I have just sold my semi-beloved Pacifica and am in the market for a slightly smaller, much newer, wagon or SUV. I like the look of the new VW Tiguan, and having driven a few of them, I like most everything about them.
So I was taken back a few days ago when I happened on a local VW dealer's website and saw an incredible ad to lease a 2019 Tiguan. (AWD, MSRP about $27k).
$179 per month for 36 months, with $2,000 down. 7,500 miles per year, but that's not important.
For most cars, when you look at a typical three-year lease, the TOTAL OF PAYMENTS (excluding tax) for the three years, you come up with about 50% of the MSRP. That is, add up the 36 payments with the stated down payment, and it's in the neighborhood of one-half the sticker price. THIS AD was for total payments around 37% of the sticker price.
These deals are very rare but they do exist. Sometimes there is a car that is going out of production, or a car that is being re-designed, or an inflated inventory of a particular model. It's rare but it happens.
So I went to the dealership, ad in hand, and said, "Gimme one of these!"
Long story short, they come back with a written quote for $310 per month.
Incredulous, I asked what the fuck is with this? I know that there is a 10% tax on lease payments, but how [the fuck] do you get from $179 a month to $310 a month?
"Taxes and fees and stuff." Among the fees and stuff is a $2,500 "capital cost reduction fee."
In other words, they asked for $2,000 down, but actually needed $4,500 down, so they amortized the other $2,500 into the monthly payment! The exact meaning of the "$179 per month" in the ad was not clear. Certainly it did NOT mean that one could lease the vehicle for one hundred seventy-nine dollars per month.
As we walked out, laughing, my wife asked the salesman how other people react to this scam. He admitted that almost everyone walks out - just like we did.
I felt bad for the guy.
So I was taken back a few days ago when I happened on a local VW dealer's website and saw an incredible ad to lease a 2019 Tiguan. (AWD, MSRP about $27k).
$179 per month for 36 months, with $2,000 down. 7,500 miles per year, but that's not important.
For most cars, when you look at a typical three-year lease, the TOTAL OF PAYMENTS (excluding tax) for the three years, you come up with about 50% of the MSRP. That is, add up the 36 payments with the stated down payment, and it's in the neighborhood of one-half the sticker price. THIS AD was for total payments around 37% of the sticker price.
These deals are very rare but they do exist. Sometimes there is a car that is going out of production, or a car that is being re-designed, or an inflated inventory of a particular model. It's rare but it happens.
So I went to the dealership, ad in hand, and said, "Gimme one of these!"
Long story short, they come back with a written quote for $310 per month.
Incredulous, I asked what the fuck is with this? I know that there is a 10% tax on lease payments, but how [the fuck] do you get from $179 a month to $310 a month?
"Taxes and fees and stuff." Among the fees and stuff is a $2,500 "capital cost reduction fee."
In other words, they asked for $2,000 down, but actually needed $4,500 down, so they amortized the other $2,500 into the monthly payment! The exact meaning of the "$179 per month" in the ad was not clear. Certainly it did NOT mean that one could lease the vehicle for one hundred seventy-nine dollars per month.
As we walked out, laughing, my wife asked the salesman how other people react to this scam. He admitted that almost everyone walks out - just like we did.
I felt bad for the guy.
