Mike5215

This is a spreadsheet I use to build lease deals rather than relying on the dealer's "monthly payment figure." The spreadsheet lets you plug in the variables (fields highlighted in yellow) and returns a breakout of your monthly payment. It entirely removes the voo-doo aspect of trying to get a straight answer from the dealership as to how, to the dollar, they got their number.

It also makes it impossible for the dealer to front load the lease amount with extra stuff you didn't ask for. It generates a variance number to show how far apart the spreadsheet payment amount differs from the dealer's quote.

Presently, using the MBUSA lease calculator as a control, I'm within less than $15/month from their quote. To get that number, I had to bump up the Residual on the 36 month lease from 58% to 59%.

Using The Tool

I prefer to work these numbers from home or work rather than at the dealership. It removes emotion and allows me to set the pace of negotiations. 99% of the deal is already built before I show up at the dealer. To do this, you do need some info from the dealer:

MSRP of the car (The Federal Mulroney Sticker. I won't pay for any other items the dealer tacks on to the Mulroney)

Value of your trade. Actual hard number, not an "allowance". I start the deal by getting the trade appraised. I know the rough NADA/KBB clean wholesale figure going in. If they come in low, I ask them to come up. If they don't come up, I may be done with them. They're trained to use a "4 square". It's a worksheet with four boxes. It allows them to move money around to either make it look like their giving you more for the trade, or a bigger discount off MSRP...whatever seems the most important to you, when in reality their profit stays the same. Not interested in 4 Square. I don't even read it. I want a hard wholesale number, because in reality, all a dealer will ever pay for your trade is wholesale. I do not enter into discussions on the new car until the trade value is established.

I don't do the trade appraisal and the new car deal in the same visit. I'll get the numbers for everything and handle the rest by email.

Residual percentage based on the number of months you're leasing and the mileage per year you're buying.

MB Financial's current Money Factor on leases.

The dealership's prep fee, the loan acquisition fee, and any statutory shop fees (tire and battery disposal etc), and the tag/title fee.

The amount of any discounts off MSRP, including lease cash or any other incentives. It seems like locally at least, 6% off is the first offer I get from a dealer when requesting an "E Price". There's probably more room than that, but minimally I'd expect 6%.

You can do the deal two ways. You can simply ask the dealer for a quote on the monthly payment (including lease term, residual percentage and mileage) and see if their number beats the spreadsheet, at which point you don't need the spreadsheet.

You can do a work up on the spreadsheet yourself first with what you'd like off MSRP and send the spreadsheet to the dealer as a hard offer. Either way, I don't show up at the dealership before my number and their number lines up. They want you there, full of emotion and excitement, distracted. There is no advantage to you whatsoever to "just come on in and we'll sort it out!". This is a non negotiable item for me.

I strongly recommend that you take your laptop and charger into the dealership and work the deal "live". Things can change...you may buy a service contract you hadn't thought of for example...and the spreadsheet allows you to recalculate on the fly.

Despite having a locked deal on the spreadsheet, occasionally once I'm at the dealership something will quash the deal (like their numbers changing) and I'll fold up my tent and hit another competing dealership or two. Or seven. In that case, the whole deal has to be built on the fly in real time, and I have to do the sales guy bit.

Sales Floor

The sales floor is typically set up with a greeter (say "hi" and keep walking), a front line sales rep, and a sales manager. The psychology here is that the sales guy is your new best friend, and he's got to get you the very best deal ever by arguing on your behalf with the sales manager, who lives in a glass walled castle far away from the riff raff. I do not play along. If (and when) the sales guy walks into the glass castle, I'm behind him with my laptop. I'll just go, shake the guys hand and sit down at his desk, and then its just him and me. Once the sales manager realizes you're a sophisticated buyer, and the moment you start crunching residuals and money factors that becomes clear, they're usually really easy to deal with.

Once the deal is built to your satisfaction, it's time to get handed off to the Finance & Insurance rep. Your biggest obstacle to getting the payment you want is the F&I guy. They come across as gentle bankers and title clerks, far removed from the back and forth of the deal. They want to be your friend. Not the case. They are commissioned just like the sales team. They make money two ways:

They sometimes will pad the interest rate over what the bank is charging you based on your credit. The overage goes back to the dealer as profit.

They sell extra warranties... Excess Wear & Tear, Wheel Protection, Prepaid Service. Let me cover each of these:, but first, and this is extremely important:

THE LAMINATED SALES BROCHURE LISTING THE VARIOUS LEVELS OF PROTECTION IS NOT THE CONTRACT. YOU WILL BE BOUND NOT BY THE LAMINATED BROCHURE, NOR BY ANYTHING THE F&I GUY TELLS YOU. CONTRACTS CANNOT BE MODIFIED EITHER IN WRITING OR BY VERBAL PROMISES.

So, when the F&I guy tells you about the customer of his who had $5,000 worth of Wear & Tear damage and paid nothing because of the coverage, ASK TO SEE THE CONTRACT. It will be long and boring and full of barely readable gray print in a tiny font. He may not want to give it to you.

I had an F&I guy insist the brochure was the contract, and they "couldn't legally have anything in the brochure that wasn't in the contract", which may be true. However, there will be other stuff, exclusions from coverage, that are not revealed on the brochure but are definitely in the contract. When he insisted a 2nd time that the brochure was the contract, I asked him if it was okay if I just signed the brochure to bind the coverage. Shortly thereafter I had a contract in my hand. Exclusions galore. Pass.


Wear & Tear: Normal wear and tear is allowed on a lease turn in for no charge. They have a template showing how much damage inside and out is considered "Normal". Weigh the cost of the extra coverage vs how much actual abnormal damage there's likely to be. If you have a wife like mine, who can't seem to manage dragging stuff across the rear bumper when she gets it out of the trunk, maybe get the coverage. If it covers a set of replacement tires, it might also be a good value.

AutoButler: Basically you get to pay in advance for a bunch of detailing visits. My Dad used to say, if you want to insure a crappy service, pay for it in advance.

Wheel Protection: Typically only covers wheels so badly damaged they cannot hold air, which your own insurance covers anyway. Does not typically cover curb damage or other cosmetics.

Permashine, "Teflon" Clearcoat Protection
Any product or service that requires regular scheduled re-application is no different from any aftermarket polish system. I always take a pass.

Leather Bonding, Leather Sealant
Hey, if they can't get a stain out they replace the seat! Except there's nothing like that in the actual contract. Skip.

If you do buy any extras, add them into the spreadsheet to adjust your payment number.

Once the numbers are settled, all that's left is to use the spreadsheet to hunt down any variation between the dealer's monthly payment figure and your spreadsheet's calculated payment. If it's small change to you, let it go. Otherwise, have the F&I guy, who at this point just wants you out of his office so he can hopefully make some money on the next victim, spin his monitor around so you can see it.

Check his values for the various components of the deal and see how they compare to yours. Look for extra money added to the MSRP, or for additional unspecified "Upfront Fees". There are no mystery fees. It's aquisition, dealer prep, tag and title, and shop fees. Anything else he needs to back out.

Once the numbers line up to your satisfaction, have him generate the paperwork. Before signing the financing paperwork ( a federally mandated financing agreement form) double check the monthly payment and verify the number of months. It's not unheard of for an F&I guy to get you your target payment by simply extending the loan term. Verify there is no "balloon" payment due at the end. They will bury the loan doc in among a lot of inconsequential stuff...a We Owe, a mileage affidavit on the trade, a Lemon Law disclosure, hoping you're in the habit of scribbling a signature and moving on when the financing agreement gets slid under your nose.

The only form that really matters, and that binds you legally to the payment and term, is the lease financing doc.

Sign away and go enjoy your beautiful new Mercedes, confident you controlled 100% of the deal and got exactly what you wanted.

One last thing: Car salesmen, GMs, F&I Guys, are not crooks. They do however spend all day, day after day, being jerked around by buyers trying to squeeze every penny out of them. Don't be that guy. The dealership is entitled to a profit. The F&I guy has to tell you about the extra coverages. Your trade is worth wholesale, period. They're not trying to steal it. They need to recondition and market it to make a profit, or send it to auction as wash. While they may not make as much off of you, they do appreciate dealing with a buyer who knows what he's doing. At the end of the day, a unit moved is a unit moved.

Sample deal as calculated by MB Financial:





Excell/Open Office Spreadsheet with that deal pre-loaded: (May open as "read only". Save a version to your computer with a different file name to be able to edit.)

Post any questions.

cyberorth

How do you like the app iLeaseMyCar? I often use that. It seems to factor in all key elements but it of course doesn't show you its formulae.

Mike5215

I haven't tried it, but a phone would be easier to carry around vs the laptop. I'll have a look!

cyberorth

Have a look. The iPad version has a reverse calculator which is great to analyze a monthly payment that is offered.

Keep me posted please.

Mike5215

It's handy, but as with a dealers numbers, too much of the calculations happen behind the curtain. If yours and the dealers payment number differs it would be hard to know exactly which value(s) were wrong and by how much.

I want every dollar accounted for and matching the dealers individual line item numbers, including all fees. It's the only way to ferret out some extra undisclosed profit that may have been tacked on.

I'm in the midst of a lease deal this morning on a C450. I sent the sales guy my breakout and asked two questions;

1) what money factor is he using?
2) do they reach the same monthly payment I have, based on the assumptions in the deal they sent me?

Really just an answer on #2 would be fine. Here are the responses:

"We gave you everything but the kitchen sink! You should pull the trigger!"

And

"The money guy has been doing this twenty two years and he has no idea what you're asking."

This is my home dealership and the 3rd car I will have purchased there, and we're still playing games. Nobody is immune and no dealership wants you to have all the numbers.

BTW, here are the values I sent him. Do I seriously believe the finance guy has never heard any of this terminology?

Mike5215

Okay, so this just happened. This BTW is at my "home" dealership. Since my sales guy apparently had a stroke and can no longer respond to a direct question, I decided to set aside ironing out the numbers and give them a $1000 deposit to bring the car in (it's 2 hrs away).

I hand the guy my CC, and he wants to let me know I've agreed to buy the car, or walk away from the deposit. What if I don't like it once I've seen it and driven it? Too bad. I told him that was okay, I'll just drive down to the other dealer and do the deal down there.

Wanted to give my local store the business but I went ahead and got the same deal ($6k off MSRP) from the store 2hrs away. Crazy. I've put $1000k down as a refundable deposit on an ordered car before.

cyberorth

So did you finalize the deal? This is like watching a movie now.
I can't say that I am surprised about the comments the dealer made toward your request, but fundamentally it is disrespectful to blow off customer's questions like this especially when there is a hint of intelligence in those questions. That type of response is a deal breaker for me.

I have built a relationship with an actual sales manager over the years where he shares his screen with me and shows me everything he sees. He tells me the deal he can do for me. I accept knowing that there is another 1-1.5k in there if I sit and haggle, but I feel between me and my wife, we're ok with that and it's the long term benefit that is more valuable to us. I almost miss the haggling that sometimes went on for a long time with the MB
Side note I leased a GTR last year and the negotiation started in July and I signed in December over $100+ discrepancy in the monthlies!!!

Mike5215

Well, Dealer 2 started out with the usual nonsense, sending me a deal break out that was half finance, half lease, which let them put the sales tax on the entire lease into the cap cost. On a lease, tax is paid in monthly installments on the rent. It's not capitalized. His response was that they were a "full disclosure dealership" and had to show both lease and purchase numbers. It took two more emails to get the actual numbers, but once I did they lined up with the spreadsheet (within $1.75/month).

I'm driving down tomorrow. He has two cars I'm interested in. Now that I know the spreadsheet is duplicating the dealership's math, I can do a couple of "what if" scenarios knowing the numbers will track properly.

cyberorth

That feels good to me. Will you keep the S or trade? Sometimes a trade further complicates a lease deal because they can present better numbers by low balling the value of trade but at the end they pay more toward the trade, which will hurt the end of lease payoff. Of course you will see that on your program right away.

rbrylaw

If we didn't have a family day planned at the beach tomorrow, I'd stop by and meet you! Good luck, but I think they'll take good care of you.

Mike5215

I've got two prospects. A silver/black leather, premium and multimedia, pano, 18", nice car,$61600 MSRP. The other is a Black/Designo Platimum with CF trim, heads up, hands free, light , premium, multimedia, lighted star, night package, for $65000. I have a bad feeling I'm going to want the black car. They took $6k off the Silver car. I'd ask for $6500 on the black one. We'll see. Meanwhile, anybody want a great deal on a really clean 2010 S550? Still CPO until 11/2016 or 120,000 miles. $5k Audison/Focal audio integration, OEM S65 Staggered 20's with fresh Michelin Pilot Supersports. Drone Mobile remote starter by cell phone app. *****in quad exhaust and S65 diffuser. It's on AutoTrader.

Car ID AT-18F32966

cyberorth

Is that $5k a typo?

I personally like the lighting package and for me that's how the two differ. I care little about the rest. Check their upcoming allocation as well. Either way you'll be happy. Remember you were almost in a 300. Good luck.

cyberorth

Also not to mess with you but you are in the territory of C63 (non s) price. Check to see what is STANDARD on that car that you don't have to pay more as option. Some standard features on 63 are optional on the 450. Do an apples to apples. You'll probably see a lower residual on the 63 that may be a deal breaker for the lease but have a look. You owe me a drink if you end up with a c63 btw. Or maybe I'll buy since you'd be poor

Mike5215

No, 5k for real. I did it in dribs and drabs. Look, I drive a used S Class...clearly I lack good judgment when it comes to money. Most of that gear can come out and go into my next car ( even the Burmester might benefit from the Audison DSP and the Focals) but I'm thinking the audio might help sell the S.

The S did get me accustomed to a four figure payment though. Even the loaded up C450 is still saving me $100 a month. So drinks on me.

Both the C450s have the light packages. I'll double check.

I love the C63 but I'd rather have the content vs the HP. Plus, by not spending $70k on the 63 I'm being "sensible" with the 450. Like I said, not great judgment when it comes to cars. Luckily I had excellent judgment when I chose my wife, since she lets me spend stupid money on cars.

cyberorth

Nope I misunderstood your first explanation. I though you wanted 5k for the car. I reread and understood you were valuing the sound system or whatever.

Your wife is such a lucky lady!

Mike5215

Well, the out of area dealership was a megastore compared to my local store. They had pretty much an example of every package and option, although none all together in a combo I wanted.

I took out two C450s, and I took my 21 year old son for perspective because I tend to make bad long term choices when left to my own devices.

The cars were beautiful inside and out. They rode too firm for my taste, even in comfort mode. I've overlooked that little detail in the past and was stuck with 36 months of remorse.

So, no 450 for me. Next I drove a 300 Sport on 19", loaded up. That probably would have been the car, but I got to drive my first AirMatic C and that's the ride I'm looking for. No inventory anywhere so I did a build, got everything except Park Assist and still ended up way under a C450.

Couldn't pull the trigger as I wanted a discount and the sales manager with the authority for the cut I asked for was off.

cyberorth

Grrrr the suspense is killing me.

chiefnwa

null and void, wrong topic