Looking for advice before I make a potentially stupid decision. I currently have a 2019 Audi Q5 Premium Plus lease coming to an end in two months. The residual value stated on my lease contract is $25,500. I have been getting some offers of 30-33k as trade in value. Thinking about extending my lease six months? Would Audi financial do that? I have been reading that they only allow you to extend your lease if you are getting another Audi. If I can’t do that then what do I do? I need a vehicle and don’t want to finance or purchase my car. I would like to take advantage of this positive equity in my vehicle because I know it won’t last much longer (used car market softening). Is there any comparable vehicle that I could get a “decent” lease on?
You can extend your lease for 6 month without an order .
Maybe a Lexus RX but even then it’s a better finance.
Are there any fees associated with doing that? Or will I just continue to pay my current payment of $490? Do we think the leasing market will be any better in six months? I am also worried I may not have equity if I wait six months!
No one has a crystal ball, but I doubt things would improve in 6 months. TBH, it could be another 12 to 18 months for things to get back to “normal”.
I am just speculating here.
I understand. So the question becomes what happens after the six month lease extension is up? Then I risk having no equity in my vehicle and thus being forced to put down a lot of money to get to a reasonable lease payment.
Yep. So you need to start exploring all your options.
How about this?
@JMD - What other SUVs/brands have you looked at as a replacement for the Q5?
Looked at the X3 (new and loaner), RDX, Q3, XC60, and GV70. Don’t know if the lexus will realistically get me any closer to where I want to be.
No. Probably no major changes or relief ‘til late 2023 early 2024.
I understand. So what would your advice be?
Did you like any of these?
Do you mind clarifying this comment?
I really LOVE the X3 and am currently shopping around for demo’s (a few dealerships have them), but the numbers are still high ($700’s/month). I want to see something with a 5 or 6 (low 6’s) in front of it with just my equity at signing.
If your giving them the money up front to “get to a reasonable lease payment” how is it reasonable?
Many people on here have historically leased b/c it made financial sense while allowing one to have a new under warranty vehicle. Now w/ few exceptions it is making more sense to finance even for the “well, I have always leased” crowd.
What’s the objection to getting an aftermarket warranty or shopping for a discount on an Audi warranty and keeping the Q5? It doesn’t appear your really looking to change vehicle types. I know you said your opposed to purchasing your car but if it makes the most financial sense, then I am not sure what the objection is?
There are other brands and SUVs that might be cheaper to lease. Payment shopping and potentially using your equity towards a down payment on a new lease is not advisable.
Check out broker deals in the Marketplace.
You essentially have 2 options:
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Sell it (note: to anyone other than Vw/Audi dealer or group that has one, you’ll have to buy it and pay sales tax and re-title it before re-selling) and roll the equity into an otherwise expensive lease or purchase
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Buy it out, hang onto your equity, wait out the market. Sure some of the equity will diminish over the next year or so, but if you roll the equity and pay a high price for something new, you’ll have this problem anyway. Personally I see it as a lesser risk to stick with your current car unless you really hate it.
If you got something for $600/mo and paid equity upfront, you’re talking a total cost of $27k+. For just a few grand more you’d completely own your current vehicle.
Here you go, it looks like it is exactly what you are looking for.
I think the goal is not quite clear here. Is the priority looking for lowest total cost, are you just looking for a new SUV in the same class for a certainly monthly payment when using all of the equity?
Yes, your equity may disappear in the future, but that would presumably also mean that the new-car transaction prices have decreased, as well. And using your equity for something other than an Audi would presumably result in losing some of that equity for taxes (as another poster mentioned).
At any rate, if it’s the latter option, I agree that contacting a broker and looking at the marketplace would be the first step. Unless you’re looking at a highly-optioned X3, I would imagine you should be able to find something close to your desired monthly.
going to piggyback off this thread since I am in a similar situation with our Q7. my lease comes due in January 2023 and I plan to buy the car out and keep it until the 4-year/ 50k warranty runs out. at that point, I’ll reassess the market and decide if we need to keep the Q7 longer and look into extended warranties.
does it make sense to payoff the lease early or should I just wait until I reach lease end? any pro’s to buying out now aside from a lower rate on the loan interest if I act now?
I paid off our Tiguan about 7-mo early. A few advantages:
- since you can’t sell it to anyone but VW/Audi dealers without your equity being wiped out due to the higher price they charge 3rd parties, you almost have to do this if you want to sell it anyway (depends on the vehicle - in my case the few VW dealers I tried lowballed vs Carvana offer), but it takes time, about 4-weeks or so for payoff, re-title, etc in my case.
- You are likely sitting on anywhere from 7k to 11k equity and if that is the case, strong chance that it will be taken by the captive in case of a total loss (low chance of a total loss, but still). So the sooner you buy it out, the less chance of losing your equity in case it’s totalled
If you’re reasonably certain you’re going to buy out the car anyway, it’s probably worth doing it sooner rather than later.