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      11-26-2009, 06:58 PM   #1
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What's up with Audi pricing?

My lease is about to end and I was considering an Audi until i saw the lease prices. The A4 premium plus lease is around 500 a month! for that much you can get a nicely loaded 335i coupe or an almost fully loaded 328i sedan. Anyone tried talking the prices down? The MSRP is a lot lower compared to the BMWs but their lease is way more.
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      11-26-2009, 07:18 PM   #2
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I felt the same thing a while back when I was looking through their lease numbers. Their rates are ridiculously high.
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      11-26-2009, 08:20 PM   #3
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Bryan,

Your thread title questions Audi's pricing, but your message questioned their lease rates. Audi's pricing is in-line with BMW and in some cases better when comparing equally equipped/performing cars. The real issue is (as your message states) is that Audi's lease deals are no where near as attractive as BMW's. There is no question they are not.

With that, many think Audi's rates are much more in-line with the market than BMW's are. As a matter of fact, I bet BMW believes this as well. The word I got was that BMW wrote off several hundred million dollars worth of loses due to subvented lease rates. Now please know that I am not "in the business". I'm just a working class car guy who likes to get the car that I most crave for as little as possible. With that, it is not healthy for a company to have a strategy where they try to place everyone in a $40k car for $500/mo. In order to do that they either have to use unrealistic residuals or give cheap financing (MF), BMW chose the former. The long term math simply doesn't work out (see above writeoff). They have also since adjusted their rates slightly (earlier this year). Audi's rates used to be better, not as good as BMW, but better than they are right now. This happened around Aug-Sept '08.

For example, the residual on my wife's '07 X3 is 65%. That is absolutely ridiculous and no where in-line with the market. Her $45k X3 is right now worth about $26k and will be worth about 15% less by turn in. THey will probably offer it to the dealership at auction price. Contrast that with my '09 TT's residual of 51%. I got the car for less than invoice and the MF was low, so it worked out for me.

Leasing is still great for the person who like a new car every few years and understands leasing. The market has definitely changed and the old "if you can't afford it, you can afford it" comment now applies as it did prior to a few years ago.

My advice would be to either buy and finance a new B8 (Audi platform speak, like E90/92) A4 or look for a "lightly loved" one. You should also look at the new S4. It's a sweet package. Personally, if I were in the market, I would look at a preowned E90/92 M3. It looks like there are some great deals on those cars right now.

Regards,
John

Last edited by NC Audi; 11-26-2009 at 09:31 PM.
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      11-26-2009, 08:31 PM   #4
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^^So TRUE!

The Premium Plus Audi A4 is equal to the 328 + ZSP + ZPP + Cold Package...
Can you really lease that 328 for less than $500.
Audi lease programs do "suck" (or Bimmer ones are favorable...), but the Pricing of the Audis is right where it should be...
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      11-26-2009, 09:37 PM   #5
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dr325i,

While I haven't looked closely at the 3 series rates over the past 6 or so months, I would be will to bet you could get into a leftover '09 for an eyepoppingly small amount.

Right now would be a great time to walk into an '07 335i, as I'm sure the lease turn-ins are all over the lot.

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      11-26-2009, 10:19 PM   #6
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CPO pricing of a 2007 X3 is around 32k. The original msrp of 45k @ 65% residual is 29,250. So I would say the residual are correct. BMW has a killer CPO preowned market share...much greater than Audi. My 2007 335i Has a residual of about 26K and that is right in line with the market. Bmw has lowered the residuals of cars recently but that has to do with the overall economy. The great lease pricing of BMW's is directly related to the strong BMW CPO market. Whens the last time you saw a Pre-Owned Audi ad?

A BMW car that is leased for 3 years...then turned in and then sold as a CPO with financing will make thousands more for BMW then if the same car was bought new and financed. CPO's are a cash cow for BMW and especially for dealers. In order to have a fresh constant supply of relatively low milage late model cars you have to have a steady return of off lease cars.
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      11-26-2009, 10:40 PM   #7
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Cookiemonster, (my favorite SS character)

I would agree that the residuals are typically higher on a BMW. With that, you can't successfully promote the argument that BMW's plan has worked out all that well. You don't write off that kind of coin, then raise your arms in victory.

The problem with your #'s below is that my wife still has a year left on her lease. I don't see how they will be anywhere near the residual when it comes time for turn-in, especially given the cost to CPO. Black book currently lists the car for around $26K. Even today, no way an informed shopper would pay $32k for it. I get the "sucker for every seat" deal, but more people are informed car buyers these days. That's not to say emotion isn't front and center when buying a car, but still...

By the way, I have seen quite a few Audi CPO ad's. As an Audi owner, perhaps they just catch my eye.

Regards,
John
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      11-26-2009, 10:47 PM   #8
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Bryan,

You're right, that is THEIR problem. The issue is that it hurts the company that makes the cars you like to drive and spend your free time talking about on internet forums. It's simply not good business.

Regarding historical residual values. I think the investment warning "past performance is not necessarily indicative of future results" should be inserted.

Regards,
John
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      11-26-2009, 10:52 PM   #9
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Audi's pricing sucks and their cars depreciate like stones.

Nice cars, though.

/thread
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      11-26-2009, 11:03 PM   #10
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FStop7,

I love my wife's car and I love the E9x M3 and would absolutely consider one as my next DD, but are you saying you E90 M3 has really held it's value? Aren't these things being auctioned in the very low $40's?

I know this is a BMW board and I love the brand, but I would expect car guys to be a little more objective.

Audi lease rates are no where near as good as BMW rates. I was just trying to provide a possible reason as to why.

Regards,
John
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      11-26-2009, 11:25 PM   #11
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Quote:
Originally Posted by FStop7 View Post
Audi's pricing sucks and their cars depreciate like stones.
For lease deals, yes.
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      11-27-2009, 12:01 AM   #12
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Bryan,

I agree about not considering an Audi lease based on their current #'s. Personally, I couldn't bring myself to buy a one new either, I'd just wait for a year or so as I like a new car every few years and want to lop off as much of the new price as possible. Same with the E9x M3. It's not just what you can afford, but what your willing to afford, right?

Regarding the auction prices, obviously there is a cushion. It's just that impression I'm getting is you guys seem to think that the difference b/w these unrealistic residuals and the market is just magically gobbled up somewhere and no one is worse for it. Given the huge loss, that is not true. When companies lose $ with a program, the consumer will always end up making up the difference.

Of course, you're right. People won't care as long as it's not them...this time. Reminds me of various other plans and programs being thrown around in our country/world these days. But hey "I got mine" right? Discussion for another time and forum.

Regards,
John
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      11-27-2009, 10:28 AM   #13
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it just shows that Audi actually "knows" their cars have horrible resell value..:/ nothing new there.
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      11-27-2009, 02:52 PM   #14
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Quote:
Originally Posted by bubbletea 4 me View Post
it just shows that Audi actually "knows" their cars have horrible resell value..:/ nothing new there.
No they just place a realistic residual value instead of inflating it like BMW does. Honestly do you really think your BMW is worth the residual value established by BMW? BMW relies on their lease program as most of their cars are leased.
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      11-27-2009, 05:07 PM   #15
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Audi's pricing is generally more competetive...

Borrowing a car is a different story. Try a private bank?

The idea of leasing doesn't make sense to me though, I can't see why someone would do it unless they wanted to drive a car they couldn't afford. You pay monthly to use something you don't own, ans have nothing to show for it at the end... Financing or buying just makes much more sense IMHO.
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      11-27-2009, 05:18 PM   #16
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Quote:
Originally Posted by E82tt6 View Post
Audi's pricing is generally more competetive...

Borrowing a car is a different story. Try a private bank?

The idea of leasing doesn't make sense to me though, I can't see why someone would do it unless they wanted to drive a car they couldn't afford. You pay monthly to use something you don't own, ans have nothing to show for it at the end... Financing or buying just makes much more sense IMHO.
It makes a whole lot of sense to me if it were a daily driver / winter car. I won't have to care about resale value at the end. There is no worries for dings / scratches when I go out to eat with the wife. There is no worries of driving in the winter with all the road salts / pot holes on the road. I don't even care if the soccer mom next lane across is beating her kids up, putting on make up, and eating breakfast at the same time, all the while trying to maintain control of her 1 ton SUV.
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      11-27-2009, 06:22 PM   #17
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Quote:
Originally Posted by FStop7 View Post
Audi's pricing sucks and their cars depreciate like stones.

Nice cars, though.

/thread
Interesting, just wait till it's time to sell your car and you will find out how "greatly" Bimmers keep their value... I was unpleasently surprised with the numbers when I sold mine last month...

2 or 3% difference is a joke after 5 years...especially considering that I saved more than that buying a new car...
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      11-27-2009, 07:08 PM   #18
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Not to go into "Captain Lease" mode but I'll take a crack at the benefits to ME of leasing. It works for ME because I like a new car every few years, I know how many miles I drive a year and I take very good care of my cars. Why would I not want to drive the same car (that I can afford either way) and pay a few hundred dollars less/mo?

Above all, I understand how leasing works. Most of the horror stories you hear involve people getting into something they do not understand. They just wanted a car they could not afford otherwise and WHAM, they got caught.

Regarding the "you have nothing to show for it" argument, I do not wish to own expensive things that depreciate. Most people buy cars on 5 or 6 year car notes, then trade them in 3 1/2-4 years, they didn't own it either. They just took it in the shorts over the residual value vs. the remaining portion of the loan. I'll just enjoy it for a while and give it back. Wash...rinse...repeat. Given my love of cars, I have come to terms with always having a car payment.

Now I'm off to the BMW store to see if I can find that kool-aid some of you have been drinking. They must have been out of it when we picked up ours. Shouldn't they have at least offered us a rain check?

Regards,
John
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      11-27-2009, 07:45 PM   #19
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Quote:
Originally Posted by E82tt6 View Post
Audi's pricing is generally more competetive...

Borrowing a car is a different story. Try a private bank?

The idea of leasing doesn't make sense to me though, I can't see why someone would do it unless they wanted to drive a car they couldn't afford. You pay monthly to use something you don't own, ans have nothing to show for it at the end... Financing or buying just makes much more sense IMHO.
You're not paying nearly as much into it though.

Lease depreciating assets, buy appreciating assets. I completely agree with the post above this one. I think it's true a lot of people walk into the dealer with a < $400/mo budget and get talked into a lease. That's bad, and ultimately their own fault for not knowing how something works before signing the papers. By the same token, buying out a lease almost never makes sense either.

Knowing how leasing works and understanding the concept is different though. Granted, it's not for everyone - if you can't stay within the mileage allotments (drive well under 10k or well over 15k per year), want the flexibility of modding your ride, or plan on absolutely keeping the car for long after it's paid off, financing is the best option. If you don't want to dive into modding, can stay within the mileage, and want a new car every few years, why not lease. It's less out of pocket cost, and you can switch it up every few years.

Again, just my opinion. Not trying to force it upon anyone - everyone's thinking and financial situation is different.
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      11-27-2009, 07:55 PM   #20
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jopa,

Only mod I won't recoup $ on is the stg 2 tune, everything else will be pulled and sold. My stuff is just OEM +, nothing crazy. Crazy mods and leased cars = oil + water.

Regards,
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      11-27-2009, 08:49 PM   #21
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Quote:
Originally Posted by dr325i View Post
^^So TRUE!

The Premium Plus Audi A4 is equal to the 328 + ZSP + ZPP + Cold Package...
Can you really lease that 328 for less than $500.
Audi lease programs do "suck" (or Bimmer ones are favorable...), but the Pricing of the Audis is right where it should be...

This is not true, a fully loaded 328 sedan minus a sport package cost more than an A4 premium plus fully loaded minus the sport package. If you dont care about the feel and drive of a BMW, the Audi will give you more for your bucks in their packages. With that said, I'm still glad I picked my 328 over an A4
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      11-27-2009, 09:33 PM   #22
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Quote:
Originally Posted by E82tt6 View Post
Audi's pricing is generally more competetive...

Borrowing a car is a different story. Try a private bank?

The idea of leasing doesn't make sense to me though, I can't see why someone would do it unless they wanted to drive a car they couldn't afford. You pay monthly to use something you don't own, ans have nothing to show for it at the end... Financing or buying just makes much more sense IMHO.
Why would you want to buy something that depreciates in value more than 50% in a few years. Think of it as a house. If you knew that the $500,000 house you bought was going to be worth $250,000 in 5 years, would you still buy it and make such high payments or would you pay rent and live a lot more conformably.

To me leasing is the smarter choice since you get to drive a new car every few years and pay considerably less than buying. Obviously you don't keep the car at the end, but most people sell their cars with payments still remaining so why not pay less. Now with that said, if you're an absolute car nut and must tune all your cars, then buying would be a better choice since you're gonna spend so much money on it.
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