Re: Good price for an A4Q?

["Osman Parvez" <oparvez1@Nycap.rr.com>]

Byas wrote:
> I'm posting this for a friend (here in CA) who has become a convert to
Audi.  He
> is looking to get a '98 A4Q 2.8 w/ tiptronic Quattro and sunroof pkg.  A
local 
> dealer is asking for ~$34K.  Is this a good price?  Invoice on the car is
about 
> $29K (w/o tax and title).  Also, the lease on this is working out to
$567/month?
> That seems too high to me.  

Beware about calculating the lease cost per month. I may be completely
wrong, but it was explained to me like this: The bank/lein holder is gonna
charge you interest not only on the amount of the car you use, but on the
residual as well. Say that the residual at the end of your lease is
calculated to be $20K on that $34K Audi. So your payments are based on the
$14K that you are "using up", the taxes on that $14K, the taxes on any
rebates (if you are in NY state), and the interest on BOTH the $14K and the
$20K.  After all, you are driving around in the entire $34K  of the bank's
money. 

BTW, it's a good idea to be sure you are covered by some kind of gap
insurance. I don't know about's CA's policy, but it is required in NY and
automatically added in to the price of the vehicle. They might call it a
bank fee. Suppose you friend total's his Q as he's leaving the dealer. The
car is now worth squat.. and your insurance only covers the $34K. Guess
who's responsible for the rest of the money you owe to the bank (interest,
sales tax, etc).. YOU.  It can be substantial for high ticket cars. This is
what Gap insurance covers. 

To tell whether you are getting a good deal on the lease, you need to give
us more info anyway. How long is the term? How many miles per year (usually
12K or 15K)? How much money are you putting down? If you know what the
interest rate is, you might be able to shop for a better one. When a dealer
makes money on the interest rate, it's called money on the "back end." 
Check to see if you have a disposition fee. Many people lease through Chase
only to realize that they have a hefty disposition fee at the end of their
lease ($350 on the one's I sell). Some banks do not charge a disposition
fee. For instance, a Chrysler Gold Key lease doesn't have one. Then again..
some banks will give you low interest rates but then kill you when you
return the car. They'll charge you with all sorts of crap.. anything..
scratches, parking lot acne, a dirty ashtray, a spot on the windshield..
etc. Oxford Resources is infamous for doing this, that's why we don't use
them any more.. even though they charge a lower rate (and we can lower
payments.. and sell more cars). 



As for the car.. Why don't you gently push your friend toward a loaded
1.8TQ? I saw a bright yellow one yesterday at work with a sticker at $30K! 
Personally, I think it is a more attractive car b/c of it's possible
performance upgrade(s) and I believe most of the list would agree.

You claimed that invoice is $29K on the car?? He's $5K over invoice???
That's would equate to a HUGE profit on the American iron I sing and dance
to sell (as I stare at the twinkle of rings across the lot). Let's just say
that I've heard a huge variance on the amount of commission a saleman makes
on the Audis upstairs. This is accounted for in two ways: (1) The price
difference from a 1.8t to an A8q and corresponding profit margin and (2)
tough shoppers. 

Let's assume that the commission for your salesman is 15% of gross profit
(minus the PAC). 
He's gonna make $750 on you at the very least, assuming that his invoice is
actually giving you what the car cost him. I doubt that anyway. He's
willing to admit that he's hosing you for $5K, he is likely making more.  
BTW, $750 is HUGE!!! 



OH yeah.. like I said before "invoice price" doesn't mean anything.. even
when you see the actual invoice. 

Best advice (and most feared from a saleman's point of view): Shop around.
This is the SLOWEST time of year for sales.. which means the BEST deals for
you.  
Sorry this was so long winded. 

Good luck. 
Osman Parvez
Albany, NY
89 200q TAP Chip
170K