used car is 3 years old and has depreciated half it's value to $15K. Now assume that three years from now it is worth half as much ie $7500. The net cost for that three years is $7500. Of course this assumes zero maintainance and repair costs.
Leasing a new will be definition have to cost at least twice as much at this point simply because of the the depreciation has been twice as much. We now have a differential of $7500 worth of maintainance and repairs on the used car before we have spent as much as the leased one. If you increase the interest rates the differential increases.
3rd party liability is presumeably covered under your auto insurance. So even if your brakes fail and you run over someone, you're covered.
I think what this discussion boils down to is how risk-adverse one is. If someone is highly risk-adverse, he would probably buy an extended warranty even for a Camry or Accord.
At the risk of whatever, I would like some follow up, please.
The cost of the Audi extended warranty -- the amount of the check I would have to write to make my Audi have the extra warranty (2 years or 100,000 miles) beyond the factory warranty is about $1,000.
If one had purchased a 3 year old Audi that had 50,000 miles on it, it would be "worth" around 45% of MSRP, although some say 40% in current times because of the low cost (monthly) of a brand new car due to the many incentives that are available.
But, assume the 3 year old S4 was $40,000 original MSRP. The cost to buy one WITH the Audi exentended warranty would be ($40,000 x .45) + $1,000 = $19,000. Apparently the cost of the extended warranty would be the same on an A8 too.
This is not a turbo trick question, so if you want to say "yes but this only applies to turbos or whatever" I'll grant that. On day one, if the used Audi had 45,000 miles on it, it would technically still have 5,000 miles of original warranty on it -- but in about 4 months, at that rate, it would have none, unless you had purchased that extra warranty.
Here is the point/question: if the average 3 year old Audi is worth (at retail) about $20,000, is an approximate additional 5% for "no suprises" NOT worth it? Order of magnitude, this still seems to track with auto, health, home and life insurance. Other than my Zyrtec prescription I have, thus far, had no value out of my health insurance -- and could have gone without it. Now at age 51, I do not feel like risking it and I can't get my prior premiums refunded.
If you could get your brand new car without a warranty and the cost would be 5% less would you?
Perhaps many would rather take the chance on a new car without a warranty rather than a car with 50,000 miles on it. Maybe warranty should be an optional extra is the point. It certainly is on used cars.
Often the car has a greater value than just its book value -- especially since many folks will finance a used car and be upside down on it and therfore cannot simply say, "I can make the decision to walk away from a $10,000 repair on a car which if it didn't need the repair might command $10,000 in the market place."
I have not been discussing the merits of an extended warranty on a car that has substantially lost most or all of its marektability.
This lively discussion has, I believe, been pertaining to relatively young Audis (and other similarly priced EU cars). I probably would not acquire a 1985 Audi Coupe and put an extended warranty on it, for the reasons cited above. However, a newer than 1999 Audi would be a prime candidate for the extended warranty so that I would not have to otherwise self insure by keeping an unknown amount of cash in reserve for the possible transmission replacement in a 2000 A4.
I would have a hard time suggesting that someone buy or lease a used Audi (in the years mentioned) without considering an extended warranty -- because although I probably can AFFORD just about any repair, the opportunity cost of doing so is equal to or higher than that one time $1,000 insurance policy.
In my case, I have selected a permanent lease payment and always driving a young, current, car. As I age, my proclivity to continue this behavior, I grant you, may change.
Indeed, today I mused that I might like to keep my 03 allroad "forever" I like the car so much. My wife responded, "you're nuts, you couldn't stand knowing that there was a newer version with features and options that you can't even dream of now." She's probably right.
So, for me, I will not be keeping one of these fine cars beyond 50,000 miles -- but I am adamant in my urging of those that do want to go beyond the warranty to at least consider the fact that Audis are expensive to repair, even if only 2% ever have "the big need." By the way, I have no evidence to support the 2%, it might be lower or higher for all I know.
While I'm opinining -- one of the folks I work with has an Avalon, another has an accord. The repair bills on these cars are every bit as breathtaking as they are on Audis.
Every little visit to the Toyota dealer is $800, and I'm not certain what has broken, so says my friend.
He has taken to leave the Check Engine light permanently on -- writing it off to the gas cap or the emissions system. The wheel bearings roar constanstly, so much so that you would think he had 4 snow tires on the thing.
So, perhaps the intended comment was that Camry's need LESS TLC -- and anecdotally this would seem to be true. My anecdotes however would say that many of the same issues happen to the Toyotas I "know" and while I would not ignore the issues, perhaps Toyota owners (to name one brand) or at least some of them are not as particular about their car's being "perfect."
Again Camry's and Accords do indeed have legendary reliability -- everyone says so. In my observation those who own and drive Audis, BMWs and Mercedes -- to name only three -- don't tolerate the problems as well as some who own and drive the Japanese brands discussed.
Maybe those of us who drive EU cars are nit pickers -- broadly speaking. Maybe those who drive Camrys and Accords pick fewer nits. And of course, I still leave open the possibility or probability that these Japanese brands truly are substantially more reliable -- you just can't prove by me.
Mark, yes I have paid cash for my last 6 cars including the A4. So I haven't had a car payment for nearly 15 years and I've sort of gotten used to that.
But as far as depreciation goes, you are of course paying for depreciation whether you decide to lease or buy, and we all know that the depreciation cost, both in percentage terms and actual dollar amount, is highest in the first year. After that it gradually tapers off. So even if you choose to finance the purchase by leasing, you are still paying finance charges (the money factor) in addition to the depreciation (the residual). In addition to the negotiated purchase price, both are built in. In general, the finance charge portion is reflective of the interest rate climate at the time. That said, depending on the terms being offered, leasing may very well turn out to be a cheaper alternative than buying due to special dealer incentive programs. Conversely, buying may be a better alternative when special incentives as "zero rate financing terms" are made available in order to clear excess inventory off the lots. And in today's low interest rate environment, even if the rate is not zero, it may still pay to finance a new purchase (rather than paying cash) if the rate being offered is low enough and you're pretty sure that you plan to keep it for several years beyond the payment period. As with the extended warranty question, each situation is different and you have to run the numbers.
I do have one question relating to your post 5120. Have you been offered an extended warranty on the allroad for just $1,000? I thought they were much higher than that. At $1,000 I would definitely go for it. On the A4, it would not have paid off for me, as the additional 2 years would have already expired, and my out-of-pocket repair costs were less than $1,000. But even with the A4, $1,000 would be a reasonable sum for the piece of mind, I would agree.
I agree with everything you said, and indeed what I had mentioned earlier -- "negative" interest rates, that is rates that are either zero or so low as to be "stimulative" when prevailing inflation is factored in.
I also agree that leasing has an imputed cost of money, but it also is the cost of the use of the car, not the attempt to acquire ownership.
For each individual, their situation may dictate lease versus buy. So Again I Agree.
And the $1000 was what my dealer told me I could pay "at this moment" if I wanted to keep my 2001 A6 4.2.
You must be the less than 1% that actually pays cash for cars -- and that is meant as a compliment.
My dealer says that about 75% of the Audis he sells are leased. I assume that the other 25% are either financed or paid for with a check outright.
I bought 1 Audi, a 1987 5000 CS quattro in cash, kept it until 50,000 miles and traded it in. I leased the next one because I "did some arithmetic" and found that I would have come out ahead if I would have leased the car and put the difference in a growth+income mutual fund. Although I did have "equity" in the thing at 50,000 miles, I would have had more NAV (net asset value) had I simply put the difference into the Windsor fund from Vanguard -- and I could have turned it into cash more quickly.
Again, this does not PROVE that leasing is a better deal than buying. I do not suggest that it does -- or at least I do not suggest that it does for everyone. This instance was what prompted me to ask my CPA for advice, which at the time was and still remains, "for you Mark, leasing makes the most sense -- and generally one should lease what depreciates and buy what appreciates; most Americans finance cars and rent apartments -- which is backwards from an accumulation of wealth standpoint."
As I mentioned, at age 51, I keep thinking it would be a good thing to keep my 03 allroad.
an extended warranty to $100k is a great idea if you can get one for $1000, I would definitely recommend that.
I bought my 98 A4Q Avant in '00 with 53k on it and a CPO warranty to 75k @ no extra charge. After it ran out I was offered an independent warranty to $100K for $2000. I declined it because Ihave confidence in this car. This particular car could be exceptional but it's easily the least troublesome I've ever owned including a couple of Hondas. To be fair I've also owned a couple of real crocks and what few repairs I've needed have been expensive.
I bought my 1998 A4 2.8 quattro in cash. Seemed to work out pretty well, I still have it, it's got about 57K on it now. I'll probably keep it for another 3 or 4 years. The last couple years I've only been putting about 4K miles on it each year.
Unfortunately, I haven't driven it in a week, as that side of the driveway is still semi snowed-in. I've been favoring driving my 4Runner lately.
As far as renting/buying of real estate, what I've heard is that the break-even point is about 3 years. If you're gonna be in a spot for longer than that, it makes financial sense to buy, otherwise, renting is better.
I know it has nothing to do with the A4, but even if you decide to buy a house and only stay there 2 years, the value is going to go up in 2 years. In addition, you get alot more back on taxes as a property owner than you do renting. I don't understand people renting apartments but driving luxury cars either, that always amazes me.
We, when we talk about cars, leasing, buying, real estate, etc etc etc, are speaking in broad generalizations that can and do change regularly and frequently. For example the past couple of years have been terrible in the stock market and great in housing -- I have been refinancing my house every year for the last three years in a row first to 7.5%, then to 6.5% and finally to 5.5% (for 15 years) I cut off 5 year off my mortgage and almost $400 a month last time!
So, the debates are lively and thought provoking and I hope no one would literally take "our" advice without running it up the flagpole of "their situation" which may make one of us lease, another finance and yet another buy.
My most recent CPA newletter had an article on "why lease?" -- the conclusion, again a broad generalization -- "for many, leasing is the most economical way to own a car -- but it is NOT for everyone."
Now on the real estate statement, since I refinanced my mortage recently and backwards for a couple of years, the "escalation" in appraised value has been dizzying. And in the 10 years I have lived in my house it has been appraised now for almost double what I paid for it in 1991!
This too shall, almost certainly, pass -- Dr. Alan will be raising interest rates, I'll wager, sometime in 2003, barring some economic catastrophy.
Keep the posts coming -- the A6 board is just about dead, as is the allroad board.
interest rates will surely rise. Even if there is an economic catastrophe. Unless the government can reduce it's growing deficits it must either borrow (higher interest rates) or print more money (inflation).
In our case we refinanced nine years ago to a 7 year fixed (5 7/8%) rate balloon and managed to pay it off in those 7 years. Glad we put the extra money into the house - if we had not these extra principal payments would have gone into the market at the inflated inflated prices until it peaked in early 2000. Our discussion here of vehicle extended warranties and depreciation reminds me of the fact that the depreciation on our cars has been no worse than the stock market decline since then - at least we've had an appreciating real estate market to at least partially offset these losses.
On a brighter note, I drove my wife's A4 into work today as she wanted to take the allroad since she needed the extra room for some passengers at work today. Happy to report that the A4 is still running quiet and smooth (on occasion in the past, my wife has somehow not noticed strange little noises, a deflated tire, etc on her car, so it's always been a good idea for me to drive her car once in a while). On the A4 I did notice that after the long winter just now coming to and end here in Minnesota that it defintely needs a good interior detailing job, especially the carpeting which picked up some dirt and salt residue, espeicially on the sides of the winter floor mats. Other than that it came through in good shape as the exterior paint and inside leather still look like new. I still love the lines of the original A4, and that original "Aluminum Silver" color was one of Audi's best ever, IMO.
My '98 is that color, too. I do also like the lines better on the first generation of the A4 more than the 2002+ ones.
I wasn't too picky about color when I got mine, and with the options I wanted, I chose between that and black. I liked the black a bit better, but I hate how stinking hot those get in the sun. Now if I could have found one in the green metallic (whatever they called it that year), that was about my favorite color for the car.
Comments
So your verdict is that the 3.0 is not underpowered? Have you tried it with a full load going up to, say, Whistler? Thanks for any insight you could offer.
Scirocco, big *slap* on your face for putting on only 3300 miles in 2 yrs!!!!! My God, you better move the car like a few inches every week cuz the dead steady weight on the same patch of tire is going to get you flat spots on the tires!!! Mine just reached 30k in its 2 yr anniversary 2 weeks ago. 15k/yr, not bad driving in Chicagoland.
MarkC, I think the TT's final assembly is in Hungary, cuz the VIN number starts with a T instead of a W. W is for Deutschland while T is for Hungary. I think they use the final assembly point as the country of manufacturing.
Billy
No I haven't try driving the car up to Whistler yet but I will someday, since snow in the west coast is so bad this year =(. However, I did drove the car to Hemlock resort the road there were pretty rough and I am carrying 2 snowboards and 5 passengers in the car 2 adults and 3 children. I can overtake other cars rather easily, while all those rugged suv struggle to head up because of the tight roads.
For extra powers the S mode comes in very handy, I can notice instantly the difference, the RPM gauge will usually reach 5000 rpm before it upshift to the next gear.
3.0 is eunogh to satisfy most people, if you want more power the S4 will be available or simply chip it if you want to void the warranty
A long time ago, I think we talked about using Ecode tails so that the rear turn-signal lamps would be amber. Did you ever do that? A place locally --they're actually less than 2 miles from my house-- are selling them and I went down to see them recently. The only thing that kept me from buying them is they don't have any side (rear) marker lamp provisions. I guess it's only in north america that it's required that vehicles have side marker lamps? ...or at least they're not required in Europe. So, just wondering if you (or anyone else reading this who has a B5) have retrofitted your tail-lamp assembly with the Ecode assmebly?
Paul-- Man, so you put on about, what, 25k/yr?? ...yeah, that's definitely more than the average joe! ...I suppose you're definitely not a candidate for a lease.
Brian-- *omg* jeez, I'm sorry to hear about your experiences the past year. I do remember your mentioning the first accident but I didn't realize you had a second one. It's disappointing that it's soured you completely on that particular car. But, yeah, if you can swing the used S4 idea then I think that's the way to go. I too didn't think I could afford the S4 two years ago but now I regret not having spent a little more and getting the S4. At the time, I thought I was really stretching my budget and going into uncharted territory just buy buying an A4 but my philosopy about life has changed considerably since then. As I've said, I'm now looking forward to shopping for the next generation S4 and possibly getting one of those.
Interesting comments on your coil pack experience. Thanks for mentioning it. I guess I'm going to press my dealer on seeing about getting them all replaced if a recall hasn't happened by the time I make my service appointment next month. VW has already issued a recall, right?
Good luck and I hope things are looking up for you now ...it sounds like it. Keep us posted on your hunt for a good used S4.
--'rocco
I commute about 80 miles round trip a day. I might end up getting a TDI next time, definitely would be alot of savings for someone like me. I got the 1.8T now though, because I am power hungry..
Electric seats are nice byt not really needed . Heated seats make sense if you live east of Vancouver. My feeling about the motor is that after 20,000 klicks its hard on the gas and in my view the car needs more without getting silly.
I think a lot of countries don't require the reflective things inside the assemblies.....that's why the Ecodes don't have the yellow reflective things in them.
Billy
I traded the 2000 A6 in on a 2001 A6 with the sport suspension, seats and wheels and tires.
As far as RIDE quality goes, I could tell virtually no diff between the 00 and 01 A6. The 01 did "hunker down" more in the twisties. That is to say, the 01 had less body roll.
The 99 had the worst handling of the three and overall a pretty nice (softer) ride -- kinda reminded me of a Chrysler 300M with sport suspension -- which is to say "not bad."
The penalty, so to speak, for the wheels and tires and the sport suspension is "nil" in my opinion.
The handling improvement overall is subtle but when you really push it, the sports suspension and the lower profile tires (and wider too) equipped versions are hands-down superior.
Finally, the summer only tires that MAY come on a car so equipped are not very helpful once the temperature goes and remains below 40F. Snow traction is "OK" but since it is usually below 32 to have snow still on the road (here in moderate winter Cincinnati) the summer tires, uh, well -- they suck.
I switched to Ultra High Performance All Season tires on my 01 A6 4.2 w/sport package. I have this type of tire on my current 03 allroad, too.
Mich Pilot Sport A/S work very well. There are a few other UHP A/S tires at the wide and low size, too.
In our cars, our tail lamps can be seen from the side but in the ecodes, the tail lamps can not. Is that really a big deal or not? ...I don't know. Technically, I suppose it's illegal but I'm sure no cop would even notice if I were to retrofit my tails to the ecode assembly. What I'm giving up to have amber turn signals in the rear is the ability to be seen from the side (rear side) at night.
So, the question is: do we really need rear side marker lamps?
--'rocco
Billy
Here is a pic of the two side-by-side so you can tell how the tail/brake lamp section sort of wraps around the side on the US assembly where on the Euro assembly it doesn't. The one on the left is the US spec (as we have):
http://www.taner.net/s4/euro_tails/pics/T-p1010006.jpg
Or, here's the US spec (like ours):
http://www.taner.net/s4/euro_tails/pics/T-p1010007.jpg
And, here's the Euro:
http://www.taner.net/s4/euro_tails/pics/T-p1010008.jpg
Here is the Euro lit up:
http://www.taner.net/s4/euro_tails/pics/euro_tails-sm.jpg
Here is Tanner's instructions and a whole host of pics:
http://www.taner.net/s4/euro_tails/
http://www.taner.net/s4/euro_tails/pics/
Here's the place where I will probably buy them from which is located only a few miles from where I live:
http://www.achtuning.com/
They're about $249/pr.
http://www.achtuning.com/europarts.html
--'rocco
Billy
Our tail lamps are relatively dim anyway even with the side marker provision. I'm wondering just how "under-illuminated" our rear ends will be with the Euro set-up.
I was looking at the assembly to see if maybe I could somehow make what now is the fog lamp position, an additional tail lamp so when the light switch is on, I'd have two tail lamps per side ...one at the bottom in the standard position and one at the top of the assembly where the fog lamp is now located. But looking at the assembly, it appears the circuitry is all integrated so it would take a lot of intricate rewiring and soldering to accomplish something like this.
I once saw a thread over at AudiWorld about someone thinking about trying to re-wire the assembly to make the top position (fog lamp position) a brake lamp so that the lamps would function in the traditional European fashion of having a separate tail lamp and a separate brake lamp as the current Golf and Jetta have, for example. I don't know why Audi departed from using this set-up. Years ago, all European cars used this configuration. I believe Mercedes, Volvo, Saab and some BMWs still use it.
So I suppose the point of my diatribe is to point out my dissatisfaction with the B5 A4's tail/brake lamp performance in comparison to other manufacturer's features of clear lenses, starburst designs, unique reflectorization and now even some LED usage. Our lamps are pathetic by comparison. The B6's tails are quite an improvement ...at least they now use two lamps per side for the tail lights.
--'rocco
This test was one of several that a friend of mine and I took over a several day period. The BMW 3 series was better, the Passat 4Motion was better, the Audi A4 1.8T was "not as luxurious" and with the 1.8T engine was not as quick -- but overall the Lexus would have only been picked over the Chrysler 300M Sport, which was also part of the group of "similarly" priced cars. The BMW would have been the second choice after the Audi, followed by the Passat -- which lost mainly due to the lack of a stick shift and sport suspension (model year 2002).
This is the same reason why I found it very hard to accept the ES300 as a Lexus and not as a high end Camry. Not that its a bad car to drive daily for commuting.
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
Infiniti G-35 is the four door Skyline in Asia
Infinti M45 ---> Nissan Gloria in Asia and Europe
Infiniti G-20 (retired) ----> Nissan Primera in Asia and Europe
Consider the
A4 and the passat, they don' t just rebadge the brands like the Japenese... Passat uses old technologies from the A4 and the interior and features of both cars are noticably different.
The 1.8T version is also very nicely balanced and can be chipped for about $600 which will push its power and torque and performance beyond the 3.0's
Leasing and buying -- the discussions on this town hall must number in the hundreds. There are a minimum of two schools of thought that have been pounded and hammered and argued and discussed.
I favor getting professional advice. I have "repeated" the advice I have received which I grant is first and foremost applicable to MY situation (the advice of my CPA that is what I have repeated: buy what appreciates and rent/lease what depreciates -- your milage may vary, etc.)
I -- and I am sometimes alone in this sentiment -- believe in short term leases 36 months or less and permanent KNOWN payments (since Audis include maintenance) and, IMHO, no hassles, or at least greatly reduced hassles.
Never have an Audi that is out of warranty, by the way. You cannot afford to repair one of them, I don't care how much money you make or have. (And in all fairness this opinion is applicable to virtually all European cars, it is not unique to Audi that you cannot afford to repair them, that is).
Other valid points of view are expressed on this forum and over at audiworld.
The current "kink in the rationale" may be that it might be possible to acquire a new car at virtually no money cost. In some respects at least part of the lease vs buy argument is mitigated in the face of temporarily historically low money costs (sometime 0.0% interest, in fact).
High milage -- generally works against leasing.
Ability to pay 100% cash, CAN work against a lease argument in normal interest rate climates, too.
Financing during periods of high inflation has some appeal to those who like to buy in today's dollars and pay back in future dollars (where's Jimmy Carter when you need him?)
We are at a point of inflection economically speaking -- general logic and calculations from a more "normal" time may not apply.
On the other hand, it is hard to argue against this: car companies ARE hungry for sales, money is cheap and if you have the wherewithall (and the need) now is a pretty good time to buy or lease a car from almost any car company.
This won't last forever, either.
My 2 year / 22k mile out of warranty A4 has only cost me $250 in repairs for rear end seals. Fortunately for me Audi replaced some big buck items under warranty.
When I considered buying a new A4, the salesman unwittingly talked me out of it, by saying that after 60K miles he didn't really expect any trouble with an Audi. I tend to agree with this, based on the observation that most of the problems seem to stem from lack of preproduction development, but are corrected with time. So if you get a model that has been out for a couple of years and combine it with the warranty period you should have a fairly reliable vehicle out of warranty.
The thing that has been missing from this arguement all along is the actual potential repair costs are the expense of the repairs multiplied by the probably of having that repair. Sure something can be expensive to repair but if it doesn't fail then it's cost is still zero.
One last point being that I agree the expense of repairs is high but if I considered them likely in a car of Audi's price range then I would consider Audis to be junk. Which I don't apparenty neither does the rest of the used car market. My out of warranty A4 is one the the finest driving vehicles that one could possibly own particularly given it's current market value.
Automobiles are engineered products. Their failures and reliablity are not random acts of God. They stem from the nature of the engineering, testing, manufacturing and field support processes that are used as part of the product development
Maybe the point being is that I don't think that you can make a blanket statement about the potential ownership costs on out of warranty German cars. You have to pick and choose based on the expected likelyhood of their reliablity.
Can any one of us that is "responsible" self-insure? Or perhaps better asked do many of us have the financial resources that we would place at risk to self insure?
We, most of us I presume, have auto, home and life insurance policies. The cost to rebuild my house after a fire is something that I cannot afford. The cost of rebuilding my car if it is crashed, I may be able to afford, but I certainly cannot afford the liability that would accompany a judgement against me should I injure someone.
Yet no one believes that "running naked" thusly would ever be a consideration.
The warranty and maintenance are "built into" the MSRP of many new cars, such as Audi. Keeping an Audi beyond 50,000 miles with an extended warranty is NOT unaffordable. An additional 50,000 miles of coverage is about $1,000 (perhaps 2 lease payments, eh?). You may -- and proably won't -- need this coverage.
I have never made a claim against my auto insurance, I am 51. Last year I made my first claim agains my homeowners insurance -- and my roof had to be replaced ($16,000+) -- hail damage.
I will continue my auto, home and life insurance "warranties" just as I will continue my "extended repair auto warranties" should I ever keep one of these cars out of original factory warranty.
Having come in some respects to my own defense, but actually more to clarify my previous statements, I still maintain that having an Audi (or other European cars) out of warranty is a possible expensive proposition that very few can afford -- should something go "bump."
I am not suggesting that Audis are so unreliable that they should never be considered for keeping beyond 50,000 miles. Plenty of people do so.
Now, I personally have reasons for not wanting a more than 3 model year old Audi -- which may or may not apply to others, too.
My point remains: IF repairs, beyond minor, are required, Audis (and other EU cars) are breathtakingingly expensive to repair -- and I would never have one without a warranty, as I would not continue to drive with out insurance or live in my house with out insurance.
Warranties and insurance are a way to reduce the costs of relatively rare events -- a way to spread the risks.
And, much as I would like to be able to pick and choose, I still maintain that it is possibly imprudent to say "I'll run naked with an A4 but not an A8, or with a C class but not an S class" any more than it would be to say, well I've never made a claim on my car insurance, so I'll just go without -- heck I'm 51 and haven't needed it so far. . . If you get my drift.
P.S. Every Audi I buy has fewer problems than the ones before -- I would not suggest that "just because it is a used Audi" that it will be unreliable. Quite the contrary. However, when repair costs are generally starting @ multiples of $100 and some repairs are multiples of $1000 -- again I say "why not reduce the financial risk" because none of us can afford to have one of these things fixed if one of these 4 or 5 figure items breaks.
I agree with Mark on the idea of buying homeowners insurance - I'm not going to take the risk of having my house burn down uninsured. In my case that would be about $375,000 whereas the new engine on the A4 might be $10,000. The cost of insuring against each event - annual homeowner premium vs annual extended warranty cost - isn't that much different, but one would be devastating whereas the other would be pretty easily absorbed. With the extended warranty, I probably would have purchased one if the worst case scenario had been $25,000 or $30,000 instead of $10,000, or if the cost to buy one had been $500 instead of $1,500 or more. I will look closely at an extended warranty for our allroad, which will be worth more and probably has greater potential (with its twin turbo engine, air suspension, etc) to incur one of these major breakdowns. But if the cost for buying one ends up being more than the perceived risk (say $3,000 or more), I would likely pass and instead self-insure that risk, or perhaps sell the car and move on to something else. We'll see when the time comes.
In matters of 3rd party liability involving potential negligence, you do not know what the worst case scenario might be, which is why I purchase a personal umbrella which adds a million dollar limit to the liability limits provided by auto and home insurance. This has the potential to truly wipe you out, so it's well worth the $150 or so annual cost.
Like Mark says, I love a lively debate...
I have a lot more equity than if if had leased this car and pissed away $15000+.
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
Most folks buy a car on credit and rent an apartment -- this is no way to build equity.
Now, having said that do not think I am against owning a car. I just cannot make the numbers work -- FOR ME. The fact that it is possible that others may make it work FOR THEM is something that I grant, but only if they paid CASH or got negative interest rates on the purchase. But very few cars will allow the build up of equity -- and most of the ones that will, are not exactly practical as daily drivers -- unless you're Jay Leno.
Say the used car is 3 years old and has depreciated half it's value to $15K. Now assume that three years from now it is worth half as much ie $7500. The net cost for that three years is $7500. Of course this assumes zero maintainance and repair costs.
Leasing a new will be definition have to cost at least twice as much at this point simply because of the the depreciation has been twice as much. We now have a differential of $7500 worth of maintainance and repairs on the used car before we have spent as much as the leased one. If you increase the interest rates the differential increases.
I think what this discussion boils down to is how risk-adverse one is. If someone is highly risk-adverse, he would probably buy an extended warranty even for a Camry or Accord.
The cost of the Audi extended warranty -- the amount of the check I would have to write to make my Audi have the extra warranty (2 years or 100,000 miles) beyond the factory warranty is about $1,000.
If one had purchased a 3 year old Audi that had 50,000 miles on it, it would be "worth" around 45% of MSRP, although some say 40% in current times because of the low cost (monthly) of a brand new car due to the many incentives that are available.
But, assume the 3 year old S4 was $40,000 original MSRP. The cost to buy one WITH the Audi exentended warranty would be ($40,000 x .45) + $1,000 = $19,000. Apparently the cost of the extended warranty would be the same on an A8 too.
This is not a turbo trick question, so if you want to say "yes but this only applies to turbos or whatever" I'll grant that. On day one, if the used Audi had 45,000 miles on it, it would technically still have 5,000 miles of original warranty on it -- but in about 4 months, at that rate, it would have none, unless you had purchased that extra warranty.
Here is the point/question: if the average 3 year old Audi is worth (at retail) about $20,000, is an approximate additional 5% for "no suprises" NOT worth it? Order of magnitude, this still seems to track with auto, health, home and life insurance. Other than my Zyrtec prescription I have, thus far, had no value out of my health insurance -- and could have gone without it. Now at age 51, I do not feel like risking it and I can't get my prior premiums refunded.
If you could get your brand new car without a warranty and the cost would be 5% less would you?
Perhaps many would rather take the chance on a new car without a warranty rather than a car with 50,000 miles on it. Maybe warranty should be an optional extra is the point. It certainly is on used cars.
Often the car has a greater value than just its book value -- especially since many folks will finance a used car and be upside down on it and therfore cannot simply say, "I can make the decision to walk away from a $10,000 repair on a car which if it didn't need the repair might command $10,000 in the market place."
I have not been discussing the merits of an extended warranty on a car that has substantially lost most or all of its marektability.
This lively discussion has, I believe, been pertaining to relatively young Audis (and other similarly priced EU cars). I probably would not acquire a 1985 Audi Coupe and put an extended warranty on it, for the reasons cited above. However, a newer than 1999 Audi would be a prime candidate for the extended warranty so that I would not have to otherwise self insure by keeping an unknown amount of cash in reserve for the possible transmission replacement in a 2000 A4.
I would have a hard time suggesting that someone buy or lease a used Audi (in the years mentioned) without considering an extended warranty -- because although I probably can AFFORD just about any repair, the opportunity cost of doing so is equal to or higher than that one time $1,000 insurance policy.
In my case, I have selected a permanent lease payment and always driving a young, current, car. As I age, my proclivity to continue this behavior, I grant you, may change.
Indeed, today I mused that I might like to keep my 03 allroad "forever" I like the car so much. My wife responded, "you're nuts, you couldn't stand knowing that there was a newer version with features and options that you can't even dream of now." She's probably right.
So, for me, I will not be keeping one of these fine cars beyond 50,000 miles -- but I am adamant in my urging of those that do want to go beyond the warranty to at least consider the fact that Audis are expensive to repair, even if only 2% ever have "the big need." By the way, I have no evidence to support the 2%, it might be lower or higher for all I know.
Every little visit to the Toyota dealer is $800, and I'm not certain what has broken, so says my friend.
He has taken to leave the Check Engine light permanently on -- writing it off to the gas cap or the emissions system. The wheel bearings roar constanstly, so much so that you would think he had 4 snow tires on the thing.
So, perhaps the intended comment was that Camry's need LESS TLC -- and anecdotally this would seem to be true. My anecdotes however would say that many of the same issues happen to the Toyotas I "know" and while I would not ignore the issues, perhaps Toyota owners (to name one brand) or at least some of them are not as particular about their car's being "perfect."
Again Camry's and Accords do indeed have legendary reliability -- everyone says so. In my observation those who own and drive Audis, BMWs and Mercedes -- to name only three -- don't tolerate the problems as well as some who own and drive the Japanese brands discussed.
Maybe those of us who drive EU cars are nit pickers -- broadly speaking. Maybe those who drive Camrys and Accords pick fewer nits. And of course, I still leave open the possibility or probability that these Japanese brands truly are substantially more reliable -- you just can't prove by me.
But as far as depreciation goes, you are of course paying for depreciation whether you decide to lease or buy, and we all know that the depreciation cost, both in percentage terms and actual dollar amount, is highest in the first year. After that it gradually tapers off. So even if you choose to finance the purchase by leasing, you are still paying finance charges (the money factor) in addition to the depreciation (the residual). In addition to the negotiated purchase price, both are built in. In general, the finance charge portion is reflective of the interest rate climate at the time. That said, depending on the terms being offered, leasing may very well turn out to be a cheaper alternative than buying due to special dealer incentive programs. Conversely, buying may be a better alternative when special incentives as "zero rate financing terms" are made available in order to clear excess inventory off the lots. And in today's low interest rate environment, even if the rate is not zero, it may still pay to finance a new purchase (rather than paying cash) if the rate being offered is low enough and you're pretty sure that you plan to keep it for several years beyond the payment period. As with the extended warranty question, each situation is different and you have to run the numbers.
I do have one question relating to your post 5120. Have you been offered an extended warranty on the allroad for just $1,000? I thought they were much higher than that. At $1,000 I would definitely go for it. On the A4, it would not have paid off for me, as the additional 2 years would have already expired, and my out-of-pocket repair costs were less than $1,000. But even with the A4, $1,000 would be a reasonable sum for the piece of mind, I would agree.
I also agree that leasing has an imputed cost of money, but it also is the cost of the use of the car, not the attempt to acquire ownership.
For each individual, their situation may dictate lease versus buy. So Again I Agree.
And the $1000 was what my dealer told me I could pay "at this moment" if I wanted to keep my 2001 A6 4.2.
My dealer says that about 75% of the Audis he sells are leased. I assume that the other 25% are either financed or paid for with a check outright.
I bought 1 Audi, a 1987 5000 CS quattro in cash, kept it until 50,000 miles and traded it in. I leased the next one because I "did some arithmetic" and found that I would have come out ahead if I would have leased the car and put the difference in a growth+income mutual fund. Although I did have "equity" in the thing at 50,000 miles, I would have had more NAV (net asset value) had I simply put the difference into the Windsor fund from Vanguard -- and I could have turned it into cash more quickly.
Again, this does not PROVE that leasing is a better deal than buying. I do not suggest that it does -- or at least I do not suggest that it does for everyone. This instance was what prompted me to ask my CPA for advice, which at the time was and still remains, "for you Mark, leasing makes the most sense -- and generally one should lease what depreciates and buy what appreciates; most Americans finance cars and rent apartments -- which is backwards from an accumulation of wealth standpoint."
As I mentioned, at age 51, I keep thinking it would be a good thing to keep my 03 allroad.
I bought my 98 A4Q Avant in '00 with 53k on it and a CPO warranty to 75k @ no extra charge.
After it ran out I was offered an independent warranty to $100K for $2000. I declined it because Ihave confidence in this car. This particular car could be exceptional but it's easily the least troublesome I've ever owned including a couple of Hondas. To be fair I've also owned a couple of real crocks and what few repairs I've needed have been expensive.
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
Unfortunately, I haven't driven it in a week, as that side of the driveway is still semi snowed-in. I've been favoring driving my 4Runner lately.
As far as renting/buying of real estate, what I've heard is that the break-even point is about 3 years. If you're gonna be in a spot for longer than that, it makes financial sense to buy, otherwise, renting is better.
So, the debates are lively and thought provoking and I hope no one would literally take "our" advice without running it up the flagpole of "their situation" which may make one of us lease, another finance and yet another buy.
My most recent CPA newletter had an article on "why lease?" -- the conclusion, again a broad generalization -- "for many, leasing is the most economical way to own a car -- but it is NOT for everyone."
Now on the real estate statement, since I refinanced my mortage recently and backwards for a couple of years, the "escalation" in appraised value has been dizzying. And in the 10 years I have lived in my house it has been appraised now for almost double what I paid for it in 1991!
This too shall, almost certainly, pass -- Dr. Alan will be raising interest rates, I'll wager, sometime in 2003, barring some economic catastrophy.
Keep the posts coming -- the A6 board is just about dead, as is the allroad board.
Hello, is this thing on???
(inflation).
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
On a brighter note, I drove my wife's A4 into work today as she wanted to take the allroad since she needed the extra room for some passengers at work today. Happy to report that the A4 is still running quiet and smooth (on occasion in the past, my wife has somehow not noticed strange little noises, a deflated tire, etc on her car, so it's always been a good idea for me to drive her car once in a while). On the A4 I did notice that after the long winter just now coming to and end here in Minnesota that it defintely needs a good interior detailing job, especially the carpeting which picked up some dirt and salt residue, espeicially on the sides of the winter floor mats. Other than that it came through in good shape as the exterior paint and inside leather still look like new. I still love the lines of the original A4, and that original "Aluminum Silver" color was one of Audi's best ever, IMO.
I wasn't too picky about color when I got mine, and with the options I wanted, I chose between that and black. I liked the black a bit better, but I hate how stinking hot those get in the sun. Now if I could have found one in the green metallic (whatever they called it that year), that was about my favorite color for the car.