I just closed a lease deal on a 2018 SE VW Tiguan for 36M/7.5k/$0. MSRP was $28K, got price down to 23K and change, and as mentioned in the subject line $0 money out of pocket, including first month true sign and drive. Monthly payment is $288 (Very best offer after initial negotiation with 9 dealers, then down to 3 then down to the last 2, $288 was the very best i got in South Florida). My question is more of a curiosity question just to know how things work.
In the closing paperwork it said "due at signing $1756, but obviously i didn’t have to pay anything as it was a sign and drive, so i asked why did it say $1756 cash due at signing, and they told me that it was because they were taking a $2600 loss on my deal (and the sales manager actually showed me the books on my deal and it did said in red -$2600) and that those $1756 was the amount the dealer itself had to come out of pocket to send to the bank on my behalf. How true is this statement, can someone tell me the insights of how this works ? I mean i know i got a very good deal for South Florida given the fact i personally negotiated with 9 dealers and this was the absolute best, but is it true they could take a such a loss in leasing car ? whats the catch ?
Thank you all for your help and knowledge in advance.
That does sound really strange and I can’t underatand why they would write it up like that, but maybe someone else can guess their motivation. Do you mind posting a copy of your paperwork?
Lol their explanation makes sense, at the end of the day they have to send the deal to the bank, which is VW Credit , but just wondering like you why would they put it there as fue at signing and also if they truly can take on a $2600 Loss on a deal. The only reason I can think of is they needed to get rid of inventory for the new 2019 models ?? Not sure tbh
But they already stated the selling price as 23 and change. Why go through the hassle of writing in a fake down payment that doesn’t affect the cap cost? I’m interested in what salespeople on here think.
my last infiniti lease showed me paying $1300 out of pocket at signing when i actually paid them $250. I don’t have an explanation but seems like its common way to write up the deals.
Loss on a deal is usually covered by stair step or some other dealer incentive that is specific to a particular dealer or an unpublished incentive. It’s kinda like dealer incentive money. If a dealer hits it’s target, let’s say 380 vehicles in a month, and they sell 480 the are incremental incentives that the Mfg will kick in as they sell more and more vehicles. It’s like a reward for selling a f*ton of vehicles. It doesn’t have anything to do with you and likely wouldn’t show up in your papers. Did you finance through the captive (VW direct?).
The money they’re “eating” includes an $899 dealer prep charge and a $68.50 tire and battery fee, so it’s not really an actual “cost.” The license and registration fee, sales tax, and first payment total ~$785, which is pretty close to the difference ($695) between the “agreed upon value of the vehicle” and the gross capitalized cost (7A), so the real cost looks to be about $90 (unless the $695 - presumably an acquisition fee - really has to be paid to VW finance).
The MDX I leased a few months ago had this same thing on the paperwork–it’s a numbers game between the dealership and either the lender or corporate. I don’t care how they work the numbers, as long as my payment is what we agreed upon. I think $2000 “cash” appeared out of nowhere on my deal.
