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Money factor reduction with Multiple Security Deposits?

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Money factor reduction with Multiple Security Deposits?

 
Old 08-04-2016, 01:03 PM
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SOLVED: Money factor reduction with Multiple Security Deposits?

My 2017 C-300 coupe should be ready for delivery in about two weeks. I am new to leasing and have contracted to lease this car. I understand that if one pays upfront multiple security deposits (up to nine,) each MSD will reduce the money factor a certain amount. I have heard that each MSD may reduce the MF by either 0.00007 or 0.00005. So as to make sure that the dealership doesn't short-change me, I was wondering if any here would know just what the reduction actually is (I live in Florida)?

EDIT: For each MSD made, the MF is reduced by 0.00007 and you can give up to 10 MSDs at lease signing. So, if you have cash around that isn't doing much, this is a great deal. Here's how it works: Each MSD = your monthly payment rounded to the nearest $50. So, if you are paying $549/mo, then each MSD will cost you $550. Mlutiplying this by 10, you have to come up with $5500 for 10 MSDs. All MSDs are returnable at the end of the lease. Your original MF (let's say 0.00121) is now reduced to 0.00051 (0.00121 - 0.00051). In terms of APR, the interest on the lease is reduced from 2.9% to 1.2% AND this amounts to about $3000 over the term of the lease. Truly an believable deal if one has cash that isn't doing anything in the bank or money market, eh?

Last edited by flycaster; 08-10-2016 at 12:35 PM.
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Old 10-30-2016, 10:09 PM
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Interesting. I was told previously by a local dealer that MB does not allow MSD. If anyone can confirm would be great.
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Old 11-08-2016, 08:06 PM
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FYI - MB does do MSD. Just closed on a leased with MSD.
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Old 02-03-2017, 10:57 AM
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I just picked up a new E300 and applied the 10 MSDs to reduce my monthly payment by $67.

IIRC, in NYS, MSDs are not permitted. Some silly state banking rules.
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Old 05-01-2017, 11:46 AM
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Quick Question....

When MSD payments are calculated, they're calculated at the pre-discounted MF. So if the normal MF is .00071, and you put 10 MSD each discounting it .00007, the MSD amount is calculated using the .00071 MF and then multiplying it by the 10 MSDs. Is the MSD amount pre-tax or post tax?
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Old 05-28-2017, 01:16 PM
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Originally Posted by Ah_gl450 View Post
Quick Question....

When MSD payments are calculated, they're calculated at the pre-discounted MF. So if the normal MF is .00071, and you put 10 MSD each discounting it .00007, the MSD amount is calculated using the .00071 MF and then multiplying it by the 10 MSDs. Is the MSD amount pre-tax or post tax?
Not sure if I understand exactly what you're asking so I'll run through a quick example using some of your numbers.

Let's say the vehicle sticker is $75,000 and you negotiate a selling price of $70,000. On a 36 month term, RV at 58% and MF at .00071 (which is 1.7%), the base payment would be $817/mo. How tax is handled depends on your state. Here in Mass, we would pay 6.25% tax on the monthly payment so it would be $868.

Continuing w/ the above example, doing 10 MSD's reduces the MF to .00001 (.024%). The new payment including tax is $783/mo. So putting down a refundable $8000 ($800 x 10) saves you $3,060 over the term of the lease.
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Old 08-27-2017, 08:41 AM
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Info for MSD

Originally Posted by KZEVO View Post
FYI - MB does do MSD. Just closed on a leased with MSD.


Hi Kzevo: I am planning to lease MB but dealership is pretending they dont know what is MSD. can you let me know which dealership in Orlando/Tampa area did you do your deal and how to work it out?
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Old 08-27-2017, 08:42 AM
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MSD in Orlando/Tampa Area

I am planning to lease MB but dealership is pretending they dont know what is MSD. can you let me know which dealership in Orlando/Tampa FL area did you do your deal and how to work it out?

Last edited by bilpamp; 08-27-2017 at 09:14 AM.
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Old 09-27-2017, 12:14 PM
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Originally Posted by skw View Post
Not sure if I understand exactly what you're asking so I'll run through a quick example using some of your numbers.

Let's say the vehicle sticker is $75,000 and you negotiate a selling price of $70,000. On a 36 month term, RV at 58% and MF at .00071 (which is 1.7%), the base payment would be $817/mo. How tax is handled depends on your state. Here in Mass, we would pay 6.25% tax on the monthly payment so it would be $868.

Continuing w/ the above example, doing 10 MSD's reduces the MF to .00001 (.024%). The new payment including tax is $783/mo. So putting down a refundable $8000 ($800 x 10) saves you $3,060 over the term of the lease.


Is the MSD given on top of the required down payment for the lease?
MB website says only up to one MSD.
Is a security deposit needed if I decide to lease a Mercedes-Benz? It's not required. However, Mercedes-Benz Financial Services does offer a Multiple Security Deposit program which allows you to lower your monthly payments by including up to 1 refundable security deposit in your lease (not available in all states).

Last edited by nadz; 09-27-2017 at 12:17 PM.
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Old 09-27-2017, 12:23 PM
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Thank you for your reply. If you dont mind can you let me know what location is this and also can you share more details on the car and lease calculations you were able to get it for?
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Old 09-27-2017, 12:29 PM
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Originally Posted by bilpamp View Post
Thank you for your reply. If you dont mind can you let me know what location is this and also can you share more details on the car and lease calculations you were able to get it for?


Hi,
I am in Miami-Fort Lauderdale Florida and I am thinking of doing the Pull Forward program between Feb and June of 2018. My lease is up in Nov 2018. I have a 2015 c300 and I am not sure what to get next.


I have my eye on the GLC300 or the Coupe or the e class.
I use to have the 2010 E-class. Just a little history.

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Old 01-09-2018, 12:53 AM
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Originally Posted by nadz View Post

Hi,
I am in Miami-Fort Lauderdale Florida and I am thinking of doing the Pull Forward program between Feb and June of 2018. My lease is up in Nov 2018. I have a 2015 c300 and I am not sure what to get next.


I have my eye on the GLC300 or the Coupe or the e class.
I use to have the 2010 E-class. Just a little history.
We are in a similar situation. I have a e350 maturing next month and want to upgrade now into a GLC coupe. I drove both the 300 and 43 variants. The 43 is the obvious choice however most are spec-ed out with a long list of add-ons pushing the payments to $1000-$1100/month with 10 MSD's and minimal down payment. The 300 coupes are leasing in the mid-upper $600's, $12k less over the course of 36 payments.
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Old 02-13-2018, 06:16 PM
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MSD's are allowed on Mercedes Benz leases'. Don't listen to the fools. If you do 10MSDS it lowers your money factor by 70 base points. Note: There will be a minimum MF cant be zero. Each class will vary
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Old 12-12-2018, 12:25 AM
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Originally Posted by DTLAMBZSalesGuy View Post
MSD's are allowed on Mercedes Benz leases'. Don't listen to the fools. If you do 10MSDS it lowers your money factor by 70 base points. Note: There will be a minimum MF cant be zero. Each class will vary
Brian, does MSD affect dealer profit/salespeople's commission? If not, how do you maintain profit margin when using MSD?
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Old 12-12-2018, 11:14 PM
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MSD by themselves do not have any direct impact on commission. It’s when lease rates (money factor) is marked up that causes an increase in backend profit - this applies to any lease with or without MSD. MSD buy the rate down thereby decreasing your lease payment and the rental income collected by MBFS. Dealer profit is not affected. In turn, MBFS gets to play with your money (MSD) for 36 months for investment purposes.

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Old 12-13-2018, 06:58 AM
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Originally Posted by DTLAMBZSalesGuy View Post
MSD's are allowed on Mercedes Benz leases'. Don't listen to the fools. If you do 10MSDS it lowers your money factor by 70 base points. Note: There will be a minimum MF cant be zero. Each class will vary
Arent MSD like your monthly payment 6 to 10 months worth?
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Old 05-12-2019, 04:34 AM
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MB does do MSD. I believe NY is the only state that doesn't do MSD
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Old 05-12-2019, 06:44 PM
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NOOOO... MSD (MULTIPLE SECURITY DEPOSIT) is money you get back after your lease is up. It doesn't go towards your payments. It sits in an account and mb gets to play with your money and in return knocks down your MF or interest rate down.
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