jetsfan101

Has anyone ever tried this?

Basically you negotiate a one pay lease with Audi, or any manufacturer for that matter. So you basically get a dollar figure which you need to pay the dealer and you keep the car with no additional payments for the duration of a lease.

In Texas, there is significant incentive to a one pay lease. The money factor reduction itself is not that big a deal, but the dealer pays most of your sales tax.

Texas is the worst place to lease because you end up paying taxes on the entire lease of the car, not just the lease amount, as the case with most other states.

So what Audi does in texas, is if you do one pay lease they reduce your money factor by 0.00050 and pay 5% of the car's sales tax. This comes out to a good $$ off your monthly payment

So what if someone wanted the reduction of $$ in a one pay benefit but didn't want to put up the cash up front. Can I, or anyone else for that matter, go to a 3rd party bank, get a loan for the "lease" amount and pay Audi with it?

There will be interest paid to the 3rd party bank which will offset some of the savings, but still coming out ahead by far.

Has anyone tried this?

BigKutta

What is the purpose of this unless you are getting a stellar rate for one pay (like 0.5% versus 2.5%)? And even still....

jetsfan101

Did you read what my post?

5% reduction on sales tax. So on a $60,000 car, that's $3000 savings in taxes alone

In Texas, we have to pay sales tax on price of whole car, even on leases.

scotstern

I did a one pay lease on a Lexus and what a mistake. You have no financial choice but to keep the car until the completion of the lease as they have your money and there is no incentive for them to get you out of the lease early. No, been there and done that in California and...... never again!

jetsfan101

Not like you have much freedom to do anything during the lease anyway. Some manufacturers will let you switch cars 6 months before lease end if you end up going with same manufacturer. I would hardly call that freedom. A lease is a jail sentence plain and simple that's why one should always really like the car they lease

Brimstone

I had a friend get out of a lease with some website like this: Get out of a car lease, Lease termination early, How to get out of a lease, transfer and break lease - LeaseTrader.com (I don't remember what one he used but basically I think he just found someone who wanted his vehicle and would finish out his lease - i only looked at the splash page for a minute, so i know very little, I'm just making the point there are ways to get out of a lease)

The same family I think jumped from a Q5 to an X5 and when that happened the BMW dealer bought out like 6 months (maybe more?) of their Q5's lease. (kind of like how phone/cable companies will buy out contracts to get you to switch).

Just making the point if you look around there are ways to break a lease and minimize loss (if not making out).

To the original post, you can probably do that with a personal loan, but that's probably going to have a much higher interest rate than an auto loan I do not believe you could get an auto loan for this process since you don't own the vehicle I don't think the bank would use it as collateral. If you have a home equity line of credit or something that would probably be the best way to achieve this because your home equity is your collateral as far as the bank is concerned so you can spend you money on anything. Interest rates are probably comparable (although slightly more) to auto rates but you can write off the interest on your taxes. But it depends heavily on the LoC terms and overall equity.

SCarGuy

It would obviously be a personal loan/line of credit, not tied to a specific transaction since there is no asset for them to secure. Has anyone done it? Probably. Common? Not at all. My one pay lease clients are those that tend to be self employed and need a lump sum write off

jetsfan101

The leasetrader type sites will get you out of the lease but you will still be on the hook if those people don't make their payments. No thanks lol

As far as financing the one pay lease goes, that's a good point on the type of loan. Will be personal loan and will be high on apr, therefore negating a good portion some of the incentive.

There is another thread going around on the MSRP % discount here, where someone said they once LEASED a car through a 3rd party bank, not Audi financial, and got a significantly better monthly payment. I didn't even know this was possible. How do these banks even determine money factor and residual ?

SCarGuy

They set it themselves. Problem is, wait till it's lease turn in time. Not at all a smooth process (I've done it twice, I won't do it again). Plus, no incentives (if you would qualify for any), no pull ahead, etc etc

I suppose you could do a home equity LOC, which would keep the rate super modest, but then you're tying up a credit line on a (hopefully) appreciating asset for the sake of a car?

I did a one pay lease once, because it was to my advantage. Unfortunately like you said, some states do make you pay tax on the whole vehicle, even though you're not buying it smh

jetsfan101

Tell me about it. Total BS. That's the price we pay for not having state income tax