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Got lured into the dealer to check out trading in for an 016 treg. Was told money factor? was .0001 passat was .o1 and .0001 was very good. Waht does money factor or other terms in leasing mean.

I was told bu a Ford manager once if you can get zero financing long term it does not make sense to lease.

After loyalty cash a Lux with driver assist was 51k of course my trade was depreciated more also. 014 with 9500 miles trade in 40k$. Thanks
 

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Salesman called said hold tight he thinks some new promo is coming next week after November 2 when the loyalty dollars expire.
 

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Salesman called said hold tight he thinks some new promo is coming next week after November 2 when the loyalty dollars expire.
You betcha. Will be extended or a new one that's better.
 

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Agree - wait for november.

As far as lease vs finance here's the deal, assume $0 down:

Finance: you amortize the cost of the vehicle over the term of the loan (ie: 48 or 60 mo), at the end you've paid $x in interest and the capital cost of the vehicle. You pay tax on the full purchase price of the vehicle. So lower the interest the better.

Lease: you pay the capital difference between vehicle price and residual value. You pay interest on the full price of the vehicle. You pay tax on the difference between purchase price and residual (not the full price) At lease end you have a guaranteed out (the residual price) and you can choose to buy / resell for a profit if residual was too conservative or just hand it back. As you're paying interest on the full amount, closer to 0% you can get the better. Multiply money factor by 2.4 to get interest rate...in this case its an amazing rate. Look at interest rate, purchase price and residual value, you want the lowest rate and you want minimum spread between purchase and residual

All to say, its just different financing tools and your only motivator should be greed to get the vehicle you want for the lowest total outlay of cash. People get all hung up on lease vs. own...if you're financing you don't own the vehicle until the loan is paid so "ownership" is a false term in this case.
 

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Thanks now I understand it. So if you finance at a purchase price of 51k, should you lease and expect the purchase price to be 51k also and make sure you bargain for the best purchase price on a lease also? Thanks so much might get a new one but even 2 years apart they are pretty much the same Treg with or without driver aids.
 

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And the residual is set by VW? like 55 percent of value on a 3 year loan but it varies with demand for the vehicle.
 

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Typically residual is set as a percentage of purchase price...for example, on a 3 year lease they may set residual at 45% of purchase price (this is just an example percentage, I don't know what its currently at). Absolutely negotiate purchase price and try and get them to hold on residual. ie: if list is 51K and residual is 25K. Go for 45K price while holding the 25K residual.

As interest is paid on the full amount, its in your personal interest to get the lowest purchase price. The spread between the two is what you pay down, so naturally you want it to be less vs more.

Wait until after nov 2 but now is the best time to lease a 16, residual %age is typically higher earlier in the model year.

Ideally when negotiating, don't reveal you finance intentions (cash, lease, loan) until after you've gotten the purchase price you're chasing. Get to the low water mark first, then hammer away at the financing deal. Yeah it sucks but 30 minutes of negotiating saves you many thousands over the long run.
 

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Absolutely negotiate purchase price and try and get them to hold on residual. ie: if list is 51K and residual is 25K. Go for 45K price while holding the 25K residual.
Is it possible to have the dealership hold on the residual at MSRP price? I thought dealerships recalculate the residual with the same ratio. Has that been done?

Wait until after nov 2 but now is the best time to lease a 16, residual %age is typically higher earlier in the model year.
Is it better to lease a 2016 now? Would the higher residual offset the incentives and lower rate? (I guess I have to go to the dealership and compare 2015 and 2016 models.)



I need the same discount in Canada because most of the 2015s remaining are the higher-level ones.

Salesman called said hold tight he thinks some new promo is coming next week after November 2 when the loyalty dollars expire.
LOL...the first VW salesperson that I worked with offered me a deal so good that I could only have one hour to accept it. It sounds like you have a decent salesperson.
 

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Residuals are never negotiable - always preset by the manufacturer, independent of brand. The best place to check current residuals and money factors is on edmunds.com forums. Here is the one on the touraeg:

2015 Volkswagen Touareg Lease Questions - Car Forums at Edmunds.com

The residuals go up or down depending on mileage, lease term and trim levels (in some cases)

The money factor was explained above - and you are actually off by a factor of 10 :)

it is .00001 (four zeros). So basically 0% (.024%). This is an area where dealerships can and do mark up. Make sure you discuss the actual money factor instead of monthly payment etc.

There is a factory incentive of 5000 lease cash on 2016 Gas, 4k on TDI. 7k and 6k for the 2015s. 2016s are actually a better deal because the MSRP is 2000 less on the 2016s for more features.

Since the lease cash and loyalty incentive are manufacturer subsidized, this is not coming out of your dealer's pocket. They should be willing to sell these cars at or around invoice on top of the incentives, putting the total discounts around 8-10k.

Agree on waiting although it probably won't increase more than 1000 or so.
 

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Forgot to add - BMW sets their residuals artificially high - 60+% on 36 month, 36k leases in most cases. It drives higher turnover that they turn into CPO inventory for the most part.

With the Touareg residuals below 50% they are begging you to buy it out at the end - it doesn't make a lot of sense not to buy it out.. but with the uncertainty around VW the lease gives the customer an "out" which makes a lot of sense in the current circumstance.
 

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Forgot to add - BMW sets their residuals artificially high - 60+% on 36 month, 36k leases in most cases. It drives higher turnover that they turn into CPO inventory for the most part.

With the Touareg residuals below 50% they are begging you to buy it out at the end - it doesn't make a lot of sense not to buy it out.. but with the uncertainty around VW the lease gives the customer an "out" which makes a lot of sense in the current circumstance.
In Canada, VW offers no incentives for the 2016s, and residuals are low. (Still, cars in Canada are cheaper than those in many other countries.) However, I will try to figure out how the 2015 and 2016 residual values affect the payment. Based on a rough calculation, I think the monthly payment actually comes out to be about the same between the two (i.e. within tens of dollars) even without the discounts in interest and vehicle cost, but the overall cost would still be higher for the 2016 if I decide to buy it out at the end. I still believe in the philosophy of owning a well-maintained car for the long-term as a first owner. If the rate is low, and there is a discount on the vehicle, leasing is an attractive option because I can pay part of the vehicle and tax later rather an earlier. It is good to have to option at the end to decide whether or not to keep the vehicle with a guaranteed value at the end of the lease. I have been cheap and buying cars that are undesirable and/or used, which save me money at the time of buying, but they do not meet my daily needs, they have more maintenance as they are older, and I lose more money when I sell. This time, to save money long-term, I will get what I want and need, and keep it.

One benefit of a lease is that when the car gets into an accident, the diminished values belong to the leasing company, not you. If the vehicle is old, whether or not the car has gotten into an accident matters less, but if the vehicle is new, it matters. I just read a thread in ClubLexus that a guy hit a deer 1.5 hour after he took delivery of his 2015 GS. Good thing it was a lease (with GAP insurance) and not a cash/financing purchase.
 

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Agree 100%. There are a lot of people who will tell you that leasing is "bad" but for the most part there is very little understanding of the process. The devil is always in the details.

Leasing gets a bad name because BMW especially can subsidize the residuals and offer very low monthly payments on entry level 320is. It breeds a bit of resentment from some seeing people driving cars they can't really afford and can start people on a long term plan to add monthly expense.
 

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I would love to lease but I drive 20k yearly. That is a problem.
 

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With the Touareg residuals below 50% they are begging you to buy it out at the end - it doesn't make a lot of sense not to buy it out.. but with the uncertainty around VW the lease gives the customer an "out" which makes a lot of sense in the current circumstance.
This. A thousand times.
 
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