Should you Buy Or Lease Volkswagen? Lease Deals

Is it better to lease a Volkswagen or buy one?

If you’re like me the answer has been ‘buy!’  Because no way was I going to pay for something that I didn’t own.  But then, slowly, I began to realize I never really own my cars.

And that’s because I’m making payments forever.  Plus by the time I’m done making payments I want something new anyway!  And that doesn’t even mention the cost of repairs once the vehicle is out of warranty.  Another factor not being mentioned is the breakneck pace at which technology in our cars is progressing.  (Why would we want anything more than a few years old?)

So, in this iDriveSoCal podcast, long-time Volkswagen expert Shant Bashian from Ontario VW joins me to sort out the options.  Perhaps leasing a Volkswagen is the way to go for you.  Or maybe buying.

The answer is different for everyone.  But leasing has been increasingly popular over the past several years and for good reason.  (I think, because, yes I’ve converted and now always lease my vehicles.)

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***Transcription***

Recorded @ Ontario Volkswagen in Ontario, CA

Should You Buy Or Lease A Volkswagen?

Shant: The first question’s gonna be, “What are you gonna do with the car? How many miles are you gonna put on it, and then where do you see yourself three years from?”

Then we’ll determine if you should lease a Volkswagen or buy, and then we’ll outline both the lease and the purchase. You could see the monthly payments on both scenarios and then you decide which one is more fit for you.

Tom: Welcome to iDriveSoCal, the podcast all about mobility from the automotive capital of the United States, Southern California. Tom Smith here, and I am excited to be at Ontario Volkswagen with my good pal, Shant Bashian, the general sales manager of Ontario Volkswagen.

“What are you gonna do with the car? How many miles are you gonna put on it, and then where do you see yourself three years from?”

The topic du jour today is one that’s on a lot of people’s mind when they go to buy a new car and that is just simply, “Do I buy or do I lease?” I’ve formed some personal opinions on it myself, but we are going to hear from the man here at Ontario Volkswagen.

Mr. Bashian, thank you so much for joining me yet again.

VW Lease & Buy Factors To Consider

Shant: Thanks for having me Tom, and that question comes up all the time.

I find that most people know whether they want to buy or lease a Volkswagen because they understand it now. There’s a lot of information out there.

For us, we have a different perspective regarding buying versus lease. We’re in the business and we like to get the upgraded product rather quickly, but it really comes down to this.

What are you planning on doing with the vehicle? What’s the purpose of the car? How many miles are you gonna drive it?

And, are you the type of person that likes to have something new rather quickly? Do you get bored of your vehicle?

Warranty Consideration For Leasing Or Buying

You have to look into that. Buying a car, it’s more of a long-term commitment, really.

So, most people right now will purchase a vehicle and finance it for 60 to 72 months. Most vehicles will come with three year or four-year warranties backed by the manufacturer.

When it comes to Volkswagens, we have a six-year, 72,000-mile warranty right now-

Tom: Yeah, big one.

“When it comes to Volkswagens, we have a six-year, 72,000-mile warranty…”

Shant: …that covers bumper to bumper and the powertrain.

So, when it comes to purchasing a Volkswagen throughout your monthly payment term, you are covered.

If anything should go wrong, you have nothing to worry about. There’s no additional expense to look into, but again, that’s if you’re planning on keeping the car for a long time.

Now, if you’re the type of person who likes to get something new every few years, that’s when lease comes into play. Also, some Volkswagen leases may be tax deductible from your income, and I advise you to check with your accountant on that.

Tom: Depends on what you do, right?

Shant: Mm-hmm (affirmative).

BEST VW Lease SPECIALS HERE

End of Term VW Lease Options

Tom: I’ve had some buddies that have been in the sales world and they’re able to write off their entire lease payment.

Shant: You can write off the miles. I know that. I don’t know if you could write off the entire lease payment. Again, you gotta check with your accountant.

Tom: Yeah, case by case.

Shant: It’s case by case, but again, so here you have, let’s say, typically a three-year lease.

You make those minimum monthly payments for three years. The monthly payment will be less than a purchase in most cases.

Most cases, you’re looking at $65, $70, $80 less than a purchase, and after three years, there’s no headache. There’s no, “Oh, I gotta sell my car. Oh, I gotta trade my car in.” You walk into the dealership and you have options.

You can buy out your Volkswagen lease at the residual value which is set the day you sign that contract, so if you have a $21,000 car, you get into a lease of, let’s say, $200 a month and at the end, your residual value on that vehicle is $12,000, after three years your payments are done.

You can walk in, you can turn the vehicle in and get something else. And you don’t have to worry about trying to sell it, trying to trade it, or you could buy that vehicle at the residual value of $12,000 plus tax, and then you own it.

You can finance that dollar amount, you can pay cash for it, you can sell it to someone else, you can trade it into another dealership. There’s so many options at the end of a lease.

Residual Value

Tom: The residual is what my car’s gonna be worth at the end of this lease?

Shant: That’s correct, so your residual is based on the amount of mileage you’re planning on putting on the car.

“There’s so many options at the end of a lease.”

So, if you go into a 30,000-mile lease, obviously, that’s gonna differ than a 36,000-mile lease or a 45,000-mile lease.

That’s what the lender… They say, “Okay, 45,000 miles, three years from now, this vehicle will be worth X dollar amount.” That’s your residual value.

Tom: Going back a little bit further, you had mentioned, in most cases, the lease will be less, and you just touched on miles.

The All-Important Mileage Factor In Leasing

I’m assuming depending on how many miles you’re buying on that lease is going to be that, in most cases, situation. Is that correct?

Shant: That’s correct. Yeah, sometimes we’ll get a phone call and the gentleman or lady will state, “I need a lease and I want to get 25,000 miles per year.”

At this point, I’m like, “Okay, let me explain something. I’ll give you the numbers no problem, but you might as well buy the car,” because if you’re gonna pay a 25,000 mile per year lease, it’s the same thing as a purchase or close or maybe even more. You see?

Tom: Mm-hmm (affirmative).

“…a 30,000 mile lease, obviously, that’s gonna differ than a 36,000 mile lease or a 45,000 mile lease.”

Shant: After three years, you’re planning on having 75,000 miles on that car? You’re real close to 100,000. You might as well buy the car.

Tom: That’s a lot of miles?

Planning To Drive Lots Of Miles?

Shant: Yeah, some people put that mileage, and those people I advise you buy the car. You don’t lease that car.

Tom: That’s because?

Shant: That’s because you’re planning on driving it to the ground.

Tom: Okay, and because you’re putting so many miles on it, the value at the end of that lease term or at the end of the purchase term doesn’t matter because you put a ton of miles on it in a short amount of time.

Shant:  That is correct, so the residual value will suffer. That’s more kind of simplified, you can say. Some people say, “Oh, when I’m leasing the car, I don’t own the vehicle versus if I’m buying the car, I own the vehicle.”

Let me explain something. If you’re financing this car, you don’t own the car.

Excess Wear Waiver When Leasing A Volkswagen

Tom: Yeah, the bank does.

Shant: The bank owns the car, and if you’re leasing the car, the bank owns the car.

The only difference is this; after a three year or a four-year lease term, you have options on what you can do with that car.

Because, if you’re tired of it and you want to walk away, you’re free to do so versus purchase, you are not liable.

“You scrape the bumpers, you have dings, dents, scratches, torn seats, cracked windshield. This is excessive wear and tear.”

You are tied into that contract until the end of the term, so after three years, if you’re tired of that vehicle… Or if your family grew… You have two kids now and you got a midsize sedan and that double stroller doesn’t fit anymore…

Now, trying to get out of that vehicle because you purchased it is gonna be a little bit tougher, so that’s why you gotta decide where am I gonna be three years from now realistically?

That’s how you gotta look at it.

Ontario VW | Volkswagen Lease

How To Avoid Lease Issues

Tom: Where do people get in trouble when they lease a Volkswagen and then turn around, “Oh, my God,” get a big surprise bill at the end of it?

Shant: Two different things. Excessive wear and tear will be if your wheels have been curbed, so you try to park the vehicle, you hit that curb. You scrape the bumpers, you have dings, dents, scratches, torn seats, cracked windshield. This is excessive wear and tear.

The lender will come in and inspect the vehicle and they’ll charge you for those, so most of the time, cars come back in fairly good shape.

I’ve seen some rough cars come back in, but they had excess wear waiver. Excess wear waiver with Volkswagen Credit will waive up to $10,000 in excessive wear and tear. That’s including-

Tom: 10,000?

VW Lease Vehicle Return Condition

Shant: Yeah.

Tom: Wow.

Shant: The only thing you need to understand about excess wear and tear, it covers excessive wear and tear.

That doesn’t mean you can return the car with a door missing or a bumper hanging off, because that’s not excessive wear and tear. That’s collision or you know …

Tom: Sometimes, you need to spell out common sense, right?

“…with Volkswagen Credit will waive up to $10,000 in excessive wear and tear.”

Shant: Yeah, and I say that these days.

I didn’t say these things earlier in my career because I didn’t foresee it. I wasn’t expecting for people to think, “Oh, I can bring the car with front and rear bumpers missing.” It doesn’t work that way.

That’s not excessive wear and tear. That bumper’s missing. That’s a problem.

Calculate Realistic Annual Mileage

The other scenario I ran into, we tell people… They ask, “What if I go over my miles?”

Tom: That’s where I wanted to get to.

And, I figured you’d have something else to point out that I didn’t think of, and that was the excess wear and tear… But, what I was going towards is the miles, because a lot of people that I talk to are like, “Oh, I leased once. It didn’t work out. I had this huge number that I had to pay at the end of the lease.”

It’s like, “Well, wait a minute. Why was that?” It’s like, “Well, I wanted to get my payment as low as possible, so I figured I’d only drive 5,000 miles a year.”

Shant: That’s impossible.

Tom: It’s like, well, no, you gotta be realistic.

For me, personally, I like leasing for getting something new all the time.  Also, what I recommend to people when they ask me is, hey, buy more miles than you think you’re gonna need.

Committing To Your Miles Up Front Is Best

Because they’re typically way cheaper when you commit to them upfront as opposed to have to go over and then pay for them on the back end.

In the case of Volkswagen, what is that? Is there a standard number that, hey, this is how much it’s gonna cost me when I’m committing to the lease? You already said it’s 20 cents a mile on the back end.

“…once a year, you can call VW credit, and you can buy more miles throughout your lease.”

Shant: Typically, upfront mileage is 12 cents,

Tom: Big difference there.

Lease Mileage Flexibility – a BIG Volkswagen Plus!

Shant: Right now, actually, once a year, you can call VW credit, and you can buy more miles throughout your lease.

So, I leased an Atlas. I have a 12,000-mile lease. It’s a three-year term, and right now, we’re averaging about 14,000 miles already.

I’ve been in the vehicle for almost two years, so all I do is pick up the phone, call VW credit, and say, “I need to buy another 3,000, or another 4,000 or another 5,000 miles.”

And they’ll calculate that mileage. I believe it was at 15 cents and then they’ll just put that into my payments.

“…all I do is pick up the phone, call VW credit, and say, “I need to buy another 3,000, or another 4,000 or another 5,000 miles.”

Tom: Not all manufacturers do that. As far as being able to adjust your mileage midstream in the least, I know that not everybody does that, so that’s a great thing that Volkswagen offers, and you can do that once a year for each year of the lease or-

Shant: Yes, you can.

Tom: That’s a great thing.

Lease Or Buy – Weigh Your Options

Shant: Volkswagen Credit leases are simple. You can return the car anywhere in the country at any Volkswagen dealer.

Tom: Got it. Okay, well, a lot of great information and it sounds like your perspective, case by case basis, the factors you laid out earlier, is there anything else?

Hey, I’m a new customer, Shant. Just rolled up to Ontario Volkswagen. I’m really torn between buying and leasing.

Any other suggestions or points that you want to make for me as someone considering going either way?

“How man miles are you gonna put on it, and then where do you see yourself three years from now?”

Shant: The first question’s gonna be, “What are you gonna do with the car? How many miles are you gonna put on it, and then where do you see yourself three years from now?”

Then we’ll determine if you should lease or buy, and then we’ll outline both the lease and the purchase. You could see the monthly payments on both scenarios and then you decide which one is more fit for you.

Tom: All right. Well, all good information.

BEST VW Lease SPECIALS HERE

Ontario Volkswagen – Lease/Buy Experts

Thank you so much, always, Mr. Shant Bashian here at Ontario Volkswagen. You guys are a wealth of information for the iDriveSoCal listeners and surfers if you’re coming across iDriveSoCal.com.

Thank you as always for iDrive… Oh, you know what? I think in the last podcast, we dropped your contact information. Do you want to do that here?

Tom: Additional questions for whether or not you should buy or lease Volkswagen, reach out to Mr. Bashian, and again, thank you so much.

Shant: Thank you for having me.

Tom: Most appreciated. For iDriveSoCal, I am Tom Smith. Thank you as always for tuning in.

 

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