Money Factor and Residual Value Questions

dbs6000

Generally speaking, as a Model Year progresses, do Residual Values drop, and do manufacturers (Volkswagen, in particular) reduce Money Factors to compensate for same? If so, do lease rates generally remain the same, or do they go up (or down) throughout the Model Year?

Also, if a vehicle is coming off lease, is there any way to negotiate the Residual Value? Do I speak with Volkswagen Credit regarding same or the dealer?

And upon a new deal, is there any way to negotiate a lesser lease end buy-out figure that'd be separate from the Residual Value, or will the Residual Value alone control?

The reason I ask is that if you're able to negotiate a good sales price, why shouldn't you also be able to take advantage of same at lease end, instead of always having to pay the MSRP * the Residual Percentage, which can't otherwise be negotiated (as same is based off of the MSRP).

Thank you very much!

kyfdx

dbs6000 said:

Generally speaking, as a Model Year progresses, do Residual Values drop, and do manufacturers (Volkswagen, in particular) reduce Money Factors to compensate for same? If so, do lease rates generally remain the same, or do they go up (or down) throughout the Model Year?

Generally, yes... residuals drop, and money factors often drop to compensate. Or, incentives are increased.

Also, if a vehicle is coming off lease, is there any way to negotiate the Residual Value? Do I speak with Volkswagen Credit regarding same or the dealer?

Banks will generally not negotiate residuals. If the vehicle is worth less than the buyout, they'd rather sell it to their dealer, than make you a deal.
And upon a new deal, is there any way to negotiate a lesser lease end buy-out figure that'd be separate from the Residual Value, or will the Residual Value alone control?

No, it's always the residual + a purchase option fee

The reason I ask is that if you're able to negotiate a good sales price, why shouldn't you also be able to take advantage of same at lease end, instead of always having to pay the MSRP * the Residual Percentage, which can't otherwise be negotiated (as same is based off of the MSRP).

When you negotiate a good sale price, you receive the entire benefit in lower payments, as the residual is fixed. If you want to own the vehicle, just buy it to start with.
Thank you very much!

Hope that helps

dbs6000

Thanks so very much!

Yes, it does help, and I've since spoken with both VW Credit and the selling dealer.

Unfortunately, VW doesn't want to budge on the buy out price, and the selling dealer states they'd never purchase a vehicle that's been in an accident for their own inventory, even if they'd agree to sell the vehicle back to me.

Ugh.