Manufacturer Offers flexibility

[TheKid2]

Does anyone have experience with VW on leasing with a national offer? I haven't started negotiating yet, but wanted to know ahead of time if there's any flex in manufacturer offers. For instance if the offer is lease 36 months for $X with $X out of pocket with X miles, will they work with you to lower the down payment or give extra miles? Could this be credit score dependent? I'm wondering if they will just default to saying you must meet all the fine print otherwise you are leasing from "scratch".

Hope that makes sense.

[sccredit]

I can't speak to VW for leasing but some manufacturers allow the deal to be shifted. That means the down can be less but the payments higher. They can normally adjust the miles, which changes the residual and increases the payment.

[cashorcharge]

Yes....you can amend some of the specifics of the lease.  There are 4 factors that make up that deal:

Vehicle and Trim Level (Sport, Luxury, Economy etc)

Term

Miles per year

Down Payment

If the deal is on a specific trim level, that means they are providing a special Money Factor and Residual for that model...or it may be all Passats...not sure.  If it's all models...then next steps.  If not all models....move to a different model and you're starting from scratch.

If you put more money down...obviously that lowers your monthly payment....and if you put less money down....that MAY disqualify you from the special Money Factor (a lease term finance rate) for that vehicle.  To that same point, if you add more miles...that will reduce your Residual Value Percentage so your payment will go up as the vehicle is worth less at the end of the term.  

As for your score....those deals also include a "for well qualified buyers" so if you don't meet that criteria...you wouldn't even be eligible for that offer.  If you ARE qualified for that offer....then while you will get approved...the aforementioned factors would come into play.  The dealership can tell you what percentage the residual value will change if you go from 10,000 miles per year to 12,000 or up.    They can also tell you (though they may be reluctant) the Money Factor for your lease.  It will be a number like .00345  To calculate your APR, take that number and multiple by 2400.  Example: .00345 x 2400 = 8% APR 

[TheKid2]

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@cashorcharge wrote:

Yes....you can amend some of the specifics of the lease.  There are 4 factors that make up that deal:

Vehicle and Trim Level (Sport, Luxury, Economy etc)

Term

Miles per year

Down Payment

If the deal is on a specific trim level, that means they are providing a special Money Factor and Residual for that model...or it may be all Passats...not sure.  If it's all models...then next steps.  If not all models....move to a different model and you're starting from scratch.

If you put more money down...obviously that lowers your monthly payment....and if you put less money down....that MAY disqualify you from the special Money Factor (a lease term finance rate) for that vehicle.  To that same point, if you add more miles...that will reduce your Residual Value Percentage so your payment will go up as the vehicle is worth less at the end of the term.  

As for your score....those deals also include a "for well qualified buyers" so if you don't meet that criteria...you wouldn't even be eligible for that offer.  If you ARE qualified for that offer....then while you will get approved...the aforementioned factors would come into play.  The dealership can tell you what percentage the residual value will change if you go from 10,000 miles per year to 12,000 or up.    They can also tell you (though they may be reluctant) the Money Factor for your lease.  It will be a number like .00345  To calculate your APR, take that number and multiple by 2400.  Example: .00345 x 2400 = 8% APR 

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Thanks @cashorcharge 

I'm shopping online and many "yes" to your assumptions. One offer from VW that caught my eye is on an Atlas and they call a specific trim level for a "low mileage lease" with $5k due at signing. It assumes a MSRP with cap cost reduction from the dealer.  Problem is 22,500 miles on a 3 year lease is super low and buying down the lease with that much money is a tough pill. I'd rather pay extra for 30,000 miles and much less down. If I run similar scenarios on Edmunds lease calculator without the manufacturer offer I'd be looking about $600 per month on the lease. Seems the offer gets special MF and residual for the dealer from VW directly based on your comments.

Based on some research it seems that "highly qualified" for VW is 700+ on a TU FICO 8 Auto. That could be wrong, though.

[cashorcharge]

7500 miles per year over a 3 year term is typically the Highest Residual and Lowest Money Factor so that explains the low payment.  If you will absolutely drive more and intend on keeping the vehicle the full 3 years...you'll get hit with X per mile (could 20 cents to 30 cents) so that wouldn't pencil out.  If you don't intend on keeping it the full term...say, trading it in on month 30 versus waiting until 36...that would negate you from paying those cents per mile..but would assume the payoff at that time is lower than what the car is actually worth so you could trade it in and break even or make a few bucks.  Years ago, this was way more prevelant...nowadays with APR's so high...it's not as common.

Going from 7500 to 10K or 12K will absolutely adjust that residual and payment.

If you go to the Edmunds Forums....you can search to see what others have requested for the residual and money factor for the car in question.  If you don't see it....create a free account and post the question.  Their moderator usually responds within 24 hours and can show you the difference in those factors and residuals.

https://forums.edmunds.com/

[IsambardPrince]

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@TheKid2 wrote:

Does anyone have experience with VW on leasing with a national offer? I haven't started negotiating yet, but wanted to know ahead of time if there's any flex in manufacturer offers. For instance if the offer is lease 36 months for $X with $X out of pocket with X miles, will they work with you to lower the down payment or give extra miles? Could this be credit score dependent? I'm wondering if they will just default to saying you must meet all the fine print otherwise you are leasing from "scratch".

Hope that makes sense.

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My ex, Tim, had a 2009 VW Jetta that he lost because it was so unreliable as a new car that they ended up taking it from him when he couldn't afford the payments and to keep fixing it. One time he rolled the window down and it sprayed him with something blue.

He ended up driving his grandfather's '98 Mercury Grand Marquis which was a much better car.

My mom had a 1978 VW Rabbit. It drank oil, mixed the oil with gasoline, overflowed the oil cap with gasoline and oil, and caught fire.

VW is a terrible company.

If you want one, lease it. You'll lose money but not THAT much money.

There's a loan, where you normally lost $10,000 or more to the bank that's not a car, then lose half the value of the car.

Then there's a lease, and that's where you pay for about 60 or 70% of the car and then they take the car back and you have to start all over.

Consumer Reports says the lease is the worse of the two.

If you look at the effective rate on a car lease if you use the option to buy, you get an effective rate of about 14.2% APR.

Which is why BMW and Mercedes love these things. They're making subprime money off of prime borrowers. The same guy could have gone to the bank and borrowed that money for about 7-8% right now.

82% of millionaires say they've never had a car loan or a car lease, ever. Even when they were not rich. That's out of over 10,000 millionaires surveyed by Dave Ramsey.

It's not really possible to get a good deal on a new car. According to Carfax in 2021, a new car will lose about 60% of its value over five years.

A car is not an investment or a way to make money, it is a way to lose a small fortune. Some would say a big fortune if they couldn't even afford the down payment, but big fortune, little fortune. It will lose you a fortune. Unless something weird happens like all the supply problems for about a year during COVID. Some people did rather well by turning them in and starting over. But as far as I know, it's the only time that's happened.

That means that a $40,000 vehicle will lose $24,000 of value in five years, but you're paying a bank about $8,000-$9,000 in interest, so you buy a $40,000 car, you'll lose $32,000 or more on it in the end. That's not an investment. It's not a way to make money. It's just math.

You do that every five years, it is not going to lead to prosperity. It's just a constant cash suck.

When someone says they invested in a car, ask them how much they think they'll get out of it in 5 years when they sell it. And then say, "Most of my investments go up." They'll hate you. Hate you.

You can drive a beater car for longer than 5 years. Mom gave me the 2003 Impala in 2020 when I went bankrupt, lost the Kia (0%, still stupid), and it still works. You drive the beater for 5 years and save cash, you can cut the bank out and get a newer used car. There's plenty of two and three year old car fleece turn-ins that someone else lost a bunch of money on. You don't have to be that guy.

The truth is, you're never not underwater on a car loan. You only think there's daylight. You buy a $40,000 car you're going to lose $24,000-$32,000 or so on it through depreciation and bank interest over 5 years.

You can't afford a nice car? Buy a beater and drive it while you save. There's a place to go when you're broke. It's called work.

I bought a 2008 Buick a little while later, and did some work on it, and boy does it run nicely.

My next trick will be getting a 2020s model in cash in a bit. But not just yet. But I didn't have to lose $32,000 in depreciation and bank interest to learn that I can get there by myself, but I can't if I don't try.

You know why car payments hurt so much? The same reason stepping on a Lego block hurts so much. You step on it and all your weight goes into it and it has no give. And it hurts so much more than you ever thought it could and goes on for what feels like forever.

People let the salesman put them in a trance and get them into an $1100 a month payment, then their boss comes in 6 months later and fires everyone and there's no give on the $1100 a month payments. The bank takes the car back and sues you.