Re: Newbie Questions (long reply)

["Christopher Morgan" <cmorgan02@sprynet.com>]

Hey Jeremy,
	I'm going to be leasing a GLX in a few weeks (I hope).  I don't blame you
for being hesitant about leasing a car.  Leases can be tricky because of
the convoluted way that payments are figured out.  Here is how the VW
Credit leasing program works.  I'm going to ignore taxes because they vary
from state to state.  A lease payment has two parts, the Monthly
Depreciation and the Service Charge.
	To get the Monthly Depreciation, start with MSRP, then subtract the
discount you get and any money you put down (sometimes called cap cost
reduction).  The result is the Capitalized Cost of the car.  Then,
calculate the Residual by multiplying the MSRP by the percentage given in
the lease program (the percentage varies with the miles per year you
choose).  The total depreciation is the Capitalized Cost minus the
Residual.  Divide this figure by the number of months of the lease to get
the Monthly Depreciation.
	To get the Service Charge, take the sum of the Capitalized Cost and the
Residual and multiply it by the Money Factor, also given in the program
(varies by the length of the lease).
	Add the Monthly Depreciation and the Service Charge to get your Monthly
Payment.  So, the only thing you can really "negotiate" is the discount. 
The Money Factor and Residual are determined by the terms you select.  Do
not negotiate your deal around a payment (this is were people screw
themselves).  First get a price/discount as if you were going to buy the
car with cash, then calculate payments based on the various terms.  In
general, longer leases decrease the Monthly Depreciation (less percentage
drop per year) but increase the Service Charge (higher money factor). 
Lower mileage leases reduce the payment by reducing depreciation (raising
the residual values 2% for 12k/yr option, 3% for 10k/yr).  
	The total due at lease inception is the sum of your down payment, the 1st
payment, a security deposit (monthly payment rounded up to the nearest
$25), and a $450 acquisition fee (and taxes, DMV fees, etc).  If you turn
in the car at the end of the lease you have to pay a $250 termination fee
plus any charges for excess wear and tear.  Excess wear and tear includes
dents and scratches an inch or larger (I think), lack of maintenance,
cigarette burns, etc.  Also, the tires must all match and have at least
5/16" tread left (I think).
	Here are some current (until 9/30) figures based on a NY/CA/MA emissions
version GLX (and corresponding lease rates) 5sp white with leather and all
weather package, $22580 MSRP, $1000 discount, and $1000 downpayment
(required on 2yr leases), 15k miles per year:
term, resid %, resid $, money factor, monthly depr, svc chrg, tot pymnt
2yr, 60%, $13,548, 0.00158, $293, $54, $347
3yr, 55%, $12,419, 0.00284, $227, $94, $321
4yr, 50%, $11,290, 0.00337, $194, $107, $301
	Be prepared for feeling that "I've made all these payments and I have
nothing to show for it" when the lease is up.  If you have any other
questions, feel free to ask.  
	Oh yeah, the VW Credit lease also includes gap coverage.

- -Chris