Leased [Balloon Payment] a 2023 Audi eTron Sportback back in April of 2023. It’s a 24 month contract and the guaranteed buyback amount (balloon) at the end of the lease is $54k. There are 15 payments remaining at ~$700/month and there are ~8k miles on the car. The Audi FS payoff quote is $61,725 and Carvana is quoting about $47,500 which is somewhat shocking given the sticker price was about $70k - so there is no equity in the car.
I am moving to a remote part of the country in April where it would be somewhat impractical to keep the car due how poor it does with long distance travel. Not out of the question, but not preferable, especially since I would probably have to ship it. I would like to get out of this car and into an Audi Q5e, and am curious if anyone has any recommendations on options that are out there? Given the negative equity, I certainly don’t want to roll the remaining payments into a new lease so thats out of the question. My goal would be to have Audi FS pull the lease ahead, but I’m not sure if thats unprecedented given the time remaining?
One angle that I would love some advice on is whether the rapid depreciation of an EV like this, where the current value is already well below the buyback price, would mean Audi would actually prefer to take it in now vs later to avoid being more upside down than they already are? Is there a negotiation angle here? It’s not really clear to me how the buyback of the balloon works between AudiFS and the dealer.
Last wrinkle - I was lightly tapped from behind a month ago which left some fairly minor scuffs on the plastic of the rear bumper. Since it was a hit and run, I would owe a deductible of $1k to fix it. The full quote from the shop was $6k since they basically just need to order the replacement plastic piece which they said Audi charges a bunch for. They told me it was so minor/cosmetic (you can barely see it), I was better waiting until closer to the lease end to do it. As such, I haven’t fixed it, so the vehicle is not showing any “accident” history. Since executing the claim would add an accident to the vehicle and further impact its market value, I wonder if there is a world in which I avoid the $1k deductible if Audi would rather swap the part themselves and keep the accident history off the car?
Unless Audi offers an official pull-ahead program there’s not much you can do other than 1) just ride the lease out till the end, or 2) sell/trade it to another Audi/VW dealer and eat the $14k of negative equity.
Audi is not going to negotiate on this, doesn’t matter that your car is way underwater. Practically all EV’s are way underwater the second you drive them off the lot so this is not surprising.
As to the scratch and bumper, assuming you do ride the lease out, then I wouldn’t do anything now assuming you can live with the scratches and just schedule your lease end inspection with AutoVIN about a month before your end date.
If the scratches are as minor as you say then it will probably just be normal wear and tear (no charge) or at worst a few hundred bucks of charges (like $100-$200). Way better than spending a $1k deductible to fix it and also having it ding your insurance.
Audi doesn’t care that it has minor damage and is not going to just give you a bumper to keep an accident off the record or anything like that.
It’s probably a question of semantics and OP is using terms interchangeably. Sounds like a regular lease though (not financed with a balloon payment at the end).
OP - if this is a regular lease, AFS owns the vehicle and the dealer has zero skin in the game at this point. At the end of the lease, there are three options:
You buy it out for the agreed upon Residual Value (and no, there’s no pull ahead nor will AFS renegotiate, regardless of market conditions).
AFS sends the car to auction. More, less, they don’t care. It’s just an accounting exercise (especially for one car) and an arms-length transaction.
The dealer grounding your lease (taking in your lease at end; doesn’t have to be original dealer), has the option of buying your car for their inventory. Typically high demand or easily sold vehicles. They don’t have to buy it. If they don’t, it just goes to auction.
If you try to end your lease early, the/an Audi dealer can buy it at whatever price AFS states; note that a non-Audi dealer will pay a marked up price. But they don’t have to, because the agreement is between you and AFS. Think of any dealer as a non-invested third party.
As for your damaged bumper, they don’t care really. AFS will just bill you for it and send the car to auction. If the dealer wants to buy it, they’ll fix it themselves and their offer to you will reflect that.
Thanks all, and apologies for the confusion regarding semantics. This is a Balloon Contract, which behaves similarly to a lease, in that the contract provides a guaranteed buy out price which AFS commits to should I choose to sell it back to them at the end of the term (24 months). The difference is I own the car at this point, whereas with a standard lease I would not. This is fairly common in Chicago as it provides a workaround to the taxes imposed on standard leases.
Sounds like whether it is a Balloon Contract or a standard lease, I’m stuck riding this out unless I call AFS and they decide for whatever reason to change things. Frustrating as I’ll need to buy snow tires for all of 4 months. Given I’ll be headed somewhere which will make any potential repairs much more complex, I’ll probably just have to bite the bullet and go through with the claim ahead of relocating. Not ideal but so it goes
I don’t think you misspoke anywhere. On LH most discussion about balloon financing has been third-parties, you had a captive ballon (my first “lease” was a ballon from the captive). I’m not as familiar with Audi’s version but typically a manufacturer pull-ahead is only on true leases because they own the car (captive is first on title, leasee isn’t), they are taking their car back early. If Audi’s operates like other captive balloon, you are truly first on the title and AFS is a lien holder - it’s your car with a guaranteed option to return it at the disposition date. Unfortunately, that means if you want out any earlier than the disposition date, you are responsible for any negative equity.
With my prior ballon I couldn’t even return it early if I made all the payments, not sure how strict AFS is.
Got it! Would it make any sense (or is it even possible) to roll the remaining ~12 payments into a new 36 month lease, spreading them out over that time horizon? So let’s say there are 12 payments left at $700 each, totaling $8,400 - is there a world in which I negotiate a new Audi lease at a hypothetical $500/month, and $233 is added ($8400/36) on top for a total of $733? I’m guessing that’s ignoring some additional interest component, or more likely is not what would get rolled in, rather it would be the difference between the buyout price and the current market value? Curious if that would be an angle given there is no escaping the remaining payments I owe.
To my knowledge, there is no pull ahead program being offered by Audi at the moment. 3 years ago, I got an offer for a lease pull ahead from Audi. However, no such offer has been presented to me this year with 3 payments left on my existing lease.
Very helpful, and yea, given the discrepancy between the current payoff and market value - no chance I’ll finance that. Much cheaper to ship it and buy snow tires for one winter than finance 14k. Thanks for all the help!
Do you have a (normal) relative or a very good friend who would be interested in taking over your lease? You got a decent payment on a short term lease so it might be attractive to some. The issue is that you’d remain on the Audi contract regardless, therefore, limiting my question to F&F.
