Maybe Lease - Your opinion

[cdtotten]

Hey guys,

I wanted to get your opinion on my current situation. I am currently exactly 2 years into a 6 year loan I took out to pay for my Mitsubishi Lancer GTS. The original loan was for $14,000 (now down to $9800) at 6%. My monthly payment is $235.00 and according to the dealer and what I have seen, the trade in value of it would be about $13-14k and the private party would be $16-17k.

I was wondering what you all that about some of the current lease specials like at VW that offer sign then drive with $0 down, no first payment, and really reasonable monthly payments. I have never leased before, so am curious what you all think.

My thought process is if I could get $4-5k in equity out of my current car, and lease a car with no money down, that would give me anywhere between 1-2 years worth of payments in my pocket on a 39 month lease (if VW).

Can anyone share there thoughts? Thanks guys! BTW my EQ fico is 685, mostly due to high util (70%). But I am paying it down quickly and i'm sure my auto-enhanced would be higher if they used it.

Message Edited by cdtotten on 12-17-2009 05:47 AM

[Anonymous]

1- How much do you drive?

2- How secure are you at your current employer/housing that your monthly mileage will not vary much?

[cdtotten]

Well I am an Auditor so I do a fair amount of travelling for my job, but recently have switched firms and now all our clients are located in the city instead of across the region. Despite this travelling, in the past 2 years I put a total of 25k miles on the car. I would estimate my travel will decrease now significantly, so to answer your questions:

1 - Approx 12k miles a year

2 - I started with a new company 4 months ago and it is very stabile and I own my condo I live in and am not moving anytime soon.

[Anonymous]

OK,

1-In leasing you pay mileage in advance, usually in increments of 10.5, 12, 15 etc thousand miles a year.

Your payment is based on the expected resale value of the vehicle when turned in at that mileage or under. If you contract at 12K a year or 36K over 36 months you are usually charged  a rate ( say 20+cents a mile) for every mile over.

if you think "about" 12 K a year you need to know since if you go over 12 it may be cheaper to contract for higher or strive for lower mileage since mileage tier directly influnces monthly payment.

2-Advertised lease prices do not include taxes and fees, and advertise at lowest mileage contractable Your actual monthly payment will be higher then what you hav eseen advertised.

3- Much like renting an apartment you will on turn in be held accountable and charged for any damage done to the car-, both major and minor which inclues dents and dings, cleaning, cigarette burns. (For example Ford offers "wear care" an insurance program purchased at least inception that covers prety much all the accidental and incidental wear and tear damage that you would not turn into insurance so youtruly can "walk away" from the lease without a care. VW may have similar programs)

4-You need to ask if your lease will have a end of lease turn in/termination fee, The turn in fee can be several hundred dollars and needs to be considered as a cost of the transaction. Again Ford leases do not have this fee, but other  Manufacturer finance companies do, most Banks always do.

These are questions to ask when considering leasing.

[cdtotten]

Thank you very much for your great information. It's posts like yours that make me love these forums. Taken from the VW site, were the terms of their current deal:

"

©2009 Volkswagen of America, Inc. *Example lease is intended to explain the offer and may not specifically apply to models featured. Lease example based on a 2010 Jetta S with manual transmission, MSRP $18,355.00 excluding title, taxes, options and dealer fees. Monthly payments total $9,842.00. Requires dealer contribution of $163.35, which could affect final negotiated transaction. Purchase option at lease end for $10,445.25. Lessee responsible for insurance. At lease end, lessee is responsible for $.20/mile over 39,000 miles and excessive wear and tear. Closed end lease offered on approved credit by Volkswagen Credit through participating dealers. Additional charges may apply at lease end. Dealer sets actual prices. See your local Volkswagen dealer or call 1-800-DriveVW for details. U.S. cars only. Supplies limited. Offer ends January 4, 2010. **Offer valid only on new 2010 Volkswagen Jetta, CC or Tiguan models. Excludes Jetta TDI models.

"

So based on those terms, that is 12k miles a year and "excessive wear and tear" is extra. Other than contacting the dealer, where can I find out what is considered "excessive".

[Anonymous]

---

@cdtotten wrote:

So based on those terms, that is 12k miles a year and "excessive wear and tear" is extra. Other than contacting the dealer, where can I find out what is considered "excessive".

---

contact VW