Hi everyone. I have a 2019 Audi Q5 Premium Plus lease with $55k miles on it. Lease ends in February, the residual value on it is 24k. Would you keep the car or sell it? Trying to figure whether to purchase or lease another vehicle that isn’t as expensive. Any tips/advice is always greatly appreciated. I’m in California.
What are you paying right now? What are your current needs? Do you need another luxury SUV?
What were your allotted miles for the lease? Did you have to replace tires or brakes during the lease?
If I were in your shoes I would just return it. There are lots of cheaper options advertised by brokers in the Marketplace.
I am paying $599. I don’t need another lux suv. I was looking at the Kia Sorento. I just keep seeing that most leases are really bad right now. So leaning more towards purchasing this time. Open to any vehicles of the same size
There are some decent Nissan lease deals. Take a look at the Marketplace.
I have no clue what the numbers on a Sorento look like.
Hello 'Hackers - Hoping to gain your collective insight on my current situation and if a buyout makes sense. I tried laying out my current thinking below but am sure there are blind spots in my analysis that someone will identify.
My question is: If this was your situation, and you wanted a new car in the next two years, would you (i) buyout the lease now, (ii) wait until lease expiration then buyout, or (iii) forego selling the car entirely and see what you can find after turning it is upon lease expiration?
Note I am located in Maryland, but the lease started in Virginia. When I started the lease in Virginia, I paid sales tax on the entire vehicle price (as opposed to only the leased value), and after moving to Maryland, I again paid sales tax on the then-current vehicle value (Maryland DMV required this due to their higher sales tax relative to Virginia). As such, if I decide to buy-out the lease, I think sales tax will not apply.
Current Set-Up
- 2021 BMW X5M Competition
- MSD: $9,800
- Monthly Payment: $1,399.29
- Disposition Date: 12/12/23
- Payoff amount (through 2/9/23): $79,426.37
- Mileage/Allowance: 20,XXX/30,000
- Residual Value: $66,217.25
- Condition: Like New. Some minor scratches in the hood from rock chips, but none bigger than an inch. Some curb rash but I purchased wheel and tire protection for those to be fixed without cost. Also bought a new set of tires ready to be installed this Spring.
- Equity: This is where I need a crystal ball, given that I will not likely sell for another year or two, unclear if there will be equity.
Note for the below options I’m using this calculator and amortization schedule.
Option 1 (Buyout now; Sell in 1-2 years)
- Assumptions: No tax (already paid); APR (5.24%)*; Apply $9,800 MSD to down payment; 60-month term
*Per DCU’s current rates, perhaps there are better out there but perhaps not enough to materially alter analysis. - Monthly Payment: $1,321.60
- Total Interest Paid: $9,670
- Sell in 1 year (January 2024): Loan Balance $56,046
- Sell in 2 years (January 2025): Loan Balance $42,808
- Unknowns:
(1) How much would an extended warranty cost if I continue ownership past December 2024 (when factory warranty expires)? Likely at least $3k?
(2) Is it fair to assume I can sell my car for more than the loan balance in January 2024 or January 2025?
Option 2 (Wait Until Lease Expiration, Buyout Lease, Sell 1-2 Years Later)
- Assumptions: No tax (already paid); APR (6.5%)*; Apply $9,800 MSD to down payment; 60-month term
*Given the likelihood the Fed continues raising rates, adding 1 point and change to DCU’s current rates. - Monthly Payment: $1,103.86
- Total Interest Paid: $9,815
- Sell in 1 year (December 2024): Loan Balance $45,695
- Sell in 2 years (December 2025): Loan Balance $35,108
- Unknowns:
(1) How much would an extended warranty cost if I continue ownership past December 2024 (when factory warranty expires)? Likely at least $3k?
(2) Is it fair to assume I can sell my car for more than the loan balance in January 2024 or January 2025?
Option 3 (Forego Selling the Car Entirely; See What I Find in December 2023)
- Unknowns:
(1) Is there a car of similar caliber for approximately the same payment?
(2) Interest rates
Definitely not option 1.
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You’re paid tax on it twice, and you want to buy it now and sell/trade it a year later?
Your lease isn’t up for 11 months, I’d sit tight for 6 months and reassess. I’m not hearing enough conviction to transact sooner.
I understood the tax paid “twice” to mean it summed up to Maryland’s 6% tax on selling price (which is quite punitive to leases). Since Virginia only collected and presumably remitted 4.25% so the balance was owed.
The big question is whether tax would be due again if the lessee bought out the lease.
That’s correct, thanks @max_g. I meant that I paid tax in Virginia when starting the lease and upon moving to Maryland and registering my car there I was required to pay their tax rate, but luckily I only had to pay the difference between Virginia’s and Maryland’s rate (if I waited more than 2 months they could’ve charged me the full 6%). If anyone knows whether taxes are due again upon lease buyout I would greatly appreciate it.
@max_g I’m curious why you’re against option 1. Care you elaborate?
Hopefully this is a related question.
I’m in the middle of securing financing to purchase my car, (Volvo XC60) at the end of it’s lease next month, (and NOT deal with any dealership), but I also want to purchase a 3rd party extended warranty.
I don’t suppose there is any way to do it without involving a dealership, but wrap the warranty into the loan is there?
why pay for something that is already flipped? you’re just going to drive it until it starts crapping out on you in the next year or so, then you’re going to try to get out of it, and you’re going to find that you’re $10k+ flipped.
I’m not sure I understand your reply, let me clarify:
- It’s a 2020 that I leased.
- I’m NOT turning it in, I’m going to buy it, and keep it for several years.
- I want some sort of extended warranty coverage for it.
your payoff is significantly more than the car is worth now. eventually, you will want to get rid of it. you will owe more than the car will be worth.
TBH nobody on earth bought leased BMWs at RV, because inflating RVs was how BMW pushed leasing volume and gained market share. Paying above market value never made sense.
Maybe at lease-end, buying it out becomes the least worst option (if there’s really no more tax owed). But there’s no need to pull that trigger now.
Repetitive leases under the tax burden of 6% of selling price don’t make sense. Under such a regime you’d probably want to transact only every ~5 years. So you’ll probably want to take some time to figure out if this is the right car for that or whether you want to custom order something else to arrive in time.
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Not all third party warranties are created equal, so you’ll want to be very careful here on what you’re buying.
One option is to look around Volvo forums and find a sponsor who sells OEM extended warranties at reasonable prices and pay via CC.
The other is to use a CU that also sells Rt 66 warranties (get only the top, most exclusionary one) and can bundle the price of that into the loan.
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Steingold Volvo in RI does really good pricing on Volvo warranties and Fidelity warranties (top notch 3rd party- popular on the Porsche forums) and you can get pricing online:
$200 off with code Bimmerfest or Rennlist. Bought warranty from them recently and really easy online process.
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Steingold is pretty much the way I’m going, I just didn’t want to lay out the warranty cash separately, but it looks like I don’t really have a choice.
Some OEM and 3rd party warranties will allow you to pay at zero interest on autopay with a CC if outside of the initial loan or later on.
IDK if taking the depreciation risk is a great choice though
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Hi,
New to this forum and seeking advice around whether to buy out the lease on my 2020 Tiguan SE AWD that expires in a few months. Summary of current lease:
Miles: 24,100
Current payment: $469
Residual: $15,164 + $1,577 (tax), also still a few payments owing
I’ve gotten a handful of trade in offers from local VW dealerships, with most ranging from $18K-$19.5K, so a bit of equity, but not as much as I was thinking. Is this worth purchasing at lease end and waiting on market to settle? I’ve also had my eye on an Audi Q3. There are a handful of 2022 models in our area. I got a quote for a new lease:
2022 Q3 S Line Premium
MSRP: $41,745 (less 6% affinity discount + and additional $1250 rebate)
They would give me $21K for my trade. 36/10, .00351MF (although Edmunds quotes .00307), 59% residual. $1081 pay on delivery. $549/month
I’m open to financing the Audi, as I hate to dump my equity into a lease–not sure what kind of rates I can get at AFS or elsewhere (excellent credit).
Any advice would be appreciated!