New to leasing - 2017 A4, FWD, 36 months, 12K lease - need advise

nr14

Hi,

I am a newbie to leasing. I want to lease a 2017 Audi A4 with the following specs:

- 2017 Audi A4 2.0T Premium Sedan

Included packages:
- Audi MMI Navigation Plus
- Convenience Package
- 18" Wheel Package

Included options:
- CREDIT: Front & Rear Parking Sensors
- Heated Front Seats
- Parking System Plus
- USB Cables

I got the following quotes from the dealer. These include all fees, taxes etc. We have not negotiated at all so far.

36 month Lease with 4k down @ 12k mi/yr: $435.66/month
36 month Lease with 4k down @ 10k mi/yr: $421.82/month

My sales tax rate is 8.5% (included in the price above).

I am not sure what questions I should be asking as I negotiate this and whether this is a good deal. Any help or advise is welcome.

Thanks!

kyfdx

@nr14 Start with the MSRP and selling price.
Then, ask for the adjusted CAP cost.
Then and for the money factor and residual.

You can't negotiate anything, if you don't know why the numbers are what they are.

Why put $4000 upfront?

nr14

Thank you. Getting those details now.

nr14

@kyfdx - I wasn't sure how much to put upfront. I just asked for a quote with that so I could compare deals from multiple dealers. How much upfront should I plan to put in?

MSRP: $45,645
Sale Price: $41,080

I am awaiting the rest of the numbers.

Thank you again for your help!

Michaell

nr14 said:

@kyfdx - I wasn't sure how much to put upfront. I just asked for a quote with that so I could compare deals from multiple dealers. How much upfront should I plan to put in?

MSRP: $45,645
Sale Price: $41,080

I am awaiting the rest of the numbers.

Thank you again for your help!

You want to make the first payment and pay any non-taxable fees up front.

To level the playing field, tell the dealers you'll do $1000 out of pocket.

You want to negotiate the selling price - 6% off sticker is pretty good for Audi.

Clint

Things you need to ask.

First, negotiate the selling price, same as you would if you were buying. To the dealer a lease is a sale. Do not simply accept the dealer's price. Seems you did this.

Second, check available interest rates. Multiply the money factor by 2,400 to find the interest rate the dealer is using.

Third, ask the dealer to verify the accuracy of the residual value to the manufacturer's numbers.

Finally, ask the dealer for the details behind the capitalized cost. This will be the selling price plus any fees reduced by any deposit or trade value. The only fees which you are required to pay would be sales tax, registration, and the acquisition fee. Any other fee, like document fee or dealer fee, is simply part of the selling price and, hence, fully negotiable.

I have been leasing for more than a decade, this summer I leased a BMW. I have never paid more than first month's lease payment up front.

One other thing, ask the dealer if the lease includes GAP coverage. I think Audi leases include GAP but ask to be sure.

nr14

@Michaell , @Clint - Thank you. This is very helpful.

@Clint - What is GAP insurance? If it is not included in the lease, can I ask that they include it? Do dealers negotiate on that?

I tried reading up some articles online about leasing, but it got confusing quickly. Your comments here are much more specific and easy to understand. Thank you!

nr14

@Michaell, This is 10% off MSRP. Good deal then?

Michaell

nr14 said:

@Michaell, This is 10% off MSRP. Good deal then?

10% off sticker is a good price for an Audi; just make sure they aren't marking up the MF on you to take some of that discount back.

nr14

@Michaell - Thanks. What MF and Residual % should I be looking at?

I have another quote with a selling price of 39,096 and residual of 23,193.50. I have asked for the MF and MSRP on it too, but the monthly is at 496 with a drive off amount of 4000. Certainly not as good a deal as the first one, but not sure what is driving up the price.

Michaell

nr14 said:

@Michaell - Thanks. What MF and Residual % should I be looking at?

I have another quote with a selling price of 39,096 and residual of 23,193.50. I have asked for the MF and MSRP on it too, but the monthly is at 496 with a drive off amount of 4000. Certainly not as good a deal as the first one, but not sure what is driving up the price.

With all these posts, we're still missing one critical piece of info.

FWD or Quattro?

That will determine the MF and residual.

nr14

@Michaell - Thanks for your help so far!


Here is the deal they've offered me:

In San Francisco Bay Area, I have excellent credit (800+).


- 2017 Audi A4 2.0T Premium Sedan FWD

Included packages:
- Audi MMI Navigation Plus
- Convenience Package
- 18" Wheel Package

Included options:
- CREDIT: Front & Rear Parking Sensors
- Heated Front Seats
- Parking System Plus
- USB Cables

MSRP: $45,645
Sale Price: $41,080
Drive off amount: $4000
Adjusted Cap Cost: $39,043.86
Money Factor: 0.00061
Residual: $26,017.65

Tax rate: 8.5%

Monthly lease: $435.66 Per Month (including tax)


I looked at the lease calculator at http://www.bankrate.com/calculators/auto/auto-lease-calculator.aspx and the numbers don't seem to add up. According to that lease payment should be about 375.

What am I missing here?

Also, does the Residual seem right? Based on your earlier input, I am assuming MF is too high and I should be able to ask for 0.00015.

Thank you again!

nr14

Please disregard my previous post. Here is the deal I am being offered:


In San Francisco Bay Area, I have excellent credit (800+).


- 2017 Audi A4 2.0T Premium Sedan FWD

Included packages:
- Audi MMI Navigation Plus
- Convenience Package
- 18" Wheel Package

Included options:
- CREDIT: Front & Rear Parking Sensors
- Heated Front Seats
- Parking System Plus
- USB Cables


MSRP 45645
Selling price 41080
Drive off amount 4000
Down payment 2036.14
Dealer Fees etc. 1963.86
Adjusted Cap Cost 39043.86
MF 0.00061
Residual 26017.65
Tax Rate 8.50%

Monthly Lease Payment 435.66


Seems to me that I should negotiate on the dealer fee and MF. Any suggested numbers I should target? MF at 0.00015?

Also, does the residual seem right?

Thanks!

Michaell

nr14 said:

Please disregard my previous post. Here is the deal I am being offered:


In San Francisco Bay Area, I have excellent credit (800+).


- 2017 Audi A4 2.0T Premium Sedan FWD

Included packages:
- Audi MMI Navigation Plus
- Convenience Package
- 18" Wheel Package

Included options:
- CREDIT: Front & Rear Parking Sensors
- Heated Front Seats
- Parking System Plus
- USB Cables


MSRP 45645
Selling price 41080
Drive off amount 4000
Down payment 2036.14
Dealer Fees etc. 1963.86
Adjusted Cap Cost 39043.86
MF 0.00061
Residual 26017.65
Tax Rate 8.50%

Monthly Lease Payment 435.66


Seems to me that I should negotiate on the dealer fee and MF. Any suggested numbers I should target? MF at 0.00015?

Also, does the residual seem right?

Thanks!

You could work on the MF; but you may have to give up some of the discount from sticker to do so.

I get the same payment, to the penny, with those numbers.

Dealer cannot modify the residual value; it's set by the bank.

Ask for a breakdown of the $2K of dealer fees, etc.

nr14

Thanks @Michaell

I understand that when getting a lease, I can also get the following two:

1. Pre-pay some amount so that when I return the car, extra wear and tear / damage for up to 5K (or some other amount) is covered. Are such deals worth it? I have not asked the dealer about it, but I usually find that they add such options when doing the final paperwork. If so, what's such a deal like for Audi A4? Someone told me this costs 1500 for coverage up to 5000.

2. Pre-pay for service for next 3 years. Again, is it recommended? If so, what's a good price?

Thanks!

Michaell

nr14 said:

Thanks @Michaell

I understand that when getting a lease, I can also get the following two:

1. Pre-pay some amount so that when I return the car, extra wear and tear / damage for up to 5K (or some other amount) is covered. Are such deals worth it? I have not asked the dealer about it, but I usually find that they add such options when doing the final paperwork. If so, what's such a deal like for Audi A4? Someone told me this costs 1500 for coverage up to 5000.

2. Pre-pay for service for next 3 years. Again, is it recommended? If so, what's a good price?

Thanks!

1. only a good deal for the dealer; if you take good care of your car, you shouldn't have any end of lease charges
2. AudiCare is $849, but adds 1% to the residual, Usually a good deal.

nr14

@Michaell - Thank you again.

One more question. All this while the dealer was quoting for an AWD while we had been discussing a FWD.

Can you please share the MF and residual for 2017 A4 Quattro in SF Bay area with excellent credit score?

I really appreciate all your help. Thank you so much!

Michaell

nr14 said:

@Michaell - Thank you again.

One more question. All this while the dealer was quoting for an AWD while we had been discussing a FWD.

Can you please share the MF and residual for 2017 A4 Quattro in SF Bay area with excellent credit score?

I really appreciate all your help. Thank you so much!

.00061 is the correct MF for the A4 Quattro. 57% residual for Prem / Prem+ for 36/12

nr14

@Michaell - Thank you!

nr14

@Michaell - I got the details with min drive off. Here is what I am getting now. I think I should try and bring down the acquisition and doc fee. Do you think it is high? Can I negotiate on it? Or, is this a good deal and I should take it?

With Aud Care
MSRP = 45,645
Selling Price: 41,080
Gross Cap Cost = $41,929 ($41,080 + Audi Care $895)
Adjusted Residual = $26,474.10
Drive Off Fees:
1st Payment = $511.07
Acqusitioin and doc fee = $875.00
Registration = $405.75
Tax on acquisition and doc fee = $74.38
Total Drive Off = $1,866.20

Monthly lease: 511.07

Michaell

nr14 said:

@Michaell - I got the details with min drive off. Here is what I am getting now. I think I should try and bring down the acquisition and doc fee. Do you think it is high? Can I negotiate on it? Or, is this a good deal and I should take it?

With Aud Care
MSRP = 45,645
Selling Price: 41,080
Gross Cap Cost = $41,929 ($41,080 + Audi Care $895)
Adjusted Residual = $26,474.10
Drive Off Fees:
1st Payment = $511.07
Acqusitioin and doc fee = $875.00
Registration = $405.75
Tax on acquisition and doc fee = $74.38
Total Drive Off = $1,866.20

Monthly lease: 511.07

The acquisition and doc fees are fixed - the former by the bank and the latter by the state of California.

Looks like a solid deal, if you're comfortable with the selling price.

nr14

@Michaell - Thank you for your time and insights. I went ahead and got the car over the weekend.

Michaell

nr14 said:

@Michaell - Thank you for your time and insights. I went ahead and got the car over the weekend.

Excellent, and congrats! Care to share your deal details with us?