Er-excess-4

Dealer is offering for a 2.7t demo with 4000 miles on it. Lease price $655 with 15K per year for 36 months. $1100 due at signing. This sounds high to me what do you think? Probably can talk him down to 600 per month.

Chuckie T

the actual elements of the lease rather than the monthly payment amount. Specifically:

1. "capitalized cost" of the vehicle or the agreed upon cost of the vehicle.
2. The "capitalized cost reduction" or any payment (e.g., down payment) that reduces the capitalized cost of the vehicle (this does not include acquisition fees, etc. and, by the way, a bad way to lower the monthly payment)
3. The "residual value" of the vehicle at the conclusion of the lease (this is usually expressed as a percentage and is what the lease company believes the car will be worth - it changes based on the length of the lease and/or annual miles)
4. The "money factor", which is, essentially, the interest rate. Multiply this number times 2400 and you will have the actual APR.

All of the above can be negotiated except #3. If I were you, I would first determine the going money factor for the vehicle to make sure the dealer wasn't trying to bake in a little profit on this. Second I would treat the negotiations for the value of the car as if I were paying cash to get the best deal (or lowest cap. cost). Lastly, I would avoid making a cap cost reduction as a means for lowering the payment as it is a bad investment vehicle.

I hope this helps. Don't let them screw your - or your friend. BTW, you should be able to get into a 2.7T for a lot less than $650. I pay slightly more than that for my custom ordered, loaded 4.2 including MA sales tax ($0 cap cost reduction, 39 months & 12k miles/year). And I made the deal in early '01 before the economy really hit the skids.

chairman

One of the members of this board Kgnast-Nemo4.2 works for a dealer, he may be able to shed some additional light on your situation.