Used car leasing
Thread Starter
Senior Member
Joined: Sep 2004
Posts: 476
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Used car leasing
Why is the money factor so horrible on used cars? Especially on high end cars, you can find them a year or two old in like new condition with less than 2k miles on them. Since leasing is more or less deprecation over the term with interest sprinkled on top, why are used car leases so outrageously expensive, especially when the first two years are the biggest depreciation hit?
For instance: I was looking at SL55s. I recently saw 2004 Designo SL55 with an original sticker of 142k being sold for 110k with about 2100 miles on the clock. It doesn't take a math wizard to realize that you're getting a brand new car for 25% off. After a little talking with the sales guy and some number crunching, it turns out it was cheaper to lease a new one. This makes no logical sense. Am I missing something?
I lease cars for a couple of reasons: First, it's a way to hedge my bet against unexpected depreciation. For instance, I had one leased car that was in six accidents. The residual was 17k but the car was really only worth about 8k on trade in. The second reason is tax benefits. My most expensive car is always written off as a business expense.
For instance: I was looking at SL55s. I recently saw 2004 Designo SL55 with an original sticker of 142k being sold for 110k with about 2100 miles on the clock. It doesn't take a math wizard to realize that you're getting a brand new car for 25% off. After a little talking with the sales guy and some number crunching, it turns out it was cheaper to lease a new one. This makes no logical sense. Am I missing something?
I lease cars for a couple of reasons: First, it's a way to hedge my bet against unexpected depreciation. For instance, I had one leased car that was in six accidents. The residual was 17k but the car was really only worth about 8k on trade in. The second reason is tax benefits. My most expensive car is always written off as a business expense.
Thread Starter
Senior Member
Joined: Sep 2004
Posts: 476
Likes: 0
The car was at the local Ferrari/Aston Martin/Bentley/Jaguar/Land Rover/BMW/Acura/Porsche/VW/Mini/Lincoln/Mercury/Audi dealership, which is part of United Auto. I know the sales guy tried a few different lenders, and it seems like the best was a major bank (maybe US Bank?). The best price he could get me was about the same as what I was able to work up on a new car on MB's website, which are not the best prices at all -- I've been able to get significantly lower prices than DCFS by going through brokers.
Maybe I'm approaching this wrong: are there any good sources for used car leases? It's probably better to shop for the financing, then shop for the car.
Maybe I'm approaching this wrong: are there any good sources for used car leases? It's probably better to shop for the financing, then shop for the car.
Former Vendor of MBWorld
Joined: Jan 2005
Posts: 583
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From: Cincinnati, OH
In any given month half the cars we lease are of the used variety.
Have you checked out our instant quotes on LeaseCompare.com?
Full disclosure on all programs are provided including money factors and residual values.
Let me know how this compares to what you are being quoted by the dealer.
Have you checked out our instant quotes on LeaseCompare.com?
Full disclosure on all programs are provided including money factors and residual values.
Let me know how this compares to what you are being quoted by the dealer.
