heat010

Want your guys advice. I've always kept the cars I have. But I wondered what you guys think of financing versus lease to own.

The lease to own option would be advantageous in terms of a lower monthly payment and I would have the option to finance the residual balance. I was thinking of a 48 month term. I don't drive too much so I think I can stay under the 12K/year restriction.

However if I finance I was thinking of getting a loan for the balance through Peoplefirst Bank at 5.99% for 60 months.

I think the set up with C5, C7 with tax and everything will be 33K. Man they're charging $950 for a cd changer. What a rip!! I'm going with your guys route of ordering it for $399 on the web, and having Mercedes install it. They told me that it would be covered under warranty as long as its a Mercedes unit.

Any of your advice is appreciated. Thanks for all your opinions.

Flashman

You might want to take a look at a 72 month loan. It's a year longer than typical loans, but it tends to come very close to the lower monthly payments of a lease. It may be just what you are looking for.

For comparison. If you were leasing to own. You'd most likely get a four year lease. Then once it was up, still owing over $10K, you'd most likely get a used car loan with similar payments, which is around three years. That's seven years total, one year more than a 72 month (6 year) car loan.

Check out
http://www.peoplefirst.com/ (you already found it, but repeating it for others)
and
http://www.leasecompare.com/

Respectively, those are the best car loan and car lease web sites I've found.

BTW, if you are leasing to own, you can say 'screw the mileage', as you will be buying the vehicle. Bank or dealer wont care how much you drove it. It will only have a negligible impact on the car's value at the end of the lease when it comes time to put a used car loan on it.

C230K

I bought the CD changer on the web and had the MB dealer install it. Was told that the 50,000 mile warranty for CD player installed at the factory only. The web gave you one year. You might want to double check and make sure. It still a lot cheaper> Tom

vinmanc32

If you want to ultimately own the car, then it is always going to be cheaper for you to finance it over 60 months versus lease it with option to purchase. I chose the latter because I did not want my money in the car. Im willing to pay more in the long term to keep my money now. I also am not absolutely certain Im going to want to keep the car after three years. Possibility that the next model or E55 replacement, will be more exciting. But, if you know you are going to keep it, then take the route that your finances dictate and cost you least.

Bud

As the others have said, the more years you drag it out, the more it is going to cost you. A cheap loan now for longer years is going to cost less then a cheap loan now for 4 years and then a more expensive used-car loan for three years.

But, that does not mean you should not lease-to-own. You should consider other debt and goals you have. If you have other debts that are at much higher interest rates (e.g., a charge card balance), then you might choose the lease-to-own since it will give you lower car payments for a few years which frees up money to pay on the higher interest debts. The interest rate on new and used cars is almost always far less than any credit card or pesonal loan (unless you're really young or have bad credit).

Also, if you need to save for a down payment on a house or save for some other purpose, the lease-to-own will free up more money to put into that savings acct.

When I bought my 99 ML320 in the fall of 98, I did a 3-yr lease-type baloon loan from my credit union (all the benefits of leasing, none of the fees). After three years I then refinanced the remaining balance. This gave me the chance to be sure I wanted the vehicle, with the ability to walk away if it were a lemon (turns out we love it and kept it). More importantly, we were going to be redoing our kitchen, so I wanted the lower car payments to free up money for that project. I was able to pay for the kitchen makeover in cash (I didn't want to go the home equity route).

I've made it a goal of mine to never pay interest on anything but my house and my cars (because they are so expensive). I absolutely hate giving charge card companies 10% interest. I hated it worse when I was younger and made a lot less and was paying them 18%.There's nothing I want or need bad enough to make me pay them those rates.

Buellwinkle

The lease does take the risk of poor resale value out of your hands. Depending on how the coupes are treated 4 years from now in the resale market and how bad or good the economy is will determine if you did the right thing or not. The BMW 318Ti coupe has done very well in the used market in comparison to it's more expensive siblings relative to price paid. Personally I would just do a 5 or 6 year loan at today's very low interest rates, you may not see those rates again. Also take into consideration all the fees you have to pay if you turn your car in. They hit you for a turn in fee, excess mileage fee, make you do the brakes/tires if there's less than half life in them, you'll have to repair any damage to the interior/exterior that you may consider minor but they may consider excessive wear. In the past you can get great lease deals that caused banks to lose money but they figured it out and you can't get those great lease deals anymore. The biggest lease scam I've seen lately is the 39 month lease. At least in CA where the registration fees are very high this forces you to pay for a full year ($500-600) for only three months use.