ORIGINAL: thedavej2001

I was also wondering if any of you have convinced salesman to give you free options like a nav system or anything else? If so, how did you do that?

ORIGINAL: schaedj


TANSTAAFL! Nothing is free. The best approach is to identify the car you want, down to the last detail, find the invoice price from kbb.com or cars.com, be prepared to pay cash (even if it's a loan from another source), and offer them exactly what you are willing to pay. If the dealer has the car on the lot, you will get a better price, since he is already on the hook for interest if he doesn't sell it. If you are flexible on the options, and can find one "close enough" on the lot, you will get the best possible deal. If the dealer does the financing, he will pick up some cash on the loan (whether a direct fee or a kick back from the bank) and that will cost you money. If it's a lease, there will be a large "bank fee" which will cancel out any negotiating you do. If you have a trade, the dealer will undervalue it to make up money on the deal. If the salesman is throwing in "free" options, you're already paying too much for the car.

Usually, any dealer will take 1% over invoice (some will take less) on a straight up (cash) deal for a car on their lot.

Good Luck!

Dave

ORIGINAL: drkenan

Are you completely sure that you want to lease? Leasing is nice if you want to pay a bunch of $$$ and have nothing to show for it in the end. For that price you could find an awesome, fully loaded B6 (or even better B5 ) slightly used. Then you can drive it all you want, mod it and do exactly what you want with it.

If you're dead set on leasing, you might want to visit the lease guide or Lease Compare to get prices and tips for negotiating.

ORIGINAL: thedavej2001




Would this strategy work well with a lease? I mean get the total amount of the lease from a bank loan (monthly payment x number of months) and bring that to the dealership? Not sure if that is a good idea for a lease. For example, say I get a 2006 A4 leased for $430 a month for 36 months. I would go to the bank and get a loan for $430 x 36 = $15,480. I would then pay for the entire lease upfront and pay off the loan to the bank every month. Ideas?

ORIGINAL: schaedj



No, that strategy wouldn't work with a lease, unless you know a banker well enough to prearrange a lease. (Not likely) In a lease, the finance company purchases the car for the agreed upon price, and "rents" it to you for a specified payment over the term. The payment is calculated by adding Fee+Depreciation+Interest for the period of the lease, then dividing for the monthly. Tax (depending on state) is added on afterward to the payment. Since leases are a restricted depreciation, they can more easily be deducted from your taxes, but this can usually only be done if you are using your vehicle for business purposes. You can also deduct a purchased vehicle, but you have to reverse engineer the depreciation, which is already done ahead of time on a lease. If leasing is your primary goal, don't forget, YOU CAN STILL NEGOTIATE PRICE! I used to sell cars, and when a lease customer came in, they would immediately go to "What's my payment?" I can work the numbers six ways from tuesday, sell you the car for sticker, and put your payment wherever I want it.

The critical factors in a lease are:
1) Purchase Price
2) Residual Value
3) Interest Rate
4) Fees

Typically, the manufacturer's leasing program offers you the best deal for 2,3 and 4. Manufacturers will ofen give you a "rebate" by inflating the residual value of the car, thus making your payments lower. This way, they defer their cost impact until the end of the lease term. The caveat there is, if you are planning to buy the car at lease end, you may end up paying too much for it compared to what is available on the used market, and take a big depreciation hit just by paying it off. Edmunds.com says Audi has a couple of special lease rates right now. However, with a "guaranteed payment" lease rate, you are typically paying sticker for the car. You can negotiate price to keep the same payment with less up front cash.

The reason leases are a mystery to people is #4. A "shady" dealer can throw in a $5000 "acquisition fee", which turns all of your negotiations into crap. That fee is basically split 50/50 between the bank and the dealer. Whatever you do, ask for all of the terms of the deal before you agree to anything.

On the other hand, some of my happiest customers were the ones who walked in, picked a car, and walked out with a full price lease. If you get the car you want, and you can afford it, who really cares what you paid for the car?

The only other thing to watch out for is mileage. If you are going to put exactly 12,000 miles per year on your car, you will get a good deal for the lease rate. If you are going to put 15,000 / year on, you should pay for at least 13,500 up front. (Up front miles are around .05/mile, turn in cost is about .15/mile, kind of like prepaying for a full tank of gas at a rental car place) If you are going to put 20,000 / year on, you should buy the car.

Good luck!

Dave