AF 4.2

Hello - I have an 05 A6 4.2 and my 2 yr lease is up in 3 months.

My friend who has an Infiniti M35 who leased the same time as me and he is already receiving notices and discount letters from infiniti trying to persaude him to lease or buy another infiniti.
I haven't received anything from Audi ... this is the first car I ever lease that I actually kept to the end of the term, will Audi be sending me any enticements to get another Audi and if so when do they normally do this ?

Also my buy out price is $38,700 plus tax, is this Negotiable ? Should I call them up and make them an offer ?
When they ask my mileage should I tell them I think it's around 20k since that is what I am allowed and it makes the car less desirable then the 14k miles it actually has ...

BTW I made all of my payments owed to audi 2 months ago so I don't receive the monthly statements anymore. Maybe I won't be getting any mail from them because of this !?!

Thanks for any advice you can give me ...

Quattrings

great deal. I've seen 4.2s go for much more on the used market with more miles than you have.

April

That sounds like a good number to start with.

AFS has gap insurance to cover any negative discrepancy between the contracted residual and actual auction value, so they have been less interested in bargaining than in the past.

As quattrings says, wait another month to see what happens. You will likely get some inducements for a new lease. If not, you can always contact AoA/AFS. Since you say you've never gotten any correspondance from them, give AoA a call to make sure they have your correct address - there can be mix-ups and I'm not sure AFS checks address data for them.

Inocent Bystndr

I don't know the statistics, but don't the vast majority of lessees do so because they don't expect to keep the car? Leasing is rarely a good financial move if your intent is to hold the car beyond the lease term. The most attractive features of leasing are to lower the monthly cost and limit the up front capital required. The net result is that more folks are able to "afford" to drive these expensive cars.

One way to move more of the product is to make the lease programs more aggressive (and competitive with MB/BMW). If AFS isn't doing that by supporting the money factors and/or residuals, then AOA must be achieving its unit sales and margin/unit goals some other way. I'm sure the guys running the show are pretty smart in this area. As consumers we wish that they were being more aggressive, but Audi clearly has a long term goal that they feel they are on track to achieve.

MB and BMW, on the other hand are taking a different tack. Their finance arms are supporting both residuals and m/f on many of their vehicles. In addition, the dealers (at least in SoCal) are agreeing to significant discounts from MSRP in order to move more cars.

Interestingly, Audi management's actions in this area reflect a feeling that they are "dealing from strength" in trying to hold margins whereas MB/BMW policies seem almost defensive (insecure?) in comparison. These are surely gross overgeneralizations on my part, but I had no trouble getting MB/BMW dealers here to go below invoice on the E and 5/7 series cars I was looking at a couple of months ago. Audi certainly discounted, even on the S6, but not nearly as aggressively as the others.

April

Audi did use stronger residuals some time ago, and it resulted in massive losses for the company. They also tried incentives in the form of large cap reductions for leases or cash back for buyers.

The thing is when real life resale did not match the residuals (in part because of discounting up front? It usually comes back to haunt you), AFS took a serious bath. A much larger one than the folks in Germany wanted to see without any sign of increased resale long term. Now that they have an underwriter who covers any gap, they are not allowed to play that game nearly so much. As I recall, BMW and Mercedes self-insure for gap (they have the margins elsewhere to cover that), and thus they can offer subvented rates that Audi cannot at this time. If Audi can improve it's image in the next few years, and get higher resale as a result, then I think we'll see a shift in residuals. They've made massive investments in quality from the design level upwards, so so long as dealers can deliver in the service dept, things will improve.

My A3 is leased and the rate is nutz. But I am holding out for a stickshift V6 version, or will go elsewhere in about a year when the lease is up. I knew exactly what I was doing - and giving up. The residual is very low on my car, so depending on the A3 market it might be worth buying it out at the end and selling it myself for more than the residual, pocketing the difference.