Leasing the Stop-Sale Cars

My question to those that went with the lease, did you have a hefty rent charge? I've never leased before, and was thinking this was a zero percent lease, and when I specifically asked the F&I gal what a rent charge is she mumbled something that didn't seem to indicate interest. The rent charge on the GSW I got was $1764, pretty stiff for a two year lease me thinks, but I'm new to this.

I knew up front about the $625 lease acquisition fee eating into the $8500 discount, but this extra rent charge really reduced the advantage of a lease over the sixty month 0% financing. Did I get taken by some non-standard terms, was there a mistake, or is this normal?

BTW, I thought the first payment was due at signing, even asked her about that, but they never took a check from me despite the fact that the paperwork says it was due the date of sale (5/19). Also, because I did not drive the car off the lot yet (didn't have a second driver with me), and not paid, is the deal officially consummated? I know they considered it to be, and really wanted me to take it instead of my old (2015!) GSW.

My rent fee is $8XX. Don't remember the exact amount. Lease total was around $11,000 I think over the two years.

Dang, sounds like you got a better deal. Mine says it is VW Credit - would think it is the same for everyone with excellent credit like I have. Can the dealers raise the rent to pocket it? I'm guessing so.

davidlp said:

Dang, sounds like you got a better deal. Mine says it is VW Credit - would think it is the same for everyone with excellent credit like I have. Can the dealers raise the rent to pocket it? I'm guessing so.

Click to expand...

They must have done that to me as well. I only saved 600$ doing the lease and apparently doesn't matter if i pay it off now or at the end.
As far as the 1st payment, i was required to put about 2.4xx down and add my first payment to it. i have A+ credit and got a $ factor of 1%.

Looking at my numbers now... (rounded)
Total of lease payments = $10,600
Acquisition Fee = $625
Rent Charge = $894
Disposition Fee = $350 (Only paid if I don't buy the car, which I plan to)

So it was a bit less than $2,000 that I saved over the 0% deal. I went in planning to do the lease and then buy out but it makes no sense to. I will finish the lease and buy it.

They have another TDI GSW SE (I think) on the lot and a few TDI Jettas. I'm half tempted to see what kind of deal they'd do on a Jetta...

Best I can figure from the lease formulas I've since found on-line that I paid a lease or money factor of .0023 or 5.5% - hardly the near 0% I was expecting and some have reported. It does seem from other posts I've since found that 2.5% is fairly common. I'm going to verify with VW Credit this morning about the terms of early payoff. The dealer said there's no penalty but didn't specifically address whether I could save on interest - never thought to ask on a lease. If I can slash the interest by early payoff I'm going to go back to the dealer and threaten that and see what happens. They'd lose a bunch on the crawl-back and may decide to meet me half-way, like a partial refund.

BTW, here's the formula I found on a lease site that I used - may be of help.
(Adjusted Capital Cost + Residual) * Money Factor + (Adjusted Capital Cost - Residual) / Lease Term = payment
($20022.11 + 11,931.75) * X + ($20022.11 - 11,931.75)/24= $410.59 where X is the money factor variable we're solving for. Hopefully I remember my math from decades ago in solving the variable.
31953.86X + 337.1 = 410.59
31953.86X = 73.49
X=.0023 lease/money factor
.0023 x 2400 = interest rate = 5.5%
Since some others have reported the same lease factor I'm guessing I got it right. Not sure why 5.5% is popular with F&I.

You have __secured__ the car of your dreams, for next 2 years.

There're 2 ways you can play the lease.

1. You can purchase the lease now and save the rent (interest). Say $800 over 24month - less than $40/m. Not a whole lot. Add the lease termination fee refund, and now it is a cool $1K. But, all of these savings will disappear when you register the car, as you'd have to pay sales tax.

But, you should be still about $2K ahead, compared to the 0%/72m deal.

2. You can ride out the lease and see what develops in next 2 years. Who knows, may be VW will grow a pair and bring TDI Variant to our shores ? TDI Alltrack ? Or/and, they develop EA388, with 200HP and 400FP torque, that makes no NOx ? . Or, diesel Mazda Cx5 happens to be an absolute gem of a car.

If nothing happens in next 2 years, then purchasing the lease would be the right thing to do , simply because of insanely good wty afforded to '15 "new" fixed cars. Assuming one still needs a car

Yep, have had my eye on the Mazda diesel even back when I got the original 2015 TDI in 2015. That's at least how long they've been promising, though it does appear it will actually come through. This is by far the most concrete they've been about production. If it was out now I'd have probably bought it. Safe to say it will out-handle the GSW, which is my worst handling VW ever, not to say it's bad, and the CX-5 has equal cargo space, but with a taller area which is important for what I haul.

One thing to keep in mind is if you don't like the numbers, you have three days (at least in most states) to stop the sale. You could try and see if the finance numbers make more sense.

r11 said:

You have __secured__ the car of your dreams, for next 2 years.

There're 2 ways you can play the lease.

1. You can purchase the lease now and save the rent (interest). Say $800 over 24month - less than $40/m. Not a whole lot. Add the lease termination fee refund, and now it is a cool $1K. But, all of these savings will disappear when you register the car, as you'd have to pay sales tax.

2. You can ride out the lease and see what develops in next 2 years. Who knows, may be VW will grow a pair and bring TDI Variant to our shores ? TDI Alltrack ? Or/and, they develop EA388, with 200HP and 400FP torque, that makes no NOx ? . Or, diesel Mazda Cx5 happens to be an absolute gem of a car.

If nothing happens in next 2 years, then purchasing the lease would be the right thing to do , simply because of insanely good wty afforded to '15 "new" fixed cars. Assuming one still needs a car

Click to expand...

So, for option number one i'm confused since the dealer told me that i will pay for all the interest of the lease regardless of buying out right away or not.

Update:
I called VW Credit, and they said there is no way you get the "interest" back if you pay off early. It just doesn't work like financing, with there being no concept of interest as we're used to. They didn't have any knowledge of my lease yet, saying the paperwork is received and entered within 2-3 weeks, that the dealers tend to send them in batches.

I got nowhere with the dealer on the money factor, insisting I'd agreed to the monthly payments (yes, but...) and that it was a fair rate within norms for this region, and that it varies around the country. She insisted the whole reason VW gives the extra $3.5k is to cover the acquisition costs and "interest" for those preferring a lease. From that perspective her argument makes some sense, I'm reluctant to admit. I couldn't think of any other reason VW would give leases the extra incentive.

Sigh, time to move on and enjoy the car.

The actual few that purchased their lease early, did report the "rent" was refunded almost entirely. See my other thread.

http://forums.tdiclub.com/showthread.php?t=476725

There's no early purchase penalty. The "disposition" fee is refunded as well.

Unlike with the financing where the interest rate is set by VWC, dealers have wide latitude with money factor - whatever they manage to massage out of lessee, is their gain, pure and simple.

When we come in, looking for the pink unicorn, with that look of desperation on our faces, lubed up and needing no reach-around, they KNOW they can have their way with us

But, if they are nasty to you, you can purchase out before 90 days and then the dealer gets bupkus - as in $0 for the lease origination.

R11, appreciate that, but I specifically called VW Credit about an early buyout and was told I would not get anything refunded, that I would have to make all 24 payments in full. I explained very clearly why I was asking. Did I talk to the wrong person? I don't know. I can try again in a few weeks once my paperwork is in their system. I would think whatever the policy is is universal, so am holding out hope I was told wrong. With a 5.5% money factor equivalent, and <3% available from my local credit union on used cars, combined with just being pissed, I'd do it.

I still find it odd that I walked out of there without making the first payment upfront like I expected and the contract says. The sales rep seemed perplexed when I asked him about it later. I think they screwed up.

Among other info, I see this when I do a pay off quote from VW credit:
Lease Charge Rebate: -$800.70

Hi davidlp, I paid off my lease even before the first payment was due and I got the rent (interest) back and other fees. All you have to do is create an account on VW Credit once you have your lease account number. Then under the payments tab on the left, request a payoff quote. Leasing for me saved over $2,200.00 over the o% loan. Only thing is with the lease you can't pay it off on line. You print off the lease quote, fill out the paperwork that prints with the quote, get a cashiers check, and mail it to them. That's it.

Just to clarify, when I said 1st payment, I meant the first payment due after you walk out the dealers door. I made the first payment as part of the money paid to the dealer at the time of the purchase.

That's fantastic! I haven't even made my first payment! I asked the F&I gal "don't you need the first payment?" and I got this mumbo-jumbo answer, and the next thing I know I've got keys, plates, and registration and am being guided out the door. After reviewing the contract later, where it says first payment due at delivery, as I expected, I contact the sales rep and ask what's up. He acts surprised, and four days later no one has come looking for money! I'm like WTH? Interesting place.

Look carefully, may be you already have the title too ?