Pre-paid lease?
08-11-2003, 04:29 PM
#1
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Pre-paid lease?
I spent some time looking at lease info today, and it looks like AFS is offering a decent deal on pre-paid leases (aka one-payment). For the longer-term leases (i think 36-48 for sure), it knocks .00100 off the rate (so .00155 becomes .00055).
This would save about $3200 over the life of a 39month 15kmile/year lease.
I'm waiting for offical word on AFS's policy on refunding the balance in case of a total loss/theft. Any other questions I should be asking?
This would save about $3200 over the life of a 39month 15kmile/year lease.
I'm waiting for offical word on AFS's policy on refunding the balance in case of a total loss/theft. Any other questions I should be asking?
08-11-2003, 04:57 PM
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Re: Aren't you screwed if something happens to your car? Same principle as not putting a down 4 lea
That's the million dollar question. Another poster
said appears as a credit balance on the lease statement each month and that it would be refunded if there was a total loss.
I'm waiting for a clarification from AFS via my salesperson.
https://forums.audiworld.com/s4b6/msgs/16896.phtml
https://forums.audiworld.com/s4b6/msgs/16913.phtml
said appears as a credit balance on the lease statement each month and that it would be refunded if there was a total loss.
I'm waiting for a clarification from AFS via my salesperson.
https://forums.audiworld.com/s4b6/msgs/16896.phtml
https://forums.audiworld.com/s4b6/msgs/16913.phtml
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08-11-2003, 08:26 PM
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I've asked myself that....
At 3.2% compounded daily (the best 3year cd I can find), I'd make about $2700 on $27,000. I'd be saving $3200 with the prepaid lease. So, is it worth it for $500 more?
08-11-2003, 09:01 PM
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I have pre-paid a lot of leases but never had a car stolen or totaled.
The wording of the lease and New York statute leave the issue a bit ambiguous. GAP problems can arise on straight financing as well. If you take a long term loan and total the car in year 2, you will owe more to the bank than the insurance company will pay you. It is the same as if you pay cash for a car and it gets stolen or you sell after a year: these cars depreciate a lot and short term ownership is expensive. The problem is just highlighted when you don't pay cash and still owe the bank money on a car that was stolen or totaled.
Alan
Alan
08-11-2003, 09:12 PM
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The $2,700 interest is taxable. The $3,200 savings is cash in your pocket.
Plus, you can't put the $27,000 in a 3 year CD since you will be making monthly payments to Audi. The single pay lease reduces my monthly payment a little over 10%.
I can get 6% interest in a tax free municipal bond fund. That still isn't as good as the 10% savings on a pre-paid lease. While I wish the GAP issue were clearly addressed by Audi Financial Services in writing, I feel pretty well protected in New York State. Then again, I am a lawyer so it won't cost me anything to sue them if the car is a total loss and they don't return my credit balance or replace the car under the terms of the lease.
Alan
I can get 6% interest in a tax free municipal bond fund. That still isn't as good as the 10% savings on a pre-paid lease. While I wish the GAP issue were clearly addressed by Audi Financial Services in writing, I feel pretty well protected in New York State. Then again, I am a lawyer so it won't cost me anything to sue them if the car is a total loss and they don't return my credit balance or replace the car under the terms of the lease.
Alan