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your financing is probably for new vehicle though and not lease buyouts?
$7,500 on leases are back!
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̶2̶3̶ ̶P̶r̶o̶ ̶S̶ ̶+̶ ̶R̶W̶D̶ ̶A̶r̶c̶t̶i̶c̶ ̶B̶l̶u̶e̶ 23 Pro S RWD Aurora Red Metallic rec 1/28/23
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109 Posts
My dealer couldn't seem to provide a clear answer, at first he said 3 months, then he said as soon as you get the first statement from VW, then he asked me if I found out......naturally I said, well, I figured as the dealer I could ask you AND YOU WOULD FIND OUT! So I called VW credit at his suggestion and was told that you can buy it out at any time, but some dealers are telling people they have to keep it for a certain period which is not true.
I talked to a dealer that finally admitted what is going on. You can buy it out immediately, but the dealership gets a charge-back on their commission if you do it before 3 months. So a promise to keep it longer could be a price negotiation point.
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Has anyone gotten the payoff amount from VCI? I got mine last week and I understand that's the amount I take to my credit union to finance. But curious about another set of document called "bill of sale" with a different amount that I need to sign and return to VCI.
I just asked my dealer about this and this was his response:
"If you payoff the vehicle lease on, before, or after 3 months it does not charge the dealer back at all so I am not sure what was read online. The only thing I can think of that relates to whatever you read in just all my time being with VW (11 years) is if an employee who is in an employee lease goes to sell, trade, or purchase their lease out before 12 months, the dealer will get charged back some percentage. That is the only time the dealer gets charged back for anything lease oriented."
Has anyone gotten a clear answer about whether the interest for the full term of the lease has to be paid when buying out?
My dealer is saying that the interest for the full term must be paid either way and; therefore, it would be cheaper to buy the car directly even if I can't use the tax credit. This is what they said:
"The way every lease works is you have a set payment. In this case we will use the payment of $522 for each month for 36 months with the residual buyout of $24,359. That $24,359 is at the end of the 36 months and also is the remaining balance if you wanted to keep the vehicle. However, in the event you wanted to buy the car out in the beginning middle or just a little before the lease is up, they will calculate your payoff based off of the remaining payments you signed for in the lease. For example, if you made 12 payments and have 24 months left of payments, they take the 24 payments of $522 and add that number to your residual end amount to calculate your payoff. It is not like how a finance works where you have lets say $400 going towards a principal amount and $122 going towards interest and then when and if you pay it off the payoff calculates a principal amount that excludes the interest."
I would greatly appreciate anyone with experience in buying out to tell me if my dealer is correct.
My dealer is saying that the interest for the full term must be paid either way and; therefore, it would be cheaper to buy the car directly even if I can't use the tax credit. This is what they said:
"The way every lease works is you have a set payment. In this case we will use the payment of $522 for each month for 36 months with the residual buyout of $24,359. That $24,359 is at the end of the 36 months and also is the remaining balance if you wanted to keep the vehicle. However, in the event you wanted to buy the car out in the beginning middle or just a little before the lease is up, they will calculate your payoff based off of the remaining payments you signed for in the lease. For example, if you made 12 payments and have 24 months left of payments, they take the 24 payments of $522 and add that number to your residual end amount to calculate your payoff. It is not like how a finance works where you have lets say $400 going towards a principal amount and $122 going towards interest and then when and if you pay it off the payoff calculates a principal amount that excludes the interest."
I would greatly appreciate anyone with experience in buying out to tell me if my dealer is correct.
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205 Posts
Here is what my payoff looked like. I paid for the remaining payments minus some lease charge rebate.
![Font Material property Automotive tire Automotive mirror Parallel]()
So we can assume that the rebate is the sum of all the remaining monthly rent charges (and I suppose the tax on that portion)?
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205 Posts
I am not sure, there were no other details or breakdown on where that number came from .. I do know the 'Remaining future payments' was exactly (my monthly payment) * (22 remaining payments).
The "Lease Charge Rebate" was what the finance charge would have been on those payments.
I was reading up a bit on how that amount is figured and apparently there a couple different ways it might be calculated, depending on which method depreciation allocation is used (FRB: Vehicle Leasing: Leasing vs. Buying: Early Termination, see section on "early termination charge methods"). Anyone know if this calculation varies by dealer or is it the same for all VW dealers? I have trouble getting clear answers from finance departments on simpler things, so I haven't tried asking this.
I have no prior experience, but this should have nothing to do with dealer at this point. You are dealing with VCI now.
Your dealer is lying. What a common surprise! Many reports of buyouts done here, and they all get credit for any interest (rent) on payments after the buyout. Otherwise it would make no sense and there would not be so many doing buyouts and then finance at a lower rate.
Really interesting thread; my conundrum is I can either lease or buy, and I am most concerned that if I buy, I have to wait until next year's tax season to file for the $7500 credit. That is if it hasn't either been reduced or eliminated. On the other hand, in looking through this thread buying out a lease is not without significant costs....yikes.
Thanks for your replies everyone! After some back and forth, I was finally able to get my dealer to send the lease contract, which confirmed that you only pay the interest up till the point of buy out. I really can't understand why they would lie about this. What do they have to gain?
The dealer makes some money by marking up the MF (interest rate) above the base rate VW credit charges. Mine admitted its a profit center. When you buyout they lose that.
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33 Posts
he's not lying. he just doesn't understand shit. did you talk to the finance guy or a salesperson? once you agree to a car they hand you off to the finance people so your sales guy never actually processes anything to know how it works
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Maybe already discussed. But is the 7500 discount realized in calculation of the monthly lease payment only? But when say after year u want to purchase and the residual value percentage of say 80% only gets applied to the original MSRP ? Not having the discount of 7500. Confused I am.
No the $7500 is taken off the top from the capitalized cost. You save that amount no matter when you buyout.
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