nvestr

Hi guys,

I'm in the process of finalizing my order for a C450 here in Canada. I am considering lease vs purchase.

Normally I lease, but with a 3.9% interest rate on a 39 month lease, I'm questioning whether I should simply throw it against my secured line of credit that I pay 2.2% on (Prime less half).

I'm just trying to do some math. By purchasing, I am on the hook if the vehicle ends up being worth less than the residual value promised by the lease. So I'm curious: are the residuals posted by MB a good estimate of future wholesale value of a vehicle or are the residuals artificially boosted to incentivize (is that a word?) potential lessees?

For example, 39 month lease with 18k km's per year has a residual of $38,524 right now - would a 39 month old 2016 C450 with 60k km's be worth that much?

I look at 2013 C350's and they are selling in the mid to high 20's. I know the C-Class has moved up in rung in the lineup so may not be the best comparison...

Either way, I will get rid of the vehicle before end of warranty, so the 39 month mark seems appropriate...

THoughts?

LateC300

interest on a lease? weird...

stolenfire

I'm in the same boat....dealer quoted me 63% residual in the GTA and I'm debating whether to finance @ 1.90% or to go forward with the lease at 3.90%. The only downside with leasing is the admin fees at the beginning which brings my downpayment from 4k to around 9k (this includes shipping and dest.)

Personally, I think 63% is definitely not low for a C450 appraisal after 39 months.

nvestr

In Canada, interest rates are quoted on leases instead of money factors. Makes me more sense than trying to decypher money factors, IMO.

LateC300

ah interesting, good point, i didnt think about that

DerekACS

The current Canadian Black Book value for a MY2013 E Class /E350 4Matic is only $37K max for one in excellent condition & 60,000 km. So, the quoted residual of $38,524 for a 39 month old C450 seems high to me. This figure might be a high retail asking price for a loaded car, in excellent condition and with low kms, certainly not the projected wholesale or trade-in value, likely to be $5-6K less.

If you are only going to keep your car for 3 years, you are probably better off to lease it. Then, the resale value would be of no consequence for you. However, before making up your mind, you should add up the total cost of borrowing for both the 39 month lease contract (3.9% interest, admin fees, non-refundable costs) and the finance contract (interest 1.9%, admin fee) for the same period of time.

Volkov

For once, we are being offered very favourable lease terms. Lacking a local dealer I chickened out, but The lease deal was a no brainer. If you plan to turn over the car, definately lease it. If you lease to try it out and then keep what you like and return what you don't , the equation is more complicated.

nvestr

Thanks guys - you seem to be confirming my suspicions.

The downsides of the lease is being forced to return with runflats, which are expensive as all hell. On a 39 month, 18k/year lease, I assume I will need to put new tires on to return... Unless I take the original run flats off while they are still good - put non-runflats for my use and then put the runflats back on to return the vehicle.

I`m guessing that I`d probably have 24,000 miles on the run flats at lease turn in (I will have winters 4 months out of the year). Any chance the Summer ContiSportContacts will last that long?

First-e320

I also ran the numbers on a lease or a purchase and with such a high residual, it is not worth purchasing unless you plan on keeping it for a long time..

I have a 2012 E350 48 month with 18" all season runflats that I will be returning at the end of the month and it has enough rubber to not be charged. The E350 is no C450, but its a heavier car and my daily drive takes it though 2 hairpin turns (that I enjoy executing without slowing down - fun!). I will be taking a new 39 month lease on the C450 with 18" all seasons, and I suspect those tires should last the lease term.

If you are looking at the 19" summer tires, my understanding is that they are 15000 mile tires at best. Spirited driving and cold weather driving will reduce this number. Its the cost to play at the edge, and for me, the 18" all season will take me sufficiently to the edge for my daily driver.

Volkov

Run flats have improved, but many still don't like them. A few years back it was very common for new BMW "owners" to put on the rubber they wanted as soon as they got the car and slap the oem RFs back on at lease return. Those who didnt wound up burning through the initial tires, then had to buy new RFs to replace them to add insult to injury. A good set of performance tires are still much cheaper than RFs anyway and usually give better ride and performance. Run flats have advantages, but they do not replace spares. Cannot understand why the manufacturers wont at least offer a donut as an accessory. Didn't MB used to do this in Euro market?