[nickm]

x2 the dealer is just wrong. It makes no difference if they apply the trade to the value of the vehicle or apply the trade to your down payment.

One item of interest for you - regardless on if they apply it to vehicle price reduction or down payment, you get a tax credit for the value of the trade in. Once you calculate the total sales tax on the value of the lease, you apply the credit from your trade towards this sale tax - effectively lowering your total payment.

I've only seen the more money down for better rate on Lexus, haven't seen this on any of the German makes.

As for VW not being ready to sell 50K vehicles, VW has been at the Touareg game for over 10 years and VW Finance runs financing for VW, Audi, Porsche, Lambo, Bentley, Bugatti so they are more than familiar with financing expensive vehicles into the 7 figure range. You may have just gotten a bad sales rep.

 

[nickm]

Never put a dime down on a lease. The whole point of a lease is to use their money since its pretty easy to beat a 1 point interest rate, and also use their money for an income tax expense benefit (if you can). Yes they will charge tax on a downpayment since any payment toward the lease is taxable (you don't pay tax on residual value). Advantage 2 of a lease is a guaranteed residual, giving you a pre-determined "out" point at a guaranteed price.

Understanding a lease is pretty easy, you pay interest on the whole amount of the vehicle (say 60k), but you only make payments plus sales tax on the difference between purchase price and residual (say 30k). So pay down 30k while paying interest on 60k is essentially the structure of the deal. There is ZERO advantage to putting money down as you are still paying the full interest cost.

 

[nickm]

I beg to differ
Putting money down brings a $1300 month payment to $800. The DP gets divided over the lease term making a more manageable payment

Financially, its the equivalent of pre-paying rent to a landlord so you can cash flow the rent. Purely from a financial point of view there is no interest saved, or any other sort of financial advantage if you pre-pay (put money down).

If its an emotional decision to get into something you want at a lower monthly cash flow then yes I agree with what you're saying.

 

[nickm]

I think where Lexus is way ahead of VW (and just about everyone else) is that they dictate the client buying experience to the dealers. Dealers have no discretion re: what "sales tactics" to use. As you say, you get the whole deal up front with them...