Learn me on financing a car at lease end

[Zone Read 299]

In late 2017 I leased a new Audi S3.  Kind of a midlife-crisis sports sedan since my twins were going off to UT and I was becoming an empty-nester.  Figured I'd go 42 months and then get another one, so a lease seemed to make sense.  

Fast forward to 2020.  My lease is up in 7 months.  I absolutely love the car and probably want to keep it for a while longer.  I have a year left on the warranty, so maintenance is not an issue for a while and I can always go extended warranty later.  I'm way under the mileage allowance and the car is in excellent condition.  

If I choose to pay it off, the amount I'd pay is around $5000 less than the trade-in value, and probably a larger amount difference if done by private sale.  So I can definitely recover some nice equity in the car.  

In addition, S3s are nowhere to be found. Audi probably isn't going to make them for a while which means I won't be able to find one to replace it and the demand for a used one is greater for when I sell.  Again, I love this car.  It drives great, fast as hell and I love the fact that pretty much nobody else has one.

What am I looking at as far as loans?  Is this considered a used car loan or is there a specific product for this that I can't seem to find online since I'm not sure what it would be called?  Any recommendations for lending institutions with good interest rates on a 2017 car loan?

Edited August 7, 2020 by Zone Read
typo

[Randolph Duke 4034]

3 hours ago, Zone Read said:

In late 2017 I leased a new Audi S3.  Kind of a midlife-crisis sports sedan since my twins were going off to UT and I was becoming an empty-nester.  Figured I'd go 42 months and then get another one, so a lease seemed to make sense.  

Fast forward to 2020.  My lease is up in 7 months.  I absolutely love the car and probably want to keep it for a while longer.  I have a year left on the warranty, so maintenance is not an issue for a while and I can always go extended warranty later.  I'm way under the mileage allowance and the car is in excellent condition.  

If I choose to pay it off, the amount I'd pay is around $5000 less than the trade-in value, and probably a larger amount difference if done by private sale.  So I can definitely recover some nice equity in the car.  

In addition, S3s are nowhere to be found. Audi probably isn't going to make them for a while which means I won't be able to find one to replace it and the demand for a used one is greater for when I sell.  Again, I love this car.  It drives great, fast as hell and I love the fact that pretty much nobody else has one.

What am I looking at as far as loans?  Is this considered a used car loan or is there a specific product for this that I can't seem to find online since I'm not sure what it would be called?  Any recommendations for lending institutions with good interest rates on a 2017 car loan?

Not to get personal, but do you have a financial advisor? Do you have a banker you work with? 

 

[Zone Read 299]

2 minutes ago, Randolph Duke said:

Not to get personal, but do you have a financial advisor? Do you have a banker you work with? 

 

Nope.  No banker or financial advisor.

[Randolph Duke 4034]

2 hours ago, Zone Read said:

Nope.  No banker or financial advisor.

Walk into whatever branch bank has your account ant explain your situation. A 50k line of credit secured by your assets isn’t really a big ask. It’s just pricing. 

Walk into your bank, tell them your situation, and report back. 

[Zone Read 299]

Walk into whatever branch bank has your account ant explain your situation. A 50k line of credit secured by your assets isn’t really a big ask. It’s just pricing. 
Walk into your bank, tell them your situation, and report back. 

I appreciate the answer. I guess I should clarify, I’ve got an excellent credit score and I’m not poor. I’m just looking to find the best interest rate because I’m a cheapskate.


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[Brew 3049]

Credit unions are your best bet.

[William_Cannon 86]

Credit unions are your best bet.

This.

Also interest rates in general are low right now so financing a used car doesn’t cost nearly as much as it used to.

[Gil Bang 26060]

Credit unions are your best bet.

Got 1.9 on a CPO Mercedes, and that was 3 years ago.

[elfenix 34344]

we talking 5 cylinder turbo S3?

[Nice Guy Eddie 13529]

You don’t seem to want this advice but understand that an out-of-warranty German luxury cars can get expensive with maintenance and repairs. There is a reason they depreciate heavily heading past their warranty end date. Few people, especially educated buyers, want them.

After becoming a frequent customer of a German auto mechanic (heights autohaus Houston), I promised myself never to own an out of warranty German car again. The frequency of repairs became a mental and financial drain.  And the car was paid off so it made the repairs a bit easier to accept but it still sucked knowing a $1500 repair could drop any week.

go lease another new Audi even if it’s a different model. You’ll be happier with the new features and functions.

 

[Nice Guy Eddie 13529]

FYI, Houston area dealers have six new 2020 S3s right now.

[CooterBrown 18035]

Is it true that the used car market has completely cratered? If so, maybe you could negotiate an even better price than what’s in the lease terms.

[Randolph Duke 4034]

9 hours ago, Zone Read said:

I appreciate the answer. I guess I should clarify, I’ve got an excellent credit score and I’m not poor. I’m just looking to find the best interest rate because I’m a cheapskate.


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The key to being a cheapskate is knowing when to turn it on and when to turn it off. THere is a difference between cost and value.

I'm not sure how much this car is, but even at 30k, 100 basis points is $25/ month. The banker on the other end of the phone is trying to run a business. A really, tough, shitty business dealing with people who buy expensive German sports cars that depreciate tens of thousands of dollars the second they are driven off the lot, but still lose sleep over $25/month in financing costs.

If you don't have a relationship with a credit union, get one. They are perfect for smaller stuff because the distance between your phone and the ultimate decision maker on the lending side is the shortest. Cars are the credit union's wheelhouse. The same for bridge loans for your kid's tuition payment, etc. Pretty much anything between $5k and about $75k.

Banks are a fucking pain in the ass, mostly because they usually only hire brain dead functionaries who are willing to put up with people who buy expensive German sports cars that depreciate tens of thousands of dollars the second they are driven off the lot, but still lose sleep over $25/month in financing costs. Banks are your go-to for anything between about $5k and $200k.

We are in a low interest rate environment, so if you are really a cheapskate, play the long game and throw around some money when money is cheap. There is no goddamned way in Hell that we can pump $10 trillion into the economy in less than a year without massive repercussions. Having a good relationship with a banker could pay big dividends in the near future.

So, even if they fuck you dry and hard, you are probably talking less than $25/mo and both of you will know the truth of the deal before they even wire the money.

Personally, I am sending my deposits to the credit union, and any loan business to my banker.

My advice is to pick one - your bank or your credit union. Don't even mention interest rate. If they mention a rate, say "No problem." While you are there, mention you need to get something in place for next time a similar situation comes up.

 

[Brew 3049]

46 minutes ago, CooterBrown said:

Is it true that the used car market has completely cratered? If so, maybe you could negotiate an even better price than what’s in the lease terms.

May be market dependent, but where I am it is sky high. There is very little new inventory available, so no trade ins are taking place to restock the used lots. Fewer trade ins mean fewer going to the wholesale/auction block to restock the used only lots. Just traded a 2017 F150 with 65k miles and a busted rear end and got $36k for it. They had it sold within days.

[torre 1286]

4 hours ago, Nice Guy Eddie said:

You don’t seem to want this advice but understand that an out-of-warranty German luxury cars can get expensive with maintenance and repairs. There is a reason they depreciate heavily heading past their warranty end date. Few people, especially educated buyers, want them.

After becoming a frequent customer of a German auto mechanic (heights autohaus Houston), I promised myself never to own an out of warranty German car again. The frequency of repairs became a mental and financial drain.  And the car was paid off so it made the repairs a bit easier to accept but it still sucked knowing a $1500 repair could drop any week.

go lease another new Audi even if it’s a different model. You’ll be happier with the new features and functions.

 

Listen to Eddie !

[Dbeasy 15138]

You don’t seem to want this advice but understand that an out-of-warranty German luxury cars can get expensive with maintenance and repairs. There is a reason they depreciate heavily heading past their warranty end date. Few people, especially educated buyers, want them.
After becoming a frequent customer of a German auto mechanic (heights autohaus Houston), I promised myself never to own an out of warranty German car again. The frequency of repairs became a mental and financial drain.  And the car was paid off so it made the repairs a bit easier to accept but it still sucked knowing a $1500 repair could drop any week.
go lease another new Audi even if it’s a different model. You’ll be happier with the new features and functions.
 

Consumer reports shows BMW with massive repair costs as compared to other brands, except Mercedes. Scary big numbers.

[Zone Read 299]

10 hours ago, elfenix said:

we talking 5 cylinder turbo S3?

No, that's the RS3.  That's a fast beast, I'd probably kill myself in that.

[Zone Read 299]

5 hours ago, Nice Guy Eddie said:

You don’t seem to want this advice but understand that an out-of-warranty German luxury cars can get expensive with maintenance and repairs. There is a reason they depreciate heavily heading past their warranty end date. Few people, especially educated buyers, want them.

After becoming a frequent customer of a German auto mechanic (heights autohaus Houston), I promised myself never to own an out of warranty German car again. The frequency of repairs became a mental and financial drain.  And the car was paid off so it made the repairs a bit easier to accept but it still sucked knowing a $1500 repair could drop any week.

go lease another new Audi even if it’s a different model. You’ll be happier with the new features and functions.

 

Completely understand this.  My warranty goes a year past lease close and I can always extend it.  I know that educated buyers don't usually keep these but I truly enjoy driving the car.

[Zone Read 299]

I pretty much knew credit unions were the way to go, I'm seeing Penfed offering 2.99 right now for used car loans.  I thought they could treat this like a refinance but I guess because it's a 2017 they consider it a used car loan.  I've financed plenty of cars before, I usually just take the 1.9% offers from the dealership (I know they just find another way to screw me and make the money back they lose on that low interest rate).  I've just never wanted to keep a lease before and didn't know if there were better ways to do it.  I appreciate all the answers.

[Brew 3049]

18 minutes ago, Zone Read said:

I pretty much knew credit unions were the way to go, I'm seeing Penfed offering 2.99 right now for used car loans.  I thought they could treat this like a refinance but I guess because it's a 2017 they consider it a used car loan.  I've financed plenty of cars before, I usually just take the 1.9% offers from the dealership (I know they just find another way to screw me and make the money back they lose on that low interest rate).  I've just never wanted to keep a lease before and didn't know if there were better ways to do it.  I appreciate all the answers.

It is a used vehicle purchase from the leasing company ultimately. It has to be titled and registered like buying from a lot. I would get pricing from a credit union or bank to quote a rate and then call the dealership and see what they can do on used financing. They may be able to get you a better rate on the secondary market and handle some of the hassle.

[elfenix 34344]

2 hours ago, Zone Read said:

No, that's the RS3.  That's a fast beast, I'd probably kill myself in that.

ah my mistake

[Lobwedgephil 1139]

14 hours ago, CooterBrown said:

Is it true that the used car market has completely cratered? If so, maybe you could negotiate an even better price than what’s in the lease terms.

Pretty sure it is the other way around, they can't get enough used cars right now. 

[CooterBrown 18035]

Pretty sure it is the other way around, they can't get enough used cars right now. 

Weird. I’d read a couple of months ago that used car prices had cratered due to too much inventory. Maybe it’s turned around since then.

[KYHorn 17212]

On 8/8/2020 at 11:57 PM, CooterBrown said:

Weird. I’d read a couple of months ago that used car prices had cratered due to too much inventory. Maybe it’s turned around since then.

Used prices were really low a couple months ago but have shot back up. Hoping Hertz flooding the market will help

[Chewbacca 7787]

On 8/8/2020 at 7:02 AM, CooterBrown said:

Is it true that the used car market has completely cratered? If so, maybe you could negotiate an even better price than what’s in the lease terms.

Nope.  Used car market is hot, at least for what I'm looking for.

[bschoolprof 6273]

Prepare to get fucked with sales taxes if in Texas iirc. You pay twice: once at lease inception (lessor/buyer actually pays but passes it on to you), and all over again when you buy the car from the lessor.

[ChickenSandwich 9856]

On 8/8/2020 at 11:44 AM, Zone Read said:

I pretty much knew credit unions were the way to go, I'm seeing Penfed offering 2.99 right now for used car loans.  I thought they could treat this like a refinance but I guess because it's a 2017 they consider it a used car loan.  I've financed plenty of cars before, I usually just take the 1.9% offers from the dealership (I know they just find another way to screw me and make the money back they lose on that low interest rate).  I've just never wanted to keep a lease before and didn't know if there were better ways to do it.  I appreciate all the answers.

Austin Telco has 2.29