Buy or Lease?

[brownnugen]

I think I've found the "one" that meets most of my wants/needs. It is a GSW manual (TDI obviously) S trim for $20, 735 (plus whatever for TTL & misc fees).

I don't know if this has been covered before but can someone please simplify and break down whether it is cheaper for me to buy or lease?

I can afford to pay cash for the car but understand that I have to finance with Volkswagen.

Thanks,
-Nick

 

[2015vwgolfdiesel]

I think I've found the "one" that meets most of my wants/needs. It is a GSW manual (TDI obviously) S trim for $20, 735 (plus whatever for TTL & misc fees).

I don't know if this has been covered before but can someone please simplify and break down whether it is cheaper for me to buy or lease?

I can afford to pay cash for the car but understand that I have to finance with Volkswagen.

Thanks,

-Nick

This "new" 2015 sales has things different than normal times

IMO -- It is cheaper to own in the long run. You own the equity

Unless you don't like to give great personal care to the ride.. Many leasers ride 'em hard, at least to the extinct they do not get penalized at turn in time.

There is a reason you have to finance with WAG ~~ there is money in it up and down the line, and you are paying the load.

If the interest is 0% there is no problem, If the interest is more, can you pay it off early with no penalty?

Good luck

 

[n1das]

Cheaper to buy outright and keep long term. You own the equity. Best to pay cash for it if you can and then not have car payments.

With my logging around 1k miles/week, leasing won't work for me. I have to buy and keep long term. I also like not having car payments.

Good luck.

 

[brownnugen]

I should have clarified that I intend to keep the car for a long time. The only reason I have to get another car is because of a recent collision that will likely total my B4 Passat wagon.

Given that, I need to figure out which option is cheaper in the end. I "heard" that if I lease and buy out the lease, it is about $2,000 cheaper than buying. But I don't know how those numbers were calculated.

 

[AMDTDI]

I "bought" the same car yesterday. The lease came out about $2000 cheaper than the loan. Extra costs on the lease were $629 fee and about $1000 interest, but you get another $3500 off the MSRP. I will buy out the lease as soon as they let me. The only thing they couldn't tell me and I couldn't find in the legalese, was if I buyout the lease early will all of the interest be due or will I only pay for the time I "borrowed" the money. Either way, the lease maximum overall cost out of the door, including sales tax, was about $21k while the loan was $23k.

 

[IndigoBlueWagon]

You can't buy a 2015 outright. If you want the rebate you have to finance with VW Credit. I decided to lease, as the car was about $2,600 cheaper because of the higher rebate, despite the additional leasing fees and interest.

I think the lease makes sense if you can pay cash for the buyout at the end of the lease term. If you're going to have to finance the residual the savings are going to be reduced by the interest you're paying on the loan for the residual.

Also, how your dealer charges fees for leases will matter. Mine builds the lease termination fee into the lease, so that's $625 I don't have to pay at buyout. And I've seen other dealers charging ancillary fees that will eat into the savings the lease offers.

Short answer: If you want to borrow for a longer term and use a loan to pay off the full price of the car the 0% financing is probably a better option. If you can write a check for the residual at the end of the lease term the lease is less expensive.

 

[740GLE]

Anyone have hard facts from VW credit at the window you can buy out the lease?

My sales guy is saying 6 months, but you know, that's the sales guy, so you know whats that worth.

 

[jdyno718]

What are you going to do at end of lease term? purchase with financing? if so then I would buy now at 0% interest, because you would be paying interest on lease and then again interest on financing of a used car somewhere around 3%, depending.

Who receives the remainder 1/3 restitution payment upon completion of the stage 2 fix? does this payout change if leased rather than owned? I don't know but something to consider.

Edited: I just saw what IndigoBlu said, above, I agree and reiterated it here

 

[IndigoBlueWagon]

No restitution on these cars.

 

[whatnxt]

So what is the projected residual value at the end of these leases?

For the lease, if the car's residual is more than what the current market value is, walk away. Unless you really like the car.

Do you even have the option to purchase the car at the end of the lease, i.e. open ended/closed ended lease.

For a purchase, you are stuck.

 

[IndigoBlueWagon]

Residual is 42-26% of MSRP, depending on mileage option selected. Hard to project current market value two years from now, but that's true of any lease. Lease is open ended.

 

[brownnugen]

At the end of the lease, I would just write a check for residual value. I will not need to finance that.

 

[IndigoBlueWagon]

Then the lease is the better deal.

 

[brownnugen]

I asked the dealer for some figures to compare buy vs lease. Do these numbers make sense??

RETAIL:
* * Purchase Price: $25,435
** *Rebate: $5,000
** *Doc Fee $299
** *Taxes: $300
** *Gov't Fees: $114
* * Balance: $21,148
** *

Lease:
* * Purchase Price: $25,435
** *Cash: $310.19
** *Rebate: $8,500
** *Gov't Fees:$114
** *Taxes: $300
** *Doc Fee $299
** *Residual Value: 45%
* * Annual Mileage Allowance: 15k

 

[IndigoBlueWagon]

Yes they make sense. If $25,435 is MSRP then the residual is 11,455.75. If payments are $310.19, total of payments is 7454.56. That means the total cost of the car is $18,900.31 when you lease, or $2,248 less than buying.

Where's the $625 acquisition fee? Built into the lease payments? If not that makes the difference between leasing and buying less. Also, with the lease payments you're paying sales tax on the principal paid through the lease payments. Don't know what that is where you live.

My numbers are similar.

 

[Romagno]

I asked the dealer for some figures to compare buy vs lease. Do these numbers make sense??

RETAIL:
* * Purchase Price: $25,435
** *Rebate: $5,000
** *Doc Fee $299
** *Taxes: $300
** *Gov't Fees: $114
* * Balance: $21,148
** *

Lease:
* * Purchase Price: $25,435
** *Cash: $310.19
** *Rebate: $8,500
** *Gov't Fees:$114
** *Taxes: $300
** *Doc Fee $299
** *Residual Value: 45%
* * Annual Mileage Allowance: 15k

My numbers are similar.

Note that if you intend to buy the car at the end of the lease, the annual mileage allowance is immaterial.

Thus, I will save about $2300 by leasing, then buying rather than buying using the 0% financing deal.

 

[brownnugen]

Is it cheaper to have a lower annual mileage limit versus a higher one? So if I were to state I would drive 10k miles/Year, would my lease payments and residual value be less than if I were to set up the lease for 15k/year?

Or is it all the same at the end, given that I intend to keep the car forever? And then it would make sense to set up the lease for the higher mileage/year in case the car is a lemon and I want to get it off my hands?

This is my first time leasing so I need to get it figured out, especially since I am getting the car in a few hours

 

[trekkar]

As long as there is nothing in the lease deal where you are not allowed to buy at the end it looks like the lease is the better deal. If your taking 5k off msrp for sale price and 8500 of for lease. But who was in a better position before the dieselgate broke? Someone who bought the car or someone who leased?

 

[whatnxt]

Is it cheaper to have a lower annual mileage limit versus a higher one? So if I were to state I would drive 10k miles/Year, would my lease payments and residual value be less than if I were to set up the lease for 15k/year?

If your yearly mileage is higher, the monthly payment will be higher but the residual value will be less as you are paying for the miles that are used.

The market value of these cars in two years is a TBD. With the lease, you have the opportunity to just walk away. With a purchase, you are kind of stuck.

 

[brownnugen]

Anyone get a money factor of .00105? That is the best I was told VW could do.

 

[IndigoBlueWagon]

Anyone get a money factor of .00105? That is the best I was told VW could do.

That's what I got.

And after fees and interest, the difference between buying and leasing is smaller than others have posted, about $1,650. Unless, of course, you pay the lease off early and avoid some of the interest charges. I plan to look at payoff amounts in the fall and see if it's worthwhile.

 

[Locoelectrician]

Anyone get a money factor of .00105? That is the best I was told VW could do.

I had a money factor of .00056 on my lease quote. I purchased though. Was told today money factor is related to trim level. SEL gets the best rate.