Good deal?

[JoulesThief]

Not negotiating at all would be walking on to the lot with your checkbook and writing a check for MSRP and driving away. Explaining a set of factors to a seller why they should sell to you at a lower than asking price and the seller responding with a new asking price is "negotiating."

It's much easier when you are retired and have frequent flyer miles. I never haggle or negotiate with VW, the internet is my friend.

 

[forbin404]

Not sure but sunnyvale VW is doing it for about 8k OTD
From ev-vin

Sunnyvale VW
(SE)
$47/mo + tax
$4620+ tax, lic drive-off
3-year total:
$6265 + tax, lic
7.5K miles/year
$0.28+/mi*
Updated 7/8/16
Expires 7/31/16

 

[Sphinx]

I keep seeing these deals with $$ down, much less $8K down and I go "WTF?" Folks, you should NEVER put money down on a lease - ever. If I had $8K cash for a down payment, I'm probably better off buying an $8K car and having no payments. If you refuse to listen to those who know better, the most you should ever put down on a lease are tax, tag and title fees in states where the taxes are not rolled into the payment. It's ok to make the 1st months payment at delivery - that's not a big deal.

For those who remember, GM used to have a lease product where people would pre-pay the lease. That product died a quick death when people realized it didnt' make sense.

Please understand that the low payment with the huge down payment is just a teaser. That's the only way they can advertise the car with such a low payment. Keep your cash, take the higher payment, and overtime, at least you have your liquidity. On cash flow basis, you might even be better off. Don't be a tease, get out your calculator, and run the numbers.

If you have a wreck in during the lease period, it is extremely unlikely that you'll be able to recover any of your down payment, especially given how fast the less expensive EV's are depreciating.

 

[cctop]

I keep seeing these deals with $$ down, much less $8K down and I go "WTF?" Folks, you should NEVER put money down on a lease - ever....

If you have a wreck in during the lease period, it is extremely unlikely that you'll be able to recover any of your down payment, especially given how fast the less expensive EV's are depreciating.

As far as I understand, the only reason not to pay money up front for a lease is that you lose it if the car gets totaled.

But the more you pay up front, the less you borrow, so you save money over the course of the lease.

In my case by putting $4500 down I saved a few hundred dollars off the total cost.

I decided to take the risk. I can understand other people making a different decision, but it's a bit strong to say that putting money down up front never makes sense.

 

[bizzle]

It's not just totaling the car, you also lose $5K in investment funds and the payments are the same whether you pay $4500 w/ $75/month payment or $0 w/ $200 dollar a month payments. It's an even worse "deal" for those of us qualifying for top tier financing. I had a finance rate that was effectively 0%. My rent charge for the lease was $11 dollars but I've read here that some dealers were stuffing that section with profit.

 

[johnnylingo]

But the more you pay up front, the less you borrow, so you save money over the course of the lease.

Exactly. But with interest rates so low, you're only saving a couple hundred bucks, as you mention. Even with a "worse case" stock market, one should be able to recoup that and then some over the next 2-3 years.

This is probably part of the reason they're pushing for high down payments - there's not a lot of money to be made from financing, so they'd rather take the ca$h and lower the chance of having to repo later on.

 

[cctop]

But the more you pay up front, the less you borrow, so you save money over the course of the lease.

Exactly. But with interest rates so low, you're only saving a couple hundred bucks, as you mention. Even with a "worse case" stock market, one should be able to recoup that and then some over the next 2-3 years.

I would likely have had that few thousand sitting in a savings account earning 0.1% interest rather than invested in the market.

So for me it was a decision to save some hundreds of dollars in interest over the course of the lease at the risk of losing the entire down payment if the car were totaled.

I decided to play the odds. I can see why other people would make a different choice. But I think the advice to NEVER EVER EVER put money up front on a lease is an exaggeration. I'd say to run the numbers both ways and make an educated decision what works best for you.

 

[bizzle]

Using a bad financial decision as a justification to place a large down payment on a lease is not convincing. I could also say you better put down a large deposit because you might go gamble it away or you might buy Beanie Babies with the money otherwise.

All of those are equally nonsensical decisions when you have a fixed payment schedule. The least you could do would be to buy a short term CD and you'd break even without any of the risk of putting a large amount of non-refundable money into something you have no ownership over. That said, these examples would only hold true for someone with a poor credit rating. You could much better things with $5K than saving it or wasting it on a lease down payment if you have poor credit.

 

[johnnylingo]

I would likely have had that few thousand sitting in a savings account earning 0.1% interest rather than invested in the market.

Well yeah, I should have said bond, money market, or CD to get 2% interest back. The stock market always carries risk, especially when it's had a 7 year run and it's an election year.

I agree with bizzle's point, but to each his own. Some people don't like having money "burning a hole in their pocket", or prefer a low monthly payment to appear less risky to creditors or simply have peace of mind.