jd_1

Hi, first post here. I've been reading a lot on here as I'm considering purchasing the S4 soon.
I have a few question about Audi's Financing and I wasn't sure where else to put it to be honest.


I've just relocated to the US from Ireland. I dont know exactly how long I will be here, but it's at least until the end of 2014. Honestly, I expect it will be longer.

And while I have a perfect credit rating where I'm from as far as American Credit goes, I may as well not have existed before this week. This limits my possibilities greatly. Luckily for me, the company who make the exact car I want, offer a "Foreign Business Professional" program; which means I can get Audi Financing. The catch is, it has to be a new or certified car, so taking more finance than I would like.

And this brings me to my question. If I end up having to leave the country early... say after a year on a three year finance deal, will I be able to sell the car and pay off the loan? I recall reading that when financing you wont actually own the car until a certain amount has been paid off. Which may mean I can only sell the car back to the Audi Dealer? I've tried to find details on this regarding the Audi Finance package, but to no avail.

Anyone know more about it, or have any advice for me?

Difuser

It should be a term loan the same as any other. You won't "own" the car until the loan is paid in full but you could still sell the car at anytime. the question is can you sell the car for more than you have financed/ balance of loan amount.

Be aware that the banks will not loan for longer than you have a visa for the US. My Kiwi boss ran into this on his Q5 and they would only allow 2yrs for his current Visa.

jd_1

Okay, well that's a relief. I had read somewhere that you couldn't just sell it because the title wouldn't be in your name.

I will be putting down a decent chunk (probably 20%+), so I should be able to cover the balance with the sale no problem... even if I have to sell cheap due to time constraints.

Visa isn't an issue, mine wont actually expire until 2019.

rex2001

Have you considered to take out a 2 year term lease? 1. You don't have to lay out large deposit, the worst you have to pay out extra year payments should you leave in one year. Besides, Audi leasing may ask for less to settle. 2. If you stay longer, you always have the option to buy out at the predetermined residue value.

jd_1

Ya, I did look at that option all right. But basically, Audi do not want you leasing for anything less than 3 years. They work it so if you shorten it, all you're actually doing is paying the 3 years lease price in two years.
Also, I've worked out the figures and I feel that it is much more cost effective to purchase a certified used and sell whenever required. Even taking into account the loss of a few k due to a quick sale (if needed), I still think the leasing is vastly more expensive.
Of course, you do get a brand new car if leasing, but that's not something that's ever bothered me. In fact, I have never bought a new car.

snagitseven

Just be aware, you would have no lien-free title to transfer to a new owner until a lease or loan was paid off in full and the clear title in your name was sent to you. Doubtful any potential buyer would complete a purchase transaction without it (in most states, a new owner must have a title to register a vehicle). Also, check for possible early termination fees and be aware, due to higher early depreciation, that the loan payoff in the first year or two could be more than the car's value in a sale at that time. If so, you would have to pay off more to terminate the lease or loan than a sale might generate. Finally, selling it outright to a dealer will almost always result in a lower price than possible with a private sale.

jd_1

Em, this sounds like exactly what I was worried about.

I believe Audi are pretty good with early termination.
How much below market value should you expect when selling to a dealer (not trading in)? I am perfectly will to accept a reasonable loss.

snagitseven

There's no way to know accurately one or two years down the road but you could expect a dealer will want to make a decent profit reselling the car. Market value to a dealer usually means what a car would bring at then current wholesale auction prices - less than what Edmunds, KBB or NADA show online. You could reasonably expect several thousand dollars below a retail private sale.

The challenge of disposing a leased or financed car in a short period of time is the payments are equal in level during the term whereas the car's depreciation is always higher in the first years vs. over a longer period of time. In other words, the sooner you sell a car after acquisition, the more is still left on the lease or loan against the accelerated depreciated value, resulting in an "upside down" situation where an owner owes more than the car is worth.

Just a thought - you might be better off to consider buying a clean 2 or 3 year old used Audi where the biggest annual depreciation hit has already occurred. I realize you have the international finance issue but if you were able to buy a used one outright vs. financing or leasing a new one, you would be many thousands of $ ahead in two years.

jd_1

Perhaps I didn't make it clear, that's precisely what I am doing. I am looking to purchase a 2010/2011 used certified. I have never before taken the "off the lot" depreciation and don't plan to start now.


I'm willing to take a hit to be honest. My main issue is cash-flow rather than $ in two years. If I bought outright now, it would be 2004-2006 range and it would mean I'd be very tight on cash-flow for the next couple of months.
Also, a consideration for someone like me is that the financing will help build my nonexistent credit rating. And the ONLY way I can get financing is through the Foreign Business Professional program, which means I have to purchase certified.

snagitseven

Sounds like you have but one path to achieving your goal. Good luck.