First time lease of 2015 or 2016 Q5

q5chicagoq5chicago Member Posts: 23
edited January 2016 in Audi
I am in chicago area and not familiar with bargains involved in leasing. Since there is sales tax benefit in IL for leasing I am planning to lease this time instead of purchasing. I am shopping for
2016 Q5 Premium plus 2.0 AWD with Tech package MSRP 47,950 (with Tech credit of 600$)
2015 Q5 Premium plus 2.0 AWD with Tech package and other accessories MSRP $49,300.
I have excellent credit rating and 36/10k miles is good for me.. I know how to get purchase price , for leasing what would be the best offer for above configuration.
If I trade-in would it be helpful for leasing ? Otherwise I would just sell to private party.
Any help provided is much appreciated. Thanks.

Comments

  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    I am in chicago area and not familiar with bargains involved in leasing. Since there is sales tax benefit in IL for leasing I am planning to lease this time instead of purchasing. I am shopping for
    2016 Q5 Premium plus 2.0 AWD with Tech package MSRP 47,950 (with Tech credit of 600$)
    2015 Q5 Premium plus 2.0 AWD with Tech package and other accessories MSRP $49,300.
    I have excellent credit rating and 36/10k miles is good for me.. I know how to get purchase price , for leasing what would be the best offer for above configuration.
    If I trade-in would it be helpful for leasing ? Otherwise I would just sell to private party.
    Any help provided is much appreciated. Thanks.

    Leasing a vehicle is a lot like purchasing. Negotiate the lowest selling price you can, then make sure you aren't paying for unnecessary fees or accessories.

    Trade-ins work the same way... Selling private party will likely net you more money than trading in.

    .00112 MF and 57% residual for 36mo, 10K/yr

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  • q5chicagoq5chicago Member Posts: 23
    Hi,
    Thanks for quick response. What are different unwanted fees that a dealer can add ?
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    Hi,
    Thanks for quick response. What are different unwanted fees that a dealer can add ?

    Dealer or doc fees.
    Extended warranty
    Accessories that can't be residualized.

    Anything that they try to sell you in the finance office.

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  • q5chicagoq5chicago Member Posts: 23
    Thanks again. Does dealer have their own leasing company or leasing a new Q5 would be always through manufacturer, in this case Audi Financial Services ? Residual Value and MF will be standard across all the dealers for same q5 with options or can vary and negotiable ?
  • q5chicagoq5chicago Member Posts: 23
    Also is it better to lease or buy Q5 based on current market conditions, if both options are feasible for me ?
  • MichaellMichaell Moderator Posts: 218,081
    q5chicago said:

    Thanks again. Does dealer have their own leasing company or leasing a new Q5 would be always through manufacturer, in this case Audi Financial Services ? Residual Value and MF will be standard across all the dealers for same q5 with options or can vary and negotiable ?

    q5chicago said:

    Also is it better to lease or buy Q5 based on current market conditions, if both options are feasible for me ?

    Most dealers use AFS, but I'm sure alternatives exist.

    Residual and base MF are set by AFS; dealer cannot alter the residual but can mark up the MF for extra profit.

    Lease vs. buy - I suppose it depends on how long you plan to keep the car.

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  • q5chicagoq5chicago Member Posts: 23
    Hi, Nearby dealers doesn't have any Q5 PP + Tech with standard wheels. So i have to buy with either upgraded 19 inch wheels (800 more) or some accessories like all weather mats, cargo net (around 700$) more. Dealers are mentioning it's only few extra bucks in residual value while leasing. Is it ok to go with one of those options or those options won't have value in trade at end of lease ? Also, for 48895MSRP at 58% Residual percent, I am getting residual value = $28417. Is this would be my buy out price at end of lease ? How would dealer set buy out price when lease ends ?
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    Hi, Nearby dealers doesn't have any Q5 PP + Tech with standard wheels. So i have to buy with either upgraded 19 inch wheels (800 more) or some accessories like all weather mats, cargo net (around 700$) more. Dealers are mentioning it's only few extra bucks in residual value while leasing. Is it ok to go with one of those options or those options won't have value in trade at end of lease ? Also, for 48895MSRP at 58% Residual percent, I am getting residual value = $28417. Is this would be my buy out price at end of lease ? How would dealer set buy out price when lease ends ?

    Yes, your buyout is the residual, plus possibly a fee from AFS. You'd have to look at a lease contract. Some banks have fees of $150-$500 added on. The dealer won't set the buyout price.

    If the extras are on the factory sticker, they will be part of the MSRP and will be residualized. $800 of options would add about $10-$12/mo. to your payment, assuming the selling price was $800 more. Accessories that aren't on the government sticker add a lot more to the payment, as they usually aren't residualized. That's the key: Are they included in the MSRP, or not? Of course, mats and cargo nets can be removed.... or, thrown in for free, if they are added at the dealership. I certainly wouldn't pay for anything that was added at the dealership, and not on the sticker.

    My recommendation is to avoid the 19" wheels. They look great, but if you have to replace the tires, the cost is staggering. Plus, they may come with summer performance tires. If you are in Chicago, and have to deal with winter weather, then 19" is not the way to go.

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  • q5chicagoq5chicago Member Posts: 23
    Thanks for the information, this helps. All the accessories are reflecting on MSRP. Dealer has mentioned that lender acquistion fee - of 795$. If I decided to buy at end of lease, what should I look in lease contract ?
  • kyfdxkyfdx Moderator Posts: 216,032
    edited January 2016
    q5chicago said:

    Thanks for the information, this helps. All the accessories are reflecting on MSRP. Dealer has mentioned that lender acquistion fee - of 795$. If I decided to buy at end of lease, what should I look in lease contract ?

    Somewhere down in the body of the fine print, there will be a disposition fee, that must be paid, if you turn the car back in, at the end of the lease. The other fee is usually called a "purchase option fee", which would be added to the residual, if you decided to purchase the car. I'm not sure if AFS has that fee, or not. Just ask the finance guy.

    If the accesssories are on the Monroney sticker, and not some additional sticker the dealer added next to it, then the cost is sort of minimal.. As mentioned before, $800 on the MSRP will add $10-$12/mo. to the payment. It's hard to find a car on the lot with the exact equipment you want.

    The acquisition fee is standard on every lease.

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  • q5chicagoq5chicago Member Posts: 23
    Hello, what are Feb lease deals for 7500/36, 10k/36 and 10k/39 ? Thanks in advance.
  • MichaellMichaell Moderator Posts: 218,081
    q5chicago said:

    Hello, what are Feb lease deals for 7500/36, 10k/36 and 10k/39 ? Thanks in advance.

    No change in the numbers for February.

    .00112 and 57% for 36/10. Add 1% for 7500 miles.

    .00132 and 55% for 39/10

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  • q5chicagoq5chicago Member Posts: 23
    I couldn't make my mind on whether I want to buy or lease Q5. Buy - 1.99% for 60 months financing is approved, but pay taxes on full price. Lease - less taxes but greater MF (7500/36). So if I buy and sell Q5 years between 3-4 years, do I loose more money than leasing ? I getting some aggressive quotes on 2016 Q5 (not sure 2017 q5 market date)
  • q5chicagoq5chicago Member Posts: 23
    To add, My total lease cost coming around 19650 (includes Lease Acq fee) for 7500/36 lease
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    To add, My total lease cost coming around 19650 (includes Lease Acq fee) for 7500/36 lease

    If you are selling in 36-42 months, then lease.

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  • q5chicagoq5chicago Member Posts: 23
    Thanks Kyfdx. Is AFS has option of one time payment ? Is it wise to do one time payment ? (I'll take GAP insurance if that's the case ). Are there any discounts for 1 time payment ?
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    Thanks Kyfdx. Is AFS has option of one time payment ? Is it wise to do one time payment ? (I'll take GAP insurance if that's the case ). Are there any discounts for 1 time payment ?

    On a 36 month lease, the MF discount for single-payment is .00100

    That's substantial. If you have the cash available, that's not a bad way to go.

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  • hofbahnhofbahn Member Posts: 2
    Looking for a critique of this purchase price of a 2016 Q5 PP. The MSRP is $45,870 with invoice being $42726. Dealer will sell it for $500 below invoice, but with regional marketing fee added on of $420 and a ridiculous Doc fee of $489, the deal ends up $400 over invoice.
  • kyfdxkyfdx Moderator Posts: 216,032
    hofbahn said:

    Looking for a critique of this purchase price of a 2016 Q5 PP. The MSRP is $45,870 with invoice being $42726. Dealer will sell it for $500 below invoice, but with regional marketing fee added on of $420 and a ridiculous Doc fee of $489, the deal ends up $400 over invoice.

    Sorry... I don't have any input on selling price.

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  • q5chicagoq5chicago Member Posts: 23
    What is Audi care, is it prepaid maintenance plan ? If I get Audi Care 850$ on lease, do I still need to pay full price of 850$ ?
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    What is Audi care, is it prepaid maintenance plan ? If I get Audi Care 850$ on lease, do I still need to pay full price of 850$ ?

    Yes, AudiCare is prepaid maintenance and the list price is $849. Doubtful you'll get a discount, but by purchasing it at lease inception (and, you can roll it into the payment), Audi increases the residual by 1%. On a $50K MSRP unit, that saves $500, making your net cost just $349 for three years of maintenance. That's cheap.

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  • q5chicagoq5chicago Member Posts: 23
    One more question, while leasing if I have a fender bender (like replacing bumper etc) and get it repaired/replaced , do I still need to pay any penalties at the end of lease ? How generous AFS is on accidental repairs during lease ? Thanks in advance
  • MichaellMichaell Moderator Posts: 218,081
    q5chicago said:

    One more question, while leasing if I have a fender bender (like replacing bumper etc) and get it repaired/replaced , do I still need to pay any penalties at the end of lease ? How generous AFS is on accidental repairs during lease ? Thanks in advance

    As long as the repairs are done by a competent shop, there shouldn't be any penalties at the end of the lease. That, actually, is one of the little known benefits of leasing - you don't have to worry about diminished value, as the residual is part of the contract.

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  • q5chicagoq5chicago Member Posts: 23
    Bumping from MSRP 48195 to 48995 MSRP increase monthly lease payment about 8$ for 3 years, is that sound correct ?
  • MichaellMichaell Moderator Posts: 218,081
    q5chicago said:

    Bumping from MSRP 48195 to 48995 MSRP increase monthly lease payment about 8$ for 3 years, is that sound correct ?

    Everything else being equal, an $800 increase in the MSRP will result in a payment that is about $12-15/mo higher.

    Take the $800 increase in price, multiply it by the residual, then divide by the lease term. You've asked about both 36 and 39 month terms with different miles per year, so the residual varies.

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  • q5chicagoq5chicago Member Posts: 23
    yes keeping the same for everything else. It's for 36/10k with 58% residual (includes 1% increase audi care)
  • MichaellMichaell Moderator Posts: 218,081
    q5chicago said:

    yes keeping the same for everything else. It's for 36/10k with 58% residual (includes 1% increase audi care)

    ($800 x .58) / 36 = $12.89/mo

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  • q5chicagoq5chicago Member Posts: 23
    What's considered normal wear and tear when leasing ? Can dealer provide that information in lease documentation ? How can I make sure there is no misunderstanding on dings and dents for what's being charged . Thx in advance
  • q5chicagoq5chicago Member Posts: 23
    is there any fee again from AFS during lease end apart from acquisition fee ? Also, is there any penalty for early lease payments ?
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    What's considered normal wear and tear when leasing ? Can dealer provide that information in lease documentation ? How can I make sure there is no misunderstanding on dings and dents for what's being charged . Thx in advance

    Yes.. they should have a sheet that lays it out, in detail.

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  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    is there any fee again from AFS during lease end apart from acquisition fee ? Also, is there any penalty for early lease payments ?

    Almost all banks have a disposition fee at lease end, and I doubt AFS is any different. Usually in the $300-$400 range.

    You can make your lease payments early, but that won't save you any money, or let you turn in your vehicle early

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  • q5chicagoq5chicago Member Posts: 23
    Here is a dealer quoted:

    2016 Q5 PP + Tech +19 inch with AudiCare
    MSRP 48,995
    CAP cost 41645
    Term 36/10K
     Purchase Option 28,417.10
    Sales Tax : 8.25% = $1804.84
    Dealer Doc fee 169$
    Title+License = 221$
    Cap Reduction (Cash) 3,700.00
    Rebate as Cap Reduction 1,000.00
    Monthly Payment 500.87
    Disposition Fee 350.00

    It seems I have to put down 3700$ to get down to 500$ monthly payment. Does monthly payment looks correct for listed CAP cost and other list fees ? Can you please help ?
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    Here is a dealer quoted:

    2016 Q5 PP + Tech +19 inch with AudiCare
    MSRP 48,995
    CAP cost 41645
    Term 36/10K
     Purchase Option 28,417.10
    Sales Tax : 8.25% = $1804.84
    Dealer Doc fee 169$
    Title+License = 221$
    Cap Reduction (Cash) 3,700.00
    Rebate as Cap Reduction 1,000.00
    Monthly Payment 500.87
    Disposition Fee 350.00

    It seems I have to put down 3700$ to get down to 500$ monthly payment. Does monthly payment looks correct for listed CAP cost and other list fees ? Can you please help ?

    If I add the sales tax on to your CAP cost, then I get a payment of $498/mo, so pretty close

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  • q5chicagoq5chicago Member Posts: 23
    Thanks. Here my understanding and I am using to calculate. I am getting 498 without any down payment. Please help me to understand the calculation and helps if you can give the calculation steps. Appreciate your help.


    1. Sticker Price of the car + options = 48995
    2. Times the residual value percentage X 0.58% equals the residual value = $28417
    3. Invoice price of car minus incentives (net capitalized cost) $41645
    4. Minus the residual (from line 2) equals the depreciation over 36 months = $13228
    5. Depreciation (line 4) divided by term in months ÷ 36 equals the monthly depreciation payment = $367
    6. Net capitalized cost (From line 4) + Acq fee + Audi care + Dealer fee= $41645 +795+849+169 = 43458
    7. Plus the residual (From line 2)+ $28417 equals = $71875
    8. Times the money factor X .00112 ( percent) equals money factor (interest) payment portion = $80.5
    9. Monthly depreciation payment (from line 5 $367 )+ money factor payment portion (from line 9 $80.5)
    10. Equals bottom-line monthly lease payment = $447.5
    11.Dealer calculated tax for lease period= $1804.84
    12. Tax divided by 36 = 50.13 $
    13. bottom-line monthly lease payment with tax= $447.5 + 50 .13 = 497.5
  • kyfdxkyfdx Moderator Posts: 216,032
    q5chicago said:

    Thanks. Here my understanding and I am using to calculate. I am getting 498 without any down payment. Please help me to understand the calculation and helps if you can give the calculation steps. Appreciate your help.


    1. Sticker Price of the car + options = 48995
    2. Times the residual value percentage X 0.58% equals the residual value = $28417
    3. Invoice price of car minus incentives (net capitalized cost) $41645
    4. Minus the residual (from line 2) equals the depreciation over 36 months = $13228
    5. Depreciation (line 4) divided by term in months ÷ 36 equals the monthly depreciation payment = $367
    6. Net capitalized cost (From line 4) + Acq fee + Audi care + Dealer fee= $41645 +795+849+169 = 43458
    7. Plus the residual (From line 2)+ $28417 equals = $71875
    8. Times the money factor X .00112 ( percent) equals money factor (interest) payment portion = $80.5
    9. Monthly depreciation payment (from line 5 $367 )+ money factor payment portion (from line 9 $80.5)
    10. Equals bottom-line monthly lease payment = $447.5
    11.Dealer calculated tax for lease period= $1804.84
    12. Tax divided by 36 = 50.13 $
    13. bottom-line monthly lease payment with tax= $447.5 + 50 .13 = 497.5

    Line 3: Do you mean selling price? Invoice price is what the dealer pays Audi for the car.

    Line 11: That tax is collected upfront. Rather than dividing by 36, just add it on to Line 6, and proceed from there. (It will result in a slight difference.. a couple dollars more per month).

    Your calculations are correct, other than the way the tax is accounted for.

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  • q5chicagoq5chicago Member Posts: 23
    Yes, Line 3 is selling price. :( , even if I corrected step 11 I am not getting to 500$ monthly payment with 3700 down payment. Not sure, where i am going wrong. Can you help me for 1 more calculation. If I put 1000$ down payment and have 1000 manufacturer rebate, how much my monthly payment would be for above listed numbers ? Thx in advance
  • kyfdxkyfdx Moderator Posts: 216,032
    edited February 2016
    q5chicago said:

    Yes, Line 3 is selling price. :( , even if I corrected step 11 I am not getting to 500$ monthly payment with 3700 down payment. Not sure, where i am going wrong. Can you help me for 1 more calculation. If I put 1000$ down payment and have 1000 manufacturer rebate, how much my monthly payment would be for above listed numbers ? Thx in advance

    Maybe that net CAP already accounts for your downpayment and rebate? Doesn't seem likely that you would get 15% off MSRP, otherwise

    I only did the calculations using the info you provided on lines 1-13. Nothing about any further cap reductions is included in that information.

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  • babbs3052babbs3052 Member Posts: 3
    edited March 2016
    I appreciate this site and it's helped me with some of my questions. But I have another. I signed the lease paperwork on Saturday for a 2016 Q5 Premium Plus (MSRP: 49,325), but I don't take delivery on the car until it's delivered to the dealership in a couple weeks. Unfortunately, I did my homework after leasing, and after seeing this website, I think I got screwed a bit on the back end of the deal. 57% residual (I bought Audi Care), MF .00208 for 36/12 (I have a 837 credit score). So I thought I'd save some money by paying the one time payment discussed on the web site and save myself .001 on the lease. I called VW Credit and the lady said I could pay the total monthly amount agreed to in the lease and have a credit they'd draw from (????? who would do that????). Anyway, is this .001 one time pay not an option with all leasing companies?
  • kyfdxkyfdx Moderator Posts: 216,032
    babbs3052 said:

    I appreciate this site and it's helped me with some of my questions. But I have another. I signed the lease paperwork on Saturday for a 2016 Q5 Premium Plus (MSRP: 49,325), but I don't take delivery on the car until it's delivered to the dealership in a couple weeks. Unfortunately, I did my homework after leasing, and after seeing this website, I think I got screwed a bit on the back end of the deal. 57% residual (I bought Audi Care), MF .00208 for 36/12 (I have a 837 credit score). So I thought I'd save some money by paying the one time payment discussed on the web site and save myself .001 on the lease. I called VW Credit and the lady said I could pay the total monthly amount agreed to in the lease and have a credit they'd draw from (????? who would do that????). Anyway, is this .001 one time pay not an option with all leasing companies?

    For the 2.0T model, the base MF is .00112, so that's a big markup.

    You can get a .00100 reduction with AFS, for a single-pay lease, but you can't negotiate that with AFS. You have to go through the dealer. AFS won't give out any MF information, because they might let it slip that the dealer has marked up the rate on you.

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  • babbs3052babbs3052 Member Posts: 3
    edited March 2016
    Thanks for the information! I contacted the dealership about the huge markup on the money factor. After much discussion, they redid the lease paperwork and gave me a money factor of .00112. Saved me almost $70 a month on my payment.
  • MichaellMichaell Moderator Posts: 218,081
    babbs3052 said:

    Thanks for the information! I contacted the dealership about the huge markup on the money factor. After much discussion, they redid the lease paperwork and gave me a money factor of .00112. Saved me almost $70 a month on my payment.

    That's over $2500 over the life of the lease. Great job!

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