Volkswagen Jetta 2005 and earlier

vocus

My car did that one time. I had started it up, and put it into gear rather quickly. I usually wait like 30 seconds, but this time I took right off. So the car started like almost sputtering for a second. I put the car in Neutral, revved it a little tiny bit, then it was fine. I have never experienced that again. My car is a 2002 Tiptronic 1.8T with almost 14K miles on it.

blueguydotcom

It doesn't matter where you put the money, as long as it's not down on a lease. Spread 2500 out over 3 years, rather than losing it all at once. If a person can afford to make $250 a month payments with $2500 down, then that same person can make $300 payments over 3 years with zero down. The big difference, he's got the 2500 from the start and he can use it in a myriad of ways that are more profitable...a simple money management account, playing craps on the stock market, going to vegas, investing in a start-up that sells college kids to third world countries as cheap labor...whatever works.

galogvi

I received mine about a month ago. The build date on my '02 1.8T 5 speed tip is 9/01.

I made the appointment and got it in within 1 week. The only thing that was done was some ECU reprogramming. I never got the chance to ask exactly why this was done since I picked up the car after the service dept. closed, but I suspect that they modify the ABS Motor sensor settings.

If you don't mind, give me an update after your service.

blueguydotcom

I won't get in for service until my car's 15,000 mile mark. Unlike lucky people, I'm stuck with a VW dealership that insists I leave my car for the whole day and find my own way to and from work. They've also got a part for my broken console...but they've had that for 3 months because they refuse to make a set appointment and allow me to stop in at that time. Calling City VW's Service department customer friendly is like calling the [non-permissible content removed] hospitable.

bpi

So by the same logic, put as little down as possible on a car purchase, or on a house purchase? Or for that matter, buy everything on a loan. It sounds so easy to make more money on your money (or the banks') than the interest on the loans. The banks must be stupid to loan you the money at such "low" interest rates.

blueguydotcom

A home or car purchase is just that, a purchase - your money goes toward a product that you will own in the end. Funny concept, building equity. With a lease there is zero equity. You're not giving away money when you buy a house or a car and put a large down payment on it - you're saving money on the interest. When you lease a car, you're essentially throwing away money. If your car payment is only going to be lowered by $50-70 over three years by putting down $2500 you have now then you're losing more money at this moment than you will over the long haul. $2500/36 months is only $69.44.

On Carsdirect I popped in the info for Jetta and found with 2500 down they claimed I'd pay 252 a month. With zero down, the rate was 328. That's a difference of $76. You don't think someone with $2500 cash can make back that difference of 6.54 a month or $235 over the course of 3 years?

Even if perhaps you can't find a way to invest that cash to make up the difference, consider inflation (thus a $328 payment today isn't nearly as bad in 2005) and the likely prospect that you should be making more money in 3 years (one should hope), plus you had that extra $2500 for any unforseen disasters or requirements.

bpi

A lease is essentially a loan on a purchase with a "big payment" at the end. The payment is the car.

"You don't think someone with $2500 cash can make back that difference of 6.54 a month or $235 over the course of 3 years?"
I assume you took $6.54 and then multiplied by 12 (months). Now you had about $78 a year. Then you divided that by $2,500 and came up with a little more than 3%. Was that how you concluded that it was "easy"?

blueguydotcom

If one is looking to purchase a Jetta, then they should do so. Purchasing a lease is quite possibly the least logical way of going about the prospect.

As for the numbers on the Jetta lease...good grief.

2500 down + (252 a month X 36 months) = 11,572

0 down + (328 a month X 36 months) = 11,808

The immediate difference is $236 over 3 years but that's assuming the buyer didn't take his initial 2500 and invest it in some liquid account. I've got a basic liquid account that pays between 5-6% a year and by my estimates if you drop 2500 clams into that account, make 5.5% and withdraw 76 each month to make up the difference, you'll end up a measely $20 behind. But that's on a liquid account. A real investment should yield better results - stocks, CDs, etc, ROTH IRA (of course then you'd have to come up with the $76 from somewhere else each month).

If one is set on a lease and money factors remain the same regardless of down payment, the best option then is to lease with zero down, invest the money to make more money and count on inflation and a given higher income to make your payments make less of a dent each month. Also, if you're writing off the lease, it's always nice to have it cost more money and then you can spend your discretionary money on other write-offs...equipment, gas, insurance, etc.

bpi

I thought the concept you presented was this:
1. You own something that you purchase (be it a car or a house), so put more down to save on the interest.
2. You do not own something that you lease, so put as little down as possible.

If so, then it really doesn't matter what you're earning by keeping the $2,500, right? It doesn't matter if one's earning 5.5% like you, or 2% like me (and after taxes, more like 1.3%). You'll still put the $2,500 down on a purchase, but not on a lease. Correct?

The example on the Jetta lease at Carsdirect has an interest rate of 5.95%. If you can invest the money at 5.5%, of course you're only a little behind (but behind nonetheless).

1. Please tell me where I can open a liquid account that pays 5.5% a year. And I'm serious. I'll close my bank accounts tomorrow.
2. And is the 5.5% interest rate the after-tax rate?

Take the conclusion that it's only $20 behind (meaning you've exhausted the $2,500 and the interest it earns and need $20 from some place else to make payment #36), why would it matter financially whether it was a lease or a purchase? You're $20 behind in both cases.

P.S. Now you just put tax write-offs into the equation. We're talking about the average "Joe" here.

blueguydotcom

I've had the account through BAIS for about 6 years. Love it.

As for the rationale, I've stated it several times...you keep your 2500 now to invest it to make more for you later. If you hand it to VW at the beginning of the Jetta's lease it's gone forever...end of story. Why give VW $2500 right now? You can pay the same amount over time, ideally with an eye toward using that chunk saved chunk to make more cash.

And yes, I'd gladly put $2500 down on a purchase if it makes a sizable difference in payments. If the car manufacturer offers 0.9%, then it might be a good idea to jump on that rate and make money somewhere else.

bpi

Obviously I'm not a highroller or I don't have access to exclusive liquid accounts. Please tell me what BAIS is and how I may get in. I'll love it just like you do.

"As for the rationale, I've stated it several times...you keep your 2500 now to invest it to make more for you later. If you hand it to VW at the beginning of the Jetta's lease it's gone forever...end of story. Why give VW $2500 right now? You can pay the same amount over time, ideally with an eye toward using that chunk saved chunk to make more cash."

Good. Now that I've gotten your rationale down without any ambiguity, are you suggesting to cybrwmn that she(?) should not put the $2,500 down no matter what interest rate she's getting from her own liquid account and whether she could write off the lease? But she should (and again no matter what the interest rate she's getting) if it was a loan on a purchase instead of a lease?

blueguydotcom

Banc of America Investment Services. They're changing their policies come June 30, though, so I'm either going to have to start actively trading (something I'm loath to do) avoid yearly fees or find another liquid account

If VW is offering the Jetta lease at the same lease factor regardless of downpayment, then I can't see any sense in handing VW 2500 NOW. Give it to them over time and TRY to find somewhere else to put that money to use.

If it's a Jetta purchase, the decision to put money down hinges on the APR. Obviously if someone can swing 36 monthly payments at 0.9% for a purchase, why put a big chunk of money down? In the end, even a pathetic normal savings account will pay better than that and you have the money now.

For instance, VW still has the 1.8T at 3.9 for 60 months. If I can get near the buyout on my 01 Jetta, I can pick up a loaded 1.8T on a 60 month loan for only a little more than what I'm paying now on my lease. The big difference...after 24 more months of paying, I'll have a vehicle that's worth something, v. just handing VW my car and starting from scratch again.

bpi

Banc of America Investment Services?

Please point me to the right section. I went to their web site. Then to their Money Manager Account. The highest rate I saw was the Nations Cash Reserves at 1.34%. Don't tell me I need an investible amount of at least $1,000,000 to qualify for 5.5%. I'm $2,500 short.

P.S. You're flip-flopping.
You went from:
"Why are you putting so much money down on a lease? That money is gone forever..."
"It doesn't matter where you put the money, as long as it's not down on a lease."

To:
"consider inflation"
"extra $2500 for any unforseen disasters or requirements."
"I've got a basic liquid account that pays between 5-6% a year."

To:
Depending on the money factor or the APR.

blueguydotcom

I have no idea if the account still exists for new customers - it's part of BAIS but the exact name is beyond me as I don't have those statements around me...they arrive and I note the interest, then toss them...sorry. I signed up for it 6 years ago and it all ends june 30th for me due to a sudden requirement that I pay annually or make trades (something I don't have the time or inclination to do).

I don't intend to be mean but you're just not getting a simple perspective on leasing and it's HUGE difference from purchasing. I cannot possibly be any clearer.

With a lease IF the money factor is the SAME regardless of down payment, why put money down? You will pay it eventually, but for now you HAVE the money to SPEND or INVEST. There is no investment with a lease downpayment...it's GONE to VW forever. Hand VW money for a lease, you pay less now, you're out 2500 immediately and you will never recoup any cash. One option leaves the prospect of making money, the other offers only payouts with no possibility of a return.

If the APR on a purchase is far BELOW a decent interest rate, why put money down? You have the money now and can make interest on it that exceeds the amount you will pay on the loan. Simple enough. Similar concept, pay out but stand less of a chance of making money in the future.

If you don't get it, I'm sorry. I've been as clear as can be and for some reason you're just not grasping the concept.

bpi

What fee? A fix fee if you don't "trade"? With $997,500 in the account, I can afford to pay a fee and get 5.5% a year instead of the 2% I'm getting, unless the fee is $34,912.50 (ignoring taxes and other unique factors) or more.

"...for some reason you're just not grasping the concept (of leasing)."
ROTFLMAO.

Seriously, please keep me informed when you start looking for a comparable replacement for the BAIS account. You can call me names if you can help me get 5.5% (not six years ago but now) a year riskfree (not FDIC-type riskfree, but practically riskfree).

P.S. "There is no investment with a lease downpayment...it's GONE to VW forever."
Sure there is. With a $2,500 (or any amount for that matter) down payment, you're earning the exact same interest rate they're charging you on the lease. If the interest rate is 5.95%, you're getting 5.95% after taxes (assuming I'm the average Joe who can't write off the lease payments). That's around 9% pre-tax assuming a marginal income tax rate of 33%.

Same deal with a loan on a purchase. Putting an extra $1 down on a purchase is equivalent to not putting that $1 down and investing that $1 at an after-tax interest rate equal to the interest rate on the loan.

cybrwmn

Thanks for the lesson in finance :-/ This is a follow up to my original message: #5000 on 5-8-02.

Hate to say it, but the $2,500 should have been $1,500. So after reading all of the subsequent messages, have decided that 1,000 is sufficient. I can put the remaining 500 toward something else.

Original Info:

I'm in the market for a 2.0 Jetta GLS, 5 speed with leather and luxury packages. The Monsoon is possible, but I'd prefer to hear it first.
(Emissions are included in both invoice prices below)

I want to lease with 15K per year. Is $19,881 a good price on which to base a lease?

Both KBB and Edmunds put the invoice at $18,972 without the Monsoon and
$19,259 with the Monsoon. I don't know how updated these websites are though. I
had one fleet dealer say that invoice was $19,581 and that I could have it for $300 over. Today, the 9th, had another say $19,781. How does one KNOW what the dealer REALLY pays? I can't understand why there is a 600-800 spread from online services' "invoice" and what two dealers tell me "their cost" is.

Then there is the "holdback" issue which all dealers say "isn't a factor." Is it, or is it not?

Thanks.
CybrWmn

bpi

Are you familiar with leasing at all? Capitalized cost is only one of many factors that determine whether it's a good deal or not. Has the dealer quoted you the residual value and money factor? (You may have to try real hard to find out what the money factor is. It doesn't matter is usually the reply from the dealer. And don't let them tell you it doesn't matter whether they put the value of your trade, if you have one, on the contract either.) The process of buying a car without getting ripped off is hard enough for most people. Most people can't calculate a loan, much less a lease.

I think most here will agree the car you're about to lease is a hell of a car but with a subpar engine. But if that's what you want, then that's what you're going to buy/lease.

The reason the invoice the dealer showed you is higher than edmunds' is they included other "fees". Ad fees, port fees, etc. $600 seems too much. $300 over invoice without those fees would be good. I'm planning to buy a VW within 6 months. Hopefully someone else who made a purchase recently can jump in and help you. What region are you in?

P.S. Can you deduct the lease payments? Do you have access to riskfree liquid accounts paying 5-6%?

cybrwmn

Thanks for the lesson in finance :-/ This is a follow up to my original message: #5000 on 5-8-02.

Hate to say it, but the $2,500 should have been $1,500. So after reading all of the subsequent messages, have decided that 1,000 is sufficient. I can put the remaining 500 toward something else.

Original Info:

I'm in the market for a 2.0 Jetta GLS, 5 speed with leather and luxury packages. The Monsoon is possible, but I'd prefer to hear it first.
(Emissions are included in both invoice prices below)

I want to lease with 15K per year. Is $19,881 a good price on which to base a lease?

Both KBB and Edmunds put the invoice at $18,972 without the Monsoon and
$19,259 with the Monsoon. I don't know how updated these websites are though. I
had one fleet dealer say that invoice was $19,581 and that I could have it for $300 over. Today, the 9th, had another say $19,781. How does one KNOW what the dealer REALLY pays? I can't understand why there is a 600-800 spread from online services' "invoice" and what two dealers tell me "their cost" is.

Then there is the "holdback" issue which all dealers say "isn't a factor." Is it, or is it not?

Thanks.
CybrWmn

tulanekid24

I finally got my new Jetta GLS 1.8T 5speed last night. It has sport lux, leather and monsoon. The car is Galactic Blue with grey leather. It has 20 miles on it when I took delivery.

This car is awesome. The turbo is just intoxicating!! Fast fast. I have already drivin 200 miles. So far, so Good.

mseals

Man, that is the exact car that I am looking at getting with the exact options. Let me know how you like it. I love that color, that is the darker blue right? I think it looks so good with the windows tinted, I have a pic of it on my background at my job. The windows are tinted and it has the bigger tires. I believe they are the 17's that you get with the sport lux pkg. I am very interested to hear how you like your car and what you paid for it. That is my biggest concern.

justin

#1, why isn't the host deleting all offensive posts? This Steven person is allowed to "blast post" the same seriously questionable message over and over again, yet responses to it are deleted?

#2, I got my recall notice yesterday. I called the dealer and told them I won't be bringing the car in anytime soon. They said fine, but just look out for the ABS light. So, no biggie.

pat

The explanation is in this post: pat May 7, 2002 2:53pm. If you wish to discuss this further, you may email me.

Pat
Sedans Host

pat

I'm not trying to run any of you outta here, but I do want to be sure that those of you with questions are aware of the excellent information over on our Finance, Warranty & Insurance Board.

Car_man hosts a discussion in which he answers everyone's leasing questions, and there are lots of other informative conversations going on there.

:-)

Pat
Sedans Host

vocus

I got a recall notice in the mail yesterday as well, but I can just call my dealer and ask them to check for it while the car is STILL there.

justin

that stinks.

Kirstie_H

One major daily newspaper is looking for folks who drive 2002 or 2003 yellow or orange cars, and another major daily newspaper is looking for folks who successfully or unsuccessfully attempted to negotiate the purchase prices of their vehicles at the end of their lease terms. If you care to share your stories on either or both of these topics, please send an e-mail containing a short summary of your experience and your contact information to jfallon@edmunds.com no later than Tuesday, May 14.

Thanks much,

Jeannine Fallon
PR Director
Edmunds.com

Kirstie_H

A television reporter is interested in hearing from folks who have driven long distances to get good prices when buying new cars or trucks. If you have a story to tell, please drop a line including your contact info and city/state of residence to jfallon@edmunds.com.

Thanks,

Jeannine Fallon
PR Director
Edmunds.com

protege_fan

I thought you had them check your VIN already?

vocus

I did have them check my VIN, but there was no documentation about it. I wanna make it official to make sure my car is safe and I want it written on the paperwork I get back.

protege_fan

Good idea! Any ETA on your car?

vocus

Nope, not yet. They said, when I talked to them about 2 hours ago, that the part they are waiting for (this "rubber treatment") has not come in yet. From what they have said, it's some kind of solution and it's pretty hard to get as well. I just hope it's worth all this trouble. I mean one more noise from this car when I get it back, and I am not responsible for what I will do.

Since my car has been in the shop for 3 weeks now, I was thinking of calling VWoA and asking them if they would consider paying part of my payment or something like that. What do you all think about this?

protege_fan

I say "good luck" to getting them to do that. I do think that they should try to make you happy, but from your comments about this so far, you do sound happy. They have given you a loaner car, so I can see them saying that they have met their obligations.

If they had some sort of time guarantee, then I think you'd be entitled to something, but I doubt that's the case.

BTW, what do you think about the Beetle?

justin

VWoA is a seperate entity than VW/Audi Credit. They won't pay your payment.

vocus

I like the Beetle, but the interior seems alot cheaper than my Jetta. I have leatherette trim, but not true leather in it. The power sucks, because it's a 2.0, and it gets the same fuel economy as my car does. And the hatch area doesn't hold alot. A 2-week grocery trip to the store will more than fill the cargo area. I like the car otherwise though.

I think you are right about the payment thing though. I am very happy with their actions, so I might as well just leave it at that. Plus, I don't wanna get the dealership in trouble either, because they have been excellent to me.

vocus

That's what I thought as well. I am not going to try to do it then.

justin

good idea. in the long run, it would be more stress than it is worth. you have more valuable things to do with your time

sizzla123

Hi all,

When looking at VW's website, Driver's Option payments are lower than both leasing and buying. I don't get it. What's the difference between a regular lease and Driver's Option. In both cases, you make payments as you go along, and at the end of the lease you have the option to keep the car and pay the balance or return the car without making any further payments. I just don't understand why the Driver's Option's payment are less than a traditional lease, can someone explain why it's so? any other opinions/thoughts on the Driver's Option would be appreciated.

Thanks

vocus

With the DA, you have your name on the car. Whereas on the lease, you have it in the bank's name and have to carry maximum insurance coverage. You gain equity because of having the car in your name, where in the lease you do not. Also, you can trade the car anytime without worrying and stuff like that.

bpi

So you're saying with the Driver's Option:
1. The car's in my name.
2. Because of that, I don't have to have maximum insurance coverage.
3. I build equity as well.
4. I can trade the car in anytime I want.

And according the sizzla123, the payments are lower.

Please tell me why I should not choose the Driver's Option over the "regular" lease.

sizzla123

I've been told that unlike a traditional lease, with Driver's Option you can't just return the car at the end of the lease without any cost. You have to pay some sort of big payment when you return the car. I'm not sure what thats all about, thats why I'm asking on this board.

protege_fan

Is there some sort of limitation on mileage/year? What about wear and tear?

sizzla123

I dont think there is any mileage restrictions because the car is yours, in your name. We need more info on this program. Please someone respond.

blackjetta18t1

there is a mileage restriction like a traditional lease, at least thats what the website says.

sizzla123

I think the main question revolves on what happens when the lease (drivers option) is up. Can you return the car to the dealership, just like a traditional lease, or do you need to make some sort of large balloon payment at the end when returning the car?

bpi

It says "No turn-in fee" (then maybe they call the fee something else).
Either keep the car and pay the "balance", keep the car and finance the balance, or return the car.

No acquisition fee
No security deposit

sizzla123

This is what I read about the Driver's Option from another board.

"Driver's Option is really nothing more than a "Ballon Payment" loan. You make really small payments and then get a big one at the end. The exception is that you can return it to the dealer at the end, but they will only give you "Actual Cash Value" (no guarantee of value) and you have to cover the rest. And trust me, you will owe a lot. Which means a big out-of-pocket expense at the end. This is the same as GM's Smart Lease."

According to this, then you cant just return the car and "thats it". You have to make some sort of balloon payment. This is confusing!

xjoel

I am planning on buying a Jetta between October and December. I know that that 2003's will be out in September but there still should be some 2002's left. How much should I pay for a GLS 1.8T w/Sport Luxury, Cold Weather, and 5-Speed Tiptronic? How much of a discount could I expect for a 02 when the 03's are out? Oh yeah, Reflex Silver or Galactic Blue

justin

I was just reading thru Edmunds long term test of the Passat with the 150hp turbo engine. It is just at 50k miles, and outside of a little clutch-wear, the engine is still going strong. And they apparently drive it pretty hard.

Good to know...:)

vocus

You are completely right in your assessment of the Driver's Option in post #5042. There is a mileage limit though, 15K or 12K, whatever you pick. At the end of your lease, you turn the car in, refinance the balloon payment, or make the balloon payment. You do not have to carry max. insurance coverage either, and can trade the car anything without worrying like you do with a lease.

vocus

I was just wondering if there is a huge performance difference between the TDI automatic and the 1.8T automatic. Just curious. Thanks to anyone who can reply.