$560 All In / Zero Down What Do You Think?
12-14-2007, 08:30 PM
#26
Junior Member
Join Date: Mar 2007
Posts: 45
Likes: 0
Received 0 Likes
on
0 Posts
very interesting discussion...
on a 60mo lease upfront payment, I would have to pay about $21k (after taxes) for the car and if the msrp is $35k, its residual value (at 45%, 15k mi/yr) would be $15,750. If within a year I total it and the insurance company values it at $25k then I am sure the leasing company would simply get their residual back ($15,750) since I already paid all the payments upfront but I would only get back the difference in the insurance payment and the residual, which would be $9250....compared to the $21k I actually paid!!
I wonder, is there even a need for gap insurance when somebody pays for the entire lease upfront? No matter what the insurance company wil surely value the car for atleast the residual price the leasing company thought it to be worth in the FUTURE (even if on a 60 mo lease on the 59th month the car is worth more than in the 60th mo), right? If nothing else, the gap insurance should only kick in during the final 12 mos because that's when the difference between the car's residual value and the insurance payment may come to a loss for the dealer. And if indeed the leasing company doesnt need gap insurance on an upfront paid lease other than for the last few months, than the lease should be significantly cheaper than a regular lease....cheaper than simply the money factor effect decreasing the price....right?
on a 60mo lease upfront payment, I would have to pay about $21k (after taxes) for the car and if the msrp is $35k, its residual value (at 45%, 15k mi/yr) would be $15,750. If within a year I total it and the insurance company values it at $25k then I am sure the leasing company would simply get their residual back ($15,750) since I already paid all the payments upfront but I would only get back the difference in the insurance payment and the residual, which would be $9250....compared to the $21k I actually paid!!
I wonder, is there even a need for gap insurance when somebody pays for the entire lease upfront? No matter what the insurance company wil surely value the car for atleast the residual price the leasing company thought it to be worth in the FUTURE (even if on a 60 mo lease on the 59th month the car is worth more than in the 60th mo), right? If nothing else, the gap insurance should only kick in during the final 12 mos because that's when the difference between the car's residual value and the insurance payment may come to a loss for the dealer. And if indeed the leasing company doesnt need gap insurance on an upfront paid lease other than for the last few months, than the lease should be significantly cheaper than a regular lease....cheaper than simply the money factor effect decreasing the price....right?
12-14-2007, 08:35 PM
#27
Junior Member
Join Date: Mar 2007
Posts: 45
Likes: 0
Received 0 Likes
on
0 Posts
well, if you are interested in 60 months, I think they have a 1.9% purchase finance offer now..I would never lease a car for 60 months, unless it had a bumper to bumper warranty, which this one does not..Plus, its the first year of a new model, so I would be concerned about what changes they will make in 2 or 3 years that I would want to get out of my lease in time for..
I dont remember what the residual is after 27 months, but I suppose you could figure it out..probably around 65% or so...Dont forget, the benz lease only allows 10,500 miles per year, so the residual will be higher than what is listed at leasecompare, since their's is based on 15,000 per year..
I dont remember what the residual is after 27 months, but I suppose you could figure it out..probably around 65% or so...Dont forget, the benz lease only allows 10,500 miles per year, so the residual will be higher than what is listed at leasecompare, since their's is based on 15,000 per year..
As far as leasecompare is concerned, you're right in that their residuals are based on 15k mi/yr and that if I go for lower mileage options than my residuals will be higher (which is good)....but I plan to drive those 15k mi/yr so that is why i am calculating it with leasecompare's residuals.
12-14-2007, 09:02 PM
#28
Member
Join Date: Nov 2007
Location: outside chicago
Posts: 75
Likes: 0
Received 0 Likes
on
0 Posts
2008 c300 luxury, P2, MM, Capri Blue Metallic
I still dont know why you would lease this thing for 60 months..if you want it that long, I would just do the 1.9% financing program they are offering,,
and, yes. OBLU, i have leased many cars and I NEVER do a "cap cost reduction" or down payment, for that exact reason..if your credit it top notch, they will just roll the taxes and such into your monthly or one time payment..Leasing works best when you put as LITTLE into a vehicle as possible...
and, yes. OBLU, i have leased many cars and I NEVER do a "cap cost reduction" or down payment, for that exact reason..if your credit it top notch, they will just roll the taxes and such into your monthly or one time payment..Leasing works best when you put as LITTLE into a vehicle as possible...
12-15-2007, 10:23 AM
#29
Member
Join Date: Sep 2007
Location: MIAMI VICE CITY
Posts: 180
Likes: 0
Received 0 Likes
on
0 Posts
I own 2008 C-350 2008 E-350 2005 C -230 Kompressor 2006 FORd F-350 6.0
I would have bought the car for that payment and kept equity in my pocket i never you throw out money you know ...
12-17-2007, 01:13 AM
#30
Junior Member
Join Date: Mar 2007
Posts: 45
Likes: 0
Received 0 Likes
on
0 Posts
even at 1.9% financing and a 60 month payment plan if I buy it my payment comes out to $673.49 (even if I buy it at only $500 above invoice + tax (7%) = 38,520). The total sum of my payments comes out to $40,409.40 ($673.49 x 60).
At the end of the five years, I may be able to sell the car (a 5yr old c-class w/ 75k miles w/o warranty) for $13k (based on the current trade-in value for a 75k miles 5yr old (2003) c320 sedan). This represents a loss of $27,409.40 ($40,409 that I paid over the 60 mos minus the $13k I sell it for).
On the other hand, as mentioned previously, assuming I still get it for the same 500 above invoice, on a 60mo lease I would pay (after taxes) only $21,186. That is much lower than the $27,409.40 I would loose if I bought the car and sold it after driving it the same number of miles the lease would allow. That's a difference of $6223.
Even if you count in time value of money (@6%, minus 30% taxes = 4.2%), if I put in that $21,186 in an account that earns an after tax return of 4.2% and simply withdraw my monthly payments for my car loan of $673 from it I would eventually end up exhausting the account and paying in an additional $18,875 into the car loan. And, as stated earlier, I would only sell it for $13k so my net loss would be $5,875 compared to leasing the car for 60mos and paying it all upfront. (not to mention not having to worry about selling the car...however that is probably balanced out with the worry of larger dings and scratches and such costing money at the end of the lease).
Let me know if my analysis is incorrect, before calculating it I myself didn't expect the difference to be as large!
Ofcourse my dilemma now is the insurance thing....what if I total the car in less than a year! That would suck! Is there gap insurance I can buy to protect MYSELF?
Another good point is the warranty, its only 4yr 48k miles right? that's another reason why I shouldn't be thinking about a 5yr lease, but I another rason why I am really considering the 5yr lease is because I am planning to sell the lease after 3yrs to somebody for $8k...and I am sure I can find somebody easily (who wouldn't want to drive a 3yr old but still new body style c-class for 2yrs/30k miles for only $333?!)
At the end of the five years, I may be able to sell the car (a 5yr old c-class w/ 75k miles w/o warranty) for $13k (based on the current trade-in value for a 75k miles 5yr old (2003) c320 sedan). This represents a loss of $27,409.40 ($40,409 that I paid over the 60 mos minus the $13k I sell it for).
On the other hand, as mentioned previously, assuming I still get it for the same 500 above invoice, on a 60mo lease I would pay (after taxes) only $21,186. That is much lower than the $27,409.40 I would loose if I bought the car and sold it after driving it the same number of miles the lease would allow. That's a difference of $6223.
Even if you count in time value of money (@6%, minus 30% taxes = 4.2%), if I put in that $21,186 in an account that earns an after tax return of 4.2% and simply withdraw my monthly payments for my car loan of $673 from it I would eventually end up exhausting the account and paying in an additional $18,875 into the car loan. And, as stated earlier, I would only sell it for $13k so my net loss would be $5,875 compared to leasing the car for 60mos and paying it all upfront. (not to mention not having to worry about selling the car...however that is probably balanced out with the worry of larger dings and scratches and such costing money at the end of the lease).
Let me know if my analysis is incorrect, before calculating it I myself didn't expect the difference to be as large!
Ofcourse my dilemma now is the insurance thing....what if I total the car in less than a year! That would suck! Is there gap insurance I can buy to protect MYSELF?
Another good point is the warranty, its only 4yr 48k miles right? that's another reason why I shouldn't be thinking about a 5yr lease, but I another rason why I am really considering the 5yr lease is because I am planning to sell the lease after 3yrs to somebody for $8k...and I am sure I can find somebody easily (who wouldn't want to drive a 3yr old but still new body style c-class for 2yrs/30k miles for only $333?!)
12-17-2007, 01:49 PM
#31
MBWorld Fanatic!
12-17-2007, 11:45 PM
#32
Junior Member
Join Date: Mar 2007
Posts: 45
Likes: 0
Received 0 Likes
on
0 Posts
i think the reason the one pay lease option even on a 60 mo lease was working for me because I wasn't the calculations right.
Unlike what has been suggested on this thread, on a one pay lease you do not simply pay the difference between the final negotiated price (plus any fees) and the residual price at the end of the lease term. You ALSO have to pay the interest on the final negotiated price for as long as you have the car. So I would have to pay interest on $36,000 on the money factor rate for 5yrs if I had the car for 5yrs...or something like that, but its not just final negotiated price minus residual price equals the one pay lease amount.
It would be a dream if it was.....and if the gap insurance that is included in it actually covered the one-pay lease just like a regular lease as if I was making monthly payments (as in...if after the second month I total the car, I am only out two months' of lease payments because that's what I actually drove the car for and nothing else, so for the one-pay lease, I would get the money back for the remainder of the term)
correct me if I am wrong in the one pay lease payment assumption....and can somebody finally shed some light on the one pay lease gap insurance dilemma...I want to figure this thing out once and for all!
thanks in advance
Unlike what has been suggested on this thread, on a one pay lease you do not simply pay the difference between the final negotiated price (plus any fees) and the residual price at the end of the lease term. You ALSO have to pay the interest on the final negotiated price for as long as you have the car. So I would have to pay interest on $36,000 on the money factor rate for 5yrs if I had the car for 5yrs...or something like that, but its not just final negotiated price minus residual price equals the one pay lease amount.
It would be a dream if it was.....and if the gap insurance that is included in it actually covered the one-pay lease just like a regular lease as if I was making monthly payments (as in...if after the second month I total the car, I am only out two months' of lease payments because that's what I actually drove the car for and nothing else, so for the one-pay lease, I would get the money back for the remainder of the term)
correct me if I am wrong in the one pay lease payment assumption....and can somebody finally shed some light on the one pay lease gap insurance dilemma...I want to figure this thing out once and for all!
thanks in advance
01-10-2008, 04:33 PM
#33
MBWorld Fanatic!
Join Date: Mar 2005
Location: sac, calif.
Posts: 1,164
Likes: 0
Received 0 Likes
on
0 Posts
'06 slk55
I find all this leasing info interesting.
So, I have a question. Caution, this applies to a completely different vehicle. I just need a short mileage daily beater. I think the Mini Cooper would be a great vaue. Here are the details:
MSRP $21700
Invoice $19500
.00250 MF
79% residual = $17143
36 mos @ 12K miles
Assuming I can get a cap cost @ $20000. My figures show payment of $211.89. That's a monthly depreciation of $119.xx and interest of $92.xx
Does this one time payment work with any manufacturer/bank? If so, then I would simply pay the depreciation of $2857 (20000-17143) plus tax? Am I doing this right? If so, that's a steal!
So, I have a question. Caution, this applies to a completely different vehicle. I just need a short mileage daily beater. I think the Mini Cooper would be a great vaue. Here are the details:
MSRP $21700
Invoice $19500
.00250 MF
79% residual = $17143
36 mos @ 12K miles
Assuming I can get a cap cost @ $20000. My figures show payment of $211.89. That's a monthly depreciation of $119.xx and interest of $92.xx
Does this one time payment work with any manufacturer/bank? If so, then I would simply pay the depreciation of $2857 (20000-17143) plus tax? Am I doing this right? If so, that's a steal!
