My lease is up in April 2007 on my 2003 1.8T Passat. I am 22,000 km's over the limit on my lease. The car has been great. What should I do, pay $2,700 penalty and give the car back or buy it. The buyback is $15,000 plus tax. It has 142,000 km's.
People have told me that Volks may deal on the mileage if I purchase or lease another car. Anyone ever have this situation?
Thanks George in Montreal
Now you know why you should *never* lease a vehicle!
If you want a simple answer then...
Check the book wholesale value for the car, and the private party sale value of the car. If wholesale value is over 15,000 then keep it. If only the private party sale value is over 15,000 then keep it if you
*really* like it.If you were to add up all the lease payments, what it cost you to buy into the lease (initial payment, trade whatever) and subtract that from the *real* initial value of the car (not the sticker, but what you'd have paid had you bought it.) Factor in interest (delete it from the payments) at what the rates were in 2003 (they were low, right?)
The bottom line is that a lease looks really nice when you get it, payments are low, but there are downsides:
You don't build any equity in the vehicle. You are seriously limited in your use of the vehicle (mileage and damage issues.)
Next time, don't lease, buy.
I've leased for years. I've always found that the cars that come off lease stay at the dealer and go on the used car lot. So it's the dealer who calls the shot on the mileage. It should be just another factor in the deal as long as the next car comes from the same dealer.
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