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Lease End Options (thinking ahead)

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Lease End Options (thinking ahead)

 
Old 01-17-2009, 11:12 AM
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Lease End Options (thinking ahead)

I did a short-term lease with this car, finally recognizing the fact that it does not take long for me to get tired of a car. So I thought a 24 month lease would be perfect. It's then ironic that this is the one car I'd probably like to keep.

This got me thinking about the lease-end buyout option and saving up for a considerable down-payment on a purchase loan at the end of the lease. My W204 has every option except leather, so it's pretty well equipped. The buyout price at the end of the lease (October 2009) is about $30K. I've been doing some research on cars.com and on a friend's Mannheim auction account. It looks like the car won't be worth $30K at the end of the lease. So, from a financial perspective, leasing was a good move.

This got me thinking about whether Mercedes-Benz Financial will negotiate with you at lease-end, or are you bound by the lease's buyout price, even if they'll take a loss sending the car to auction when you turn it in?

I'm just curious. I know that I have a lot of time to think about this. But if I buy it, I'd like to start saving up a considerable down payment. But if I'm going to just turn it in, I'm really not going to worry about that.

Has anyone had any experience trying to negotiate a different buyout with MB Financial at the end of the lease?
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Old 01-17-2009, 03:01 PM
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Originally Posted by Kieffer View Post
I did a short-term lease with this car, finally recognizing the fact that it does not take long for me to get tired of a car. So I thought a 24 month lease would be perfect. It's then ironic that this is the one car I'd probably like to keep.

This got me thinking about the lease-end buyout option and saving up for a considerable down-payment on a purchase loan at the end of the lease. My W204 has every option except leather, so it's pretty well equipped. The buyout price at the end of the lease (October 2009) is about $30K. I've been doing some research on cars.com and on a friend's Mannheim auction account. It looks like the car won't be worth $30K at the end of the lease. So, from a financial perspective, leasing was a good move.

This got me thinking about whether Mercedes-Benz Financial will negotiate with you at lease-end, or are you bound by the lease's buyout price, even if they'll take a loss sending the car to auction when you turn it in?

I'm just curious. I know that I have a lot of time to think about this. But if I buy it, I'd like to start saving up a considerable down payment. But if I'm going to just turn it in, I'm really not going to worry about that.

Has anyone had any experience trying to negotiate a different buyout with MB Financial at the end of the lease?
Yes, we just went through this with my wifes 2006 E350. The buy back at lease end was $34K. Similar E350's going for $20's with Certified warranty. When I contacted Mercedes Financial they told me I could buy our car for only $30K! That's about $5K more than current market price. Needles to say we turned it in and bought our C350. If you contact them they will spell it all out for you. Hope this helps, good luck.
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Old 01-17-2009, 06:48 PM
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Originally Posted by G-10 View Post
Yes, we just went through this with my wifes 2006 E350. The buy back at lease end was $34K. Similar E350's going for $20's with Certified warranty. When I contacted Mercedes Financial they told me I could buy our car for only $30K! That's about $5K more than current market price. Needles to say we turned it in and bought our C350. If you contact them they will spell it all out for you. Hope this helps, good luck.
This is amazing. I was just talking to a co-worker about this on Friday. I have never leased a car before. He advised me that Toyota offered to sell his Sequoia to him for about $4,000 less than the residual. I started to wonder if MB will do the same. Anyway, I plan to keep my W204. I did a one-pay lease (paid one big payment and have no payment until the lease is over in March 2010). At the end of the lease, I can buy it for the residual, $24,750.00. If I understand you, I can further negotiate the residual to a lower amount? If so, this is good news. I guess MB prefers not to take the car back. Especially in my case because it is a 6MT.
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Old 01-18-2009, 12:37 AM
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In this current economy, near the end of your lease, talk to MB Financial, let them know you will return the car, but if they give you a lower than your buy-back price, you will purchase it. MB and most car companies rather you buy the car than to go to auction.
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Old 01-18-2009, 07:57 AM
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MB would rather take the hit at the auction and get you into a new MB product because there is more money on new than to buy out the lease. MB Financial doesn't "negotiate" off the residual however sometimes MB USA will offer a market adjustment on certain models. MB Financial will let you know if there is any market adjustments off your particular model.
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Old 01-18-2009, 10:01 AM
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If you don't mind me asking, what were you paying per month on a 48 month lease. This seems like a great idea for my father, who goes through cars so quickly.

thanks! It seems like MBFS should be negotiating the buy-out price though, especially in this economic condition. If they don't, maybe you could just get another C350
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Old 01-18-2009, 10:42 AM
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Originally Posted by K Andersen View Post
MB would rather take the hit at the auction and get you into a new MB product because there is more money on new than to buy out the lease. MB Financial doesn't "negotiate" off the residual however sometimes MB USA will offer a market adjustment on certain models. MB Financial will let you know if there is any market adjustments off your particular model.
That's what I thought. Selling a new one is more important to the short-term bottom line. I've always heard that MB Financial gets such favorable lease terms by inflating residuals. I wonder if that practice will continue with the economy and the drop in used car values.
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Old 01-18-2009, 01:23 PM
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I'm still gonna try to negotiate the price.

If they don't go for it, maybe I'll just return the car and make the dealership an offer a couple days later. I know a 6MT isn't going to move in this area. My salesman didn't even want to order a 6MT.

Last edited by Derspeed; 01-18-2009 at 01:26 PM.
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Old 01-20-2009, 12:38 PM
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Good News!

We just received our security deposit from Mercedes Financial. It only took about two weeks. Received total minus $595. Return fee. My neighbor told us his took 6 weeks.
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Old 01-20-2009, 12:59 PM
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My mom's lease on her 2005 E320 was up in September and the residual on it was $34k. Mercedes contacted her with about 3 weeks to go and asked if she was going to keep it. She replied by stating she wasn't sure, that the buyout seemed kind of high and asked if they had any deals going on for it. The dealer automatically dropped the price by $5k and said "What do you think?". She said she still wasn't sure and that she'd need some time to think about it. Mercedes called again with one week remaining and asked if she had made a decision. My mom stated that she still wasn't sure and if there were any more deals going on. The dealership responded with "As a matter of fact, we can drop the price by another $5k." After a quick discussion she decided to take the deal and received the car for $10k below the residual.

Lessons learned: Be patient! Wait until they call you to ask if you're going to keep the car. Always make it seem like you're leaning against keeping it, and see if they have any deals going on at the moment. If they say not at the current time (although they always did when we asked) I would keep them waiting, time permitting. If they don't budge on the residual then as a last ditch make it seem as if you'll walk. The one who is willing to walk away will always win the negotiation. There are enough opportunities out there in this market that walking away isn't necessarily a bad idea.

Best of luck!

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Old 01-20-2009, 03:13 PM
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Originally Posted by VicC350 View Post
The dealer automatically dropped the price by $5k and said "What do you think?". She said she still wasn't sure and that she'd need some time to think about it. Mercedes called again with one week remaining and asked if she had made a decision. My mom stated that she still wasn't sure and if there were any more deals going on. The dealership responded with "As a matter of fact, we can drop the price by another $5k." After a quick discussion she decided to take the deal and received the car for $10k below the residual.


Lessons learned: Be patient! Wait until they call you to ask if you're going to keep the car. Always make it seem like you're leaning against keeping it, and see if they have any deals going on at the moment. If they say not at the current time (although they always did when we asked) I would keep them waiting, time permitting. If they don't budge on the residual then as a last ditch make it seem as if you'll walk. The one who is willing to walk away will always win the negotiation. There are enough opportunities out there in this market that walking away isn't necessarily a bad idea.

Best of luck!

Victor
Exactly!
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Old 01-21-2009, 01:37 AM
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Buy out is $30k...the car's resale is less than that right now...not to mention a base new GLK starts at $33k...which means that you could most likely get a nicely equipped C for around that price as well, specially if you stop in around left over time.
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Old 01-21-2009, 01:09 PM
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Originally Posted by chilledbenz View Post
Buy out is $30k...the car's resale is less than that right now...not to mention a base new GLK starts at $33k...which means that you could most likely get a nicely equipped C for around that price as well, specially if you stop in around left over time.
I think some were mentioning not buying it out right now, but waiting until the end of the lease and trying to buy it for less than residual.

However, the money factor is so bad on my lease that I might go ahead and buy out now, and save about $5k in interest.
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Old 01-21-2009, 08:55 PM
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I had 5 payments left on my lease and just made a great deal on a new C350, fully loaded. MB will write off your last 5 payments and personally, I love to lease because I can't stand to have a car for more than 3 years anyway. Since you're in Colorado, you ought to check out MB of Lindon, UT. PM me and I'll put you in contact with my guy. They've taken excellent care of me and my friends for the past 3 years. If you want a W204 they're making great deals on them right now becuase they just don't move in the Winter.
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