Automotive

3 Year Car Lease - Volkswagen Taos Trendline 1.5

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  • Jan 25th, 2023 10:38 am
[OP]
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Sep 25, 2016
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3 Year Car Lease - Volkswagen Taos Trendline 1.5

Hi,

My cousin is going to pick up his new car this evening. - Volkswagen Taos Trendline 1.5

Befause he is here on a work permit a down payment equal to 20% of the transaction price is required.

I'm looking at his agreement/contract and the interedt rate is insanely high -8.75%. Does anyone know if the interest rate is negotiable?

Thanks
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If he's picking the car up this evening isn't it a bit late to be asking these questions?
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"-8.75%" VWFS is giving this ... that's a hot deal.
[OP]
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The_Professor wrote: If he's picking the car up this evening isn't it a bit late to be asking these questions?
He didn't inform me until last night and he can always still cancel
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He should be buying a beige Corolla.
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tt1688 wrote: Hi,

My cousin is going to pick up his new car this evening. - Volkswagen Taos Trendline 1.5

Befause he is here on a work permit a down payment equal to 20% of the transaction price is required.

I'm looking at his agreement/contract and the interedt rate is insanely high -8.75%. Does anyone know if the interest rate is negotiable?

Thanks
Interest rate is not negotiable on a VW lease in Canada. It is set by VW Finance and so is the residual. The 20% down payment is likely required due to no credit history here.

Interest rates are that high now on most leases, Subaru being one exception still. The good news is that with such a high down payment and likely a pretty high residual still, their monthly payment should be fairly low. I would insist on getting a full replacement waiver on the insurance policy so that if your cousin writes off the car, he will get a full refund on that down payment and the payments he makes. It's a very cheap add-on for a peace of mind.
[OP]
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Sep 25, 2016
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aleks wrote: Interest rate is not negotiable on a VW lease in Canada. It is set by VW Finance and so is the residual. The 20% down payment is likely required due to no credit history here.

Interest rates are that high now on most leases, Subaru being one exception still. The good news is that with such a high down payment and likely a pretty high residual still, their monthly payment should be fairly low. I would insist on getting a full replacement waiver on the insurance policy so that if your cousin writes off the car, he will get a full refund on that down payment and the payments he makes. It's a very cheap add-on for a peace of mind.
Can you explain more on this full replacement waiver.

Also, I noticed they are charging him on all of these options. Are they a must?
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tt1688 wrote: He didn't inform me until last night and he can always still cancel
Can he tho?
There is no cooling-off period
Under Ontario law, there is no cooling-off period for motor vehicle contracts, so be sure of your decision before you sign. In most cases, the contract will be binding.

Read and understand the contract and bill of sale before signing. If you don’t understand something, ask questions. You can also try to negotiate terms and ask for amendments to the contract.
https://www.ontario.ca/page/buying-new- ... 0questions.

Unless you find something the dealer is misrepresenting.... enjoy your new car!
tt1688 wrote: Can you explain more on this full replacement waiver.

Also, I noticed they are charging him on all of these options. Are they a must?
Depreciation Waiver. IE if car is in total loss, insurance will paid out total cost of vehicle on invoice instead of the market value of the (now used) vehicle. It's policy number 43 in most provinces. 43r in AB, OPCF 43 in Ontario.

Again, if he signed the contract, it's too late in doing anything unless you didn't get the car exactly the way you ordered it. But as of options, Admin Fee, Security ID and Mats are something you can probably negotiate out of if he didn't already signed. But less than $1K mark up in this market isn't that bad, unless the economy is crashing way faster than expected.
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tt1688 wrote: Can you explain more on this full replacement waiver.

Also, I noticed they are charging him on all of these options. Are they a must?
Xtrema explained the insurance thing above. The fees are all standard in that snip you attached other than Security ID. I would have tried to get out of that one. But given that Toyota for example charges up to $1200 for doc fees, this isn't too bad at $398. The mats are a useful accessory so not too worried about it.
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Xtrema wrote: Depreciation Waiver. IE if car is in total loss, insurance will paid out total cost of vehicle on invoice instead of the market value of the (now used) vehicle. It's policy number 43 in most provinces. 43r in AB, OPCF 43 in Ontario.
Thanks for explaining the concept. I'm just wondering, what would be the purpose of this full replacement waiver on a leased vehicle? Since the loss payee on the leased vehicle is VWFS, is there any benefit to the lessee for paying extra for this insurance add-on? Wouldn't VWFS just get more money in case of total loss or would some of the money actually go to the lessee?
Last edited by LTBiYR on Jan 23rd, 2023 1:10 pm, edited 1 time in total.
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tt1688 wrote: He didn't inform me until last night and he can always still cancel
doubtful
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LTBiYR wrote: Thanks for explaining the concept. I'm just wondering, what would be the purpose of this full replacement waiver on a leased vehicle? Since the loss payee on the leased vehicle is VWFS, is there any benefit to the lessee for paying extra for this insurance add-on? Wouldn't VWFS just get more money in case of total loss or would some of the money actually go to the lessee?
To protect the lessor, they expect to be paid out the outstanding lease payments and residual should the lessee total the car and insurance payout of FMV is less than the outstanding obligations
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tt1688 wrote: He didn't inform me until last night and he can always still cancel
If he's picking it up today the car has already been plated/registered in his name and financing is all but complete. It's too late. Good of you to be trying to help him out, but these questions should have been asked when he was shopping around and getting quotes. As another poster mentioned, tell him to just enjoy the Taos as this point.
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LTBiYR wrote: Thanks for explaining the concept. I'm just wondering, what would be the purpose of this full replacement waiver on a leased vehicle? Since the loss payee on the leased vehicle is VWFS, is there any benefit to the lessee for paying extra for this insurance add-on? Wouldn't VWFS just get more money in case of total loss or would some of the money actually go to the lessee?
Mostly because OP's cousin put in 20% down and that he's here on a work permit, so new to country. So it's just a bit more coverage in case he's not used to Canadian road/rules/winter and get into an at fault incident.

And 43 isn't that expensive anyway.
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LTBiYR wrote: Thanks for explaining the concept. I'm just wondering, what would be the purpose of this full replacement waiver on a leased vehicle? Since the loss payee on the leased vehicle is VWFS, is there any benefit to the lessee for paying extra for this insurance add-on? Wouldn't VWFS just get more money in case of total loss or would some of the money actually go to the lessee?
VWFS would get the pay-out amount, lessee gets the remainder. Example: You lease a Taos and lets say it's $30,000 to start the lease. You put down 20% which is $6,000, now the lease starts at $24,000. You make payments for 2 years and the Taos gets written off. VWFS calls and says There is $20,000 left owing on the lease including remaining payments. If you have this coverage your insurance company writes a cheque to VWFS for $30,000, VWFS takes the $20,000 and sends you a cheque for $10,000. These are just round numbers with no taxes or interest involved.
StatsGuy wrote: To protect the lessor, they expect to be paid out the outstanding lease payments and residual should the lessee total the car and insurance payout of FMV is less than the outstanding obligations
That's what GAP insurance is, in the example above the insurance would pay $20,000 to VWFS and that's it.
Last edited by aleks on Jan 23rd, 2023 4:30 pm, edited 1 time in total.
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Never put a down payment on a lease vehicle. He shouldn't be buying new either. Not too late to walk away.
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geokilla wrote: Never put a down payment on a lease vehicle. He shouldn't be buying new either. Not too late to walk away.
How do you suggest he walk away if he signed and VWFS is ok with the deal?

It may be a "bad" deal for OP's cousin but if he REALLY needs a car now and can afford the payments, why not?
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Xtrema wrote: How do you suggest he walk away if he signed and VWFS is ok with the deal?

It may be a "bad" deal for OP's cousin but if he REALLY needs a car now and can afford the payments, why not?
He didn't pick up the car. As long as he didn't pick up the car, he can walk away. 3 years of payments for a base Taos Trendline is $20k + tax. The car's MSRP is $30k + tax. As bad as the used car market is, he can buy a lot of car for $20k, assuming he can do lump sum. If he can't, then well, that's a really hefty interest rate to pay...
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geokilla wrote: He didn't pick up the car. As long as he didn't pick up the car, he can walk away. 3 years of payments for a base Taos Trendline is $20k + tax. The car's MSRP is $30k + tax. As bad as the used car market is, he can buy a lot of car for $20k, assuming he can do lump sum. If he can't, then well, that's a really hefty interest rate to pay...
This is the reason why the car market is the way it is here in the Great White North. Keep giving into these dealers and pay the ridiculous lease/finance rates.

Think out of the box and find something used "somewhere". Never say never.
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geokilla wrote: He didn't pick up the car. As long as he didn't pick up the car, he can walk away.
I meant how do you walk away from a signed contract in Ontario without at least losing the deposit or some financial compensation to the dealer for the hrs worked on the deal?
jmc111 wrote: This is the reason why the car market is the way it is here in the Great White North. Keep giving into these dealers and pay the ridiculous lease/finance rates.

Think out of the box and find something used "somewhere". Never say never.
Until 2022, you can finance/lease a car for next to nothing on interest. (Actually, Chevy Silverado are piling up that GM is bring out 1.5% for 72 months right now).

I have no problem with people who are new to the country rather spend a bit more on new while they start to figure this country out if they can afford it. Last thing you want is a crappy used car that need a lot of maintenance/repair and you don't know who is honest enough to turn to.

But I have to say this deal isn't the greatest deal in the world if all you need a basic transportation. A 2023 Corolla L can be had for $300/mth ($200/mth less than Taos) with 20% down and 6%.

And buying used, you are looking for diamonds in the rough under $10k.
Last edited by Xtrema on Jan 23rd, 2023 5:19 pm, edited 5 times in total.

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