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November 20, 2005
Volkswagen's No-Money Down Lease Deals
Through January 3, VW is offering no-money due at signing lease deals on the Jetta and Passat. It looks like a pretty good deal -- you get either car for 39 months at $249 or $299 a month respectively, with a 1,000 mile a month allowance.
Using rough math, the Jetta deal comes close to being a wash -- meaning that if you bought, held and sold the car after 3 years, you get the use of the car at the same price as purchase -- without having the burden of having to sell the car, or financing negative equity.
Here's how I came up with the concept:
-- Total Jetta lease payments of $9,462.
-- Compared to Kelley Blue Book value of a 2003 Jetta as $10,505.
-- Creates a rough total cost of $19,967.
-- A new Jetta lists for $18,515.
-- That's a $1,452 premium, not adjusting for differentials in pricing, inflation rate or anything really complicated.
-- BUT: That's also not taking into account interest payments or potential negative equity.
-- SO: We think it's a good deal for someone who wants to drive a new VW without the psychic burden of ownership. At the end of the lease, just hand 'em the keys.
Of course, it's a little more complicated than this. The best way to figure out if it's best for you is to get a purchase deal on paper, complete with interest rates and monthly payments. Then try to figure out what you'd owe at the end of 3.25 years, and what the trade-in might be ... you get the idea.
And we did mention the no-money down aspect, didn't we?
Posted by Frank at November 20, 2005 9:34 PM | Filed under Auto News
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