After a long wait I leased an ID.4 yesterday. I found this forum today . I’ve read several threads on ID.4 leases and ‘they are a bad deal’ is a consistent theme. Is mine a bad deal?
Searching for an EV lease I found that only VW in my area would reduce/rebate the MSRP by the federal tax credit. So it seemed to me to be a no-brainer to go with the ID.4. I wanted to lease so I’m not stuck with an EV with 250 mile range if in 3 years battery technology has improved to say 400 mile range standard issue. May or may not happen but if the value drops like a rock leasing seemed the safer bet.
MF is 0.00251 and RV is 52%. MF seemed high to me (excellent credit) but I guess with the shortage that was the best they could do. RV is on par with the average 3 year RV for EVs. (And maybe this isn’t a good way to think about it but it seemed to me the effective RV is much higher if you calculate after the rebates.)
Anxious to hear thoughts from the community, I hope I didn’t just make a big mistake!
I definitely will! In the meantime I’d really like to learn more, there seems to be something I don’t understand.
I want to think about my lease in four main pieces: the price of the car, the residual value, the interest, and the fees. Price of the car: I got MSRP plus destination fee, no dealership markups. Then I got/will get 11k in rebates! RV: 52%, right on par with average EV RV (or if you calculate it after the rebates RV is more like 61%) Interest: MF of 0.00251. Maybe this is really high? Fees: all CA taxes, DMV, and acquisition fees etc. that at least to me seemed standard issue
One thing you want to be careful with is some manufacturers who pass the tax credit make it up with higher MF and lower RV. Just compare the RV and MF of Q5 and Q5 e and you will see what I’m talking about. Also speaking of MF, hopefully you verified that it’s not marked up.
I think you did as good as possible given the vehicle you want and the lease program being offered. Your payment is about $100 lower then anything offered on Rodo and I suspect your rebates are larger.
However, you would have been better off financing this vehicle for 84 months. The payments would have been lower, as compared to this lease program, and you will have better ability to control when and how you choose to eventually dispose of the vehicle. This is important, because your vehicle will most likely significantly outperform it’s RV and wind up capturing positive equity – not drop like a rock like you fear…
eg: 2021 VOLKSWAGEN ID.4 AWD 4D SUV PRO S | BASE MMR $55,100
I’m new to thinking about this, but I think I’m paying less than 48% depreciation?
Rounding here:
price is $47k (MSRP + destination charge)
The depreciation is $47k-$24k = $23k
However:
After rebates the cost is $37k
So the depreciation I pay is $37k-24k = $13k
Working backwards this would be an effective RV of ($47-$13)/$47 = 70%
To your second point, yeah that APR seemed very high to me too. But when I think about any interest rate as long as it is less than the average stock market return I’ll still come out ahead over my lifetime
and yet you’re paying $20.5k. ($22.5k minus $2k CA)
If you financed it and buy price ($47k) plus tax plus interest by 36-mo totaled say $53k minus $9500 in rebates, your all in would be $43.5k. So if it’s worth more than $23k in 36-mo or if you would have been ok with keeping it significantly longer, you would have been better of financing it.
Yes, 36*600 is more than 13k, but that’s because my total payment also includes interest, taxes, and fees. I was talking about the portion that covers the depreciation
I see, that makes sense. I found an article on Car and Driver that said average EV RV after 3 years is 53%, so it seemed to me like what I was offered was reasonable. I have no idea if my MF was any good. Is 0.00251 high for excellent credit?
Agreed - I don’t plan on keeping it for more than the term of the lease. The range on the vehicle is 260mi. Given where things have gone in the last decade my hope is that battery technology will continue to mature, and I will be able to get a vehicle in the same price range that has 300+ maybe even 400+mi range when this lease ends. I’m also worried the true RV could be a lot lower, so it is a bit of a hedge against that.
If after 3 years the car is worth more than the $23k RV doesn’t that mean I have positive equity and can buy it outright and sell it for profit? In that case what’s the benefit of financing[edit]? Would the total interest likely have been less? Or something else?
I disagree with financing this UNLESS you would have gotten more rebates and/or significantly better interest rate. I could be wrong, but I don’t think either is true here.
One thing I’m confused about. More than once, you’ve said “MSRP plus destination.” What was the number on the sticker (AKA, Monroney label)? MSRP already includes a destination fee. So I’m trying to ascertain if they actually got you for an ADM.
That MF is very nearly Navy Federal’s 96 month loan rate. At 60 months it’s half, 72 months is 3.29. That difference effectively consumed the $750 CCFR.
I’m sure OP also verified their actual Federal Tax due (not withheld) is >= $7500
. I’ve read several threads on ID.4 leases and ‘they are a bad deal’ is a consistent theme. Is mine a bad deal?
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