Hi guys,

My second post on the forums - looking forward to getting into a C-class soon when my current lease matures. I am thinking C450 IF the pricing is reasonable and if the dealer is willing to discount to an appropriate level.

I have been pricing out vehicles online here in Canada and the Mercedes seems to lease for much less than a comparably priced BMW 3 or 4 series. Interest rates are close (2.9% BMW, 3.9% Mercedes), mileage allowance very similar (BMW has 20000 km whereas MB has 18000 km per year), 39 months for both, etc. The C-class seems to price in substantially lower ($100-200 less per month, before taxes).

If purchase price is close and interest rate is close, it has to mean that the residual is much higher on the Merc for the lease to be less. That being said, based on some google searches, most people seem to agree that BMW should have higher residuals (at least in the US).

Is this a phenomenon that others have noticed in Canada? I find BMW's to have terrible lease deals, which is not what most people from the US say. Here is an example based on online calculators at full MSRP:

BMW 335i xDrive with Prem PAckage - MSRP $57,500, lease payment for 39 month lease with 0 down : $866 per month, plus taxes.

Merc C400 4Matic with Premium PAckage + Real Leather + Ash Wood Trim - MSRP $58,140, lease payments for 39 month lease with 0 down : $759 per month, plus taxes.

The Merc has higher MSRP, higher interest rate (3.9% vs 2.9% for BMW, in CAnada it's not called a money factor, it's an annual interest rate in percentage), but 2000 less km's per year. Both payments include Freight and PDI...

BMW is $107 more per month... with taxes, the BMW is $122 more per month. Also, right now in Canada, first 3 payments are free on the Merc.

So either things are grossly different in CAnada vs the US, or the calculators are not accurate... Thoughts?

 

In my experience here in California, MB's have a lot more incentives to allow the capital cost (actual purchase price) to be much lower than BMW.

We've visited several BMW, Audi, MB dealers, and most BMW/Audi dealers are pretty stiff on pricing while MB dealers easily gave 10% or more off C/E/GLK class vehicles (some even came close to 20% off).

So that can easily explain the difference in payment. $107/month is $4,173 over 39 months, so that's about 7% off the MSRP of a $59k vehicle

 

Thanks for the reply - good to know about the discounts. That being said, the calculations were ran at full MSRP, so no discount was applied to either vehicle... That will definitely have an effect in the end once negotiations are underway, but it doesn't explain the large difference at 0% discount .

 

I think residual value could affect the payment (slightly). I've been shopping GLK's lately for the wife and found MB is quoting 60% residual while BMW is quoting 55% or less on the X3 for same terms (36 or 39 months, 10k/miles a yeaer)

A 5% difference in residual may be part of the difference in your monthly payment numbers.

 

The high residual value is the reason why I got this car. You can't beat 64% after 39 months anywhere, it's unheard of.

 

High residuals are good if you just want to lease forever I guess.

 

High residuals are done by the manufacturers to keep people leasing.

If, over a 10 year run you are only paying $150 more a month to lease, always have a new vehicle, always have the latest tech and safety features.... for a lot of people this is considered chump change and well worth the price vs buying, dealing with an older car that needs maintenance, car being out-dated etc.

 

I didn't lease my 2011 BMWZ4 but the original sticker was $57K. It was appraised four years later excellent condition with 47,000 miles at $22K. That's just over a 61% loss

 

I too have a Z4 and its for the above reason I'm loathe to sell it because it's a perfectly good car.

 

The Z4 was my down payment on the W205. I was hoping to get at least $30K. I brought it to CarMax and three different MB dealerships and they all came in between $21K and $22K. I was horrified!