March 03, 2003
Two years ago this month my wife and I leased an Audi TT. We had looked at this car a couple of times and loved its curvy appearance. The car we leased was used and therefore the monthly lease payments were very reasonable. In the negotiation we asked the dealer if we could walk away from the car prior to the end of the lease. He assured us that we could. So we went with a 4-year lease as it got us the lowest monthly payment.
The car is fun to drive and attracts a lot of attention, whether parked or moving. It has been a blast to own. It has also been expensive to own. High performance tires don't have the tread life regular tires have, and they are considerably more expensive. Insurance is also a high ticket item, and one that continues to grow every six months.
I've owned sports car and sporty cars several times in the part so I knew that there would be some compromises concerning this car. However I find that I am less willing to make these compromises. I've tasted what owning a luxury car is like and I find the TT to be lacking in some areas. Getting into and out of it when it is raining is impossible to do without getting the back of your left pant leg soaking wet just below the knee. You see the door sill is wide and you end up with that part of your left leg against the car when you get in, almost without fail. The seat pan is well bolstered. Too well in fact, as the sides of the seat press upwards into the backs of your thighs. You can shift to one side or the other, moving the pressure from one leg to the other, but you can't avoid it altogether.
So the time has come to part ways with the little red sports car. Only the leasing company has other ideas. It seems that the dealer lied about our ability to walk away from the lease at any time. Oh, sure you can walk away, but not with out a potentially huge penalty. You see they will sell the car once I give it back, at a wholesale auction where it will likely not even generate book value. Then they will bill me for the difference between the sale price and the currently buyout as calculated by them. This amounts to at least 7000 dollars in my case.
I could sell the car privately, and in fact I have tried that 3 times since last August, but no one is willing to pay over book value, let alone $7000 over book. This last time I was willing to pay $3000 myself to lower my asking price to just $4000 over book, still no deal.
So my final option is to trade it in and hope that the dealer will give me enough to make it worth my while. The best dealer offer we have gotten would get us into a barely used Mercedes-Benz for roughly the same monthly payment. We'd have to refinance some of the difference between their offer (1500 over book) and the current buyout, but we'd only have to pay $3000 down to swing the deal.
If not for the TT's shortcomings and expensive upkeep I would never consider selling at a loss like this, but I am so unhappy with the car that I am ready to switch no matter what. The M-B would be a purchase and not a lease, so that in 60 months we'd own that car. And since we'd be trading in a car we'd save over $2000 in sales tax on the deal as well. The Mercedes is a wonderful car to drive, it has 4-doors and a back seat, and it doesn't have quick wearing high performance tires on it. And we believe it will hold its value, rather than depreciating faster than we can pay it off.
My fear about all this is that we are throwing money away by selling at a loss. But I realize that in two years we'd have no car and, to match this deal, we'd have to pony up $6500. (3000 down plus 2000 in taxes plus 1500 value the dealer is giving up over book) I don't know of an investment I can make today that will return 116% in two years so I think this maybe a good deal.
I guess I had already talked myself into this deal, I just needed to write all my thoughts about it down so that I could put them in order and see them in black and white. This is a compromise and in some terms an expensive one, but it ends situation that is expensive emotionally as well as financially. Anytime you can make your life less emotionally expensive you've made a wise investment in yourself.