Quick depreciation???
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From: Philly and NYC
2019 E63S & 2022 X7 M50
Why would depreciation matter in a car lease where you do not plan to buy out the car at the end of the lease anyway?
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2016 C300
Upside down in a lease is no different than being upside down on a buy. If you want out on a lease, the payoff is equivalent to the remaining lease payments plus the residual. You simply trade the leased car in on something else, as you would a purchased car you wanted to trade. Ideally you'd want to do that when the value of the car is greater than the payoff.
Depreciation matters because it affects the spread between the actual trade in value of the leased car versus the payoff. While Mercedes pads the residual to make leasing attractive and to bolster the brand's image, it may not reflect the actual residual value. A W205 after three years and 45,000 miles will probably not be worth the 60% residual the lease is based on. It will be closer to 50%. Audi on the other hand does not pad residuals. We got out of an Audi lease a year early and ended up making some money on the trade.
A car that depreciates steeply just requires making lease payments over a longer period of time in order to get "even", where the payoff is equal to or less than the actual market value, than one that holds its value better. You can of course not wait until you're flush and carry some negative equity into the new deal. Not ideal but if you hate the car it may be worth it to take a little hit.
Depreciation matters because it affects the spread between the actual trade in value of the leased car versus the payoff. While Mercedes pads the residual to make leasing attractive and to bolster the brand's image, it may not reflect the actual residual value. A W205 after three years and 45,000 miles will probably not be worth the 60% residual the lease is based on. It will be closer to 50%. Audi on the other hand does not pad residuals. We got out of an Audi lease a year early and ended up making some money on the trade.
A car that depreciates steeply just requires making lease payments over a longer period of time in order to get "even", where the payoff is equal to or less than the actual market value, than one that holds its value better. You can of course not wait until you're flush and carry some negative equity into the new deal. Not ideal but if you hate the car it may be worth it to take a little hit.
Last edited by Mike5215; Apr 9, 2016 at 11:02 PM.
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That's great info, Mike. Good to know that MB is padding their leases a bit. I will factor a 7% risk premium into my cost of ownership model if I finance it instead of leasing...that will give me a better apples to apples picture of the cost over 3 years.
Looking back I should have picked up on this based on my conversation with my SA when ordering my car a few weeks back. He told me that if I leased it and planned to buy it after the lease to let him know a few months in advance of the lease end bc he could, in some cases, get me a buy out price that was much lower than the remaining value of the car based on the residual. He told me it would be important to let him know in advance of the lease end, because there is a certain point where that option is voided as MBFS will have already made arrangements on what to do with the car after I give it back -- he referenced a recent case where a guy wanted to do just that, but drug his feet and missed the cutoff by a day or two. The guy was then forced to buyout the car at the MBFS price, which cost him thousands (can't remember the exact amount, but I remember saying "Oh ****, that sucks for that guy" verbatim. At the time I didn't even process this as I was too busy being on cloud nine about negotiating the 13% off MSRP, but essentially he was telling me the residual had a good probability for being inflated and the car could be worth less than the residual in the lease contract, and he could get me the buyout at the further depreciated value with adequate notice. I'm actually disappointed in myself, given my finance saavy, for letting this go in one ear and out the other and not giving it more thought.
Looking back I should have picked up on this based on my conversation with my SA when ordering my car a few weeks back. He told me that if I leased it and planned to buy it after the lease to let him know a few months in advance of the lease end bc he could, in some cases, get me a buy out price that was much lower than the remaining value of the car based on the residual. He told me it would be important to let him know in advance of the lease end, because there is a certain point where that option is voided as MBFS will have already made arrangements on what to do with the car after I give it back -- he referenced a recent case where a guy wanted to do just that, but drug his feet and missed the cutoff by a day or two. The guy was then forced to buyout the car at the MBFS price, which cost him thousands (can't remember the exact amount, but I remember saying "Oh ****, that sucks for that guy" verbatim. At the time I didn't even process this as I was too busy being on cloud nine about negotiating the 13% off MSRP, but essentially he was telling me the residual had a good probability for being inflated and the car could be worth less than the residual in the lease contract, and he could get me the buyout at the further depreciated value with adequate notice. I'm actually disappointed in myself, given my finance saavy, for letting this go in one ear and out the other and not giving it more thought.
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BMW Z4
Phenomena not specific to MB. Bought a '13 Mini Cabrio for my kid with 6800 miles on it for $19k vs. the heavily loaded MSRP of $34.5k. That was last Aug...so car was right at 2yrs old and it was CPO'd to boot.
Buying premium brands 'new' can definitely hurt the wallet. But as others have noted...if you love the car and it's relatively trouble free, it shouldn't be a huge issue. Unless you lose your job suddenly, were overextended on the purchase, or some other major financial change occurs.
Also recommend, knowing you are 'stuck' in the car for a couple years...looking to solve as many issues on your own if the buyback doesn't work. The time spent may not seem worth it now, but clear up an issue or two and you might find yourself actually starting to like the car again. There's a reason you bought it vs. countless other choices on the market.
Buying premium brands 'new' can definitely hurt the wallet. But as others have noted...if you love the car and it's relatively trouble free, it shouldn't be a huge issue. Unless you lose your job suddenly, were overextended on the purchase, or some other major financial change occurs.
Also recommend, knowing you are 'stuck' in the car for a couple years...looking to solve as many issues on your own if the buyback doesn't work. The time spent may not seem worth it now, but clear up an issue or two and you might find yourself actually starting to like the car again. There's a reason you bought it vs. countless other choices on the market.
Super Member
Joined: May 2014
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From: NYC
2014 C300
Ve are Mercedes. Ve vill tell you vat you like and zat vill be zat!
Mercedes is not one to load up the features on their entry or near entry level cars. Those are withheld for their most premium offerings, ie the S Class, and the new E.
The folks who do pile on amenities to the point of absurdity and at dirt cheap prices are the Korean builders, and even the other Asian builders. For the money, the Kia Cadenza is an outstanding value in a compact luxury sedan. Loaded out the *** and it actually drives nice too. Nobody buys it, but it's a smart buy pound for pound.
Mercedes is not one to load up the features on their entry or near entry level cars. Those are withheld for their most premium offerings, ie the S Class, and the new E.
The folks who do pile on amenities to the point of absurdity and at dirt cheap prices are the Korean builders, and even the other Asian builders. For the money, the Kia Cadenza is an outstanding value in a compact luxury sedan. Loaded out the *** and it actually drives nice too. Nobody buys it, but it's a smart buy pound for pound.
Let's compare the new 2017 Audi A4 to the 2016 C300 priced out with similar features:
2017 Audi A4 Quattro - Prestige (Highest trim available) Optioned to $51,625
- Monsoon Gray Metallic - $575
- Leather Seats - Nougat Brown - $750
- Gray Oak Wood Inlay (Ash wood in MB basically) - $350
- Sports Package - $750
- Cold Weather Package - $500 - Includes Rear seats and heated sport steering wheel
- Warm Weather Package Ventilated Seats- $1450 - includes rear manual window shades
Look at how much car you get for that $51,625 MSRP. The Audi A4's Prestige trim includes:
- Full LED headlights, with adaptive curve and leveling
- 3 Zone climate control - not a huge deal but still a +1 over MB
- Ambient LED interior lighting with red, blue, yellow
- Bang & Olufsen 3D Sound System with 19 speakers, 16-channel amplifier and 755 watts - Which is probably better than Burmester based on your other thread!
- 8.3" Infotainment display
- 12.3" Virtual Cockpit digital instrument cluster - This is a game changer in my opinion. For that price, in this segment there is nothing like it.
- Keyless entry and start
- Parking system with front and rear sensors AND top down 360 view.
- Heads Up Display
Now let's compare that to a C300 4Matic with Sports package optioned to include everything the Audi A4 has, minus the digital instrument cluster.
C300 4matic Sports Sedan -With same options is $58,625
- Iridium Silver Metallic - $720
- Lighting Package - $800
- Panorama Roof - $1480
- Cranberry Leather - $2880 - includes heated/ventilated seats/ambient lighting
- Black Ash wood - $325
- Manual rear shades - $380 - The A4 has it so I have to be fair
- Heated Steering wheel - $250
- Premium 2 - $2220 - Includes Burmester/Keyless Go
- Multimedia Package - $2,690
- Heads Up Display - $990
- Parking Assist with 360 camera and sensors - $1,290
So right off the bat we are looking at a $7,000 difference and the Audi wins on features, price, and tech especially with that 12.3" gauge cluster. I sat in the 2017 A4 at the car show it's only flaw is the boring design, not a BAD design at all though. Build quality was fantastic, it felt extremely solid and the digital dash was a pleasure to use. Everything was ergonomic and intuitive as one would expect in a luxury car. The new 2017 Audi A3 will have optional massaging seats something unheard of in that segment.
All of this is coming from a MB fanboy, the W204 in my sig is my first car and I love it and the brand but they have to step their game all the way up.
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MBWorld Fanatic!
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2016 C300
We've owned two Audis and a VW. An A5 Premium Plus, a Q7 Premium Plus and a CC. I HATE the seats. Never comfortable in any of them. I asked a sales guy why Audi had such a hard time designing comfortable seats. He said, straight faced, that it was a safety feature intended to "keep drivers alert"... For nearby chiropractors I guess.
The interiors are nicely designed, but the materials SUCK. Leather is brittle, shows wear quickly. Cheap VW bits wherever they think they can get away with them. I detailed my wife's Q7 before she went on a trip this weekend. My S class, which was five years older with 60,000 more miles, held up better by a lot.
Exteriors are gorgeous, great looking modern designs. Really nice selection of wheels. My wife loves Audi, and my kid is happy in his CC but it's hard coming from a Benz and really loving anything else.
The interiors are nicely designed, but the materials SUCK. Leather is brittle, shows wear quickly. Cheap VW bits wherever they think they can get away with them. I detailed my wife's Q7 before she went on a trip this weekend. My S class, which was five years older with 60,000 more miles, held up better by a lot.
Exteriors are gorgeous, great looking modern designs. Really nice selection of wheels. My wife loves Audi, and my kid is happy in his CC but it's hard coming from a Benz and really loving anything else.
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2020 GLC43
We've owned two Audis and a VW. An A5 Premium Plus, a Q7 Premium Plus and a CC. I HATE the seats. Never comfortable in any of them. I asked a sales guy why Audi had such a hard time designing comfortable seats. He said, straight faced, that it was a safety feature intended to "keep drivers alert"... For nearby chiropractors I guess.
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From: Cincinnati
2010 E350 4Matic
This is rubbish relative to the A4. There is no VW on the A4 chassis. A 2014 C250 doesn't begin to compare to an A4 and in particular the latest B9 chassis. On the other hand the W205 chassis can hold its own and in many areas is superior to the A4. Its a matter of preference at that point.
Last edited by MBNUT1; Apr 10, 2016 at 05:22 PM.
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From: DFW
2022 E350 Diamond White Metallic, 2016 GLC300 Dakota Brown Metallic
Like my 14 C250. Really like my 16 GLC 300. To me not rubbish. Some of parts on the Audi are the same as the parts on the Mexican Jettas I bought for my teenagers to drive. In fact the new Q5 is going to be made in Mexico
Last edited by dieseldoc; Apr 10, 2016 at 05:42 PM.
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2016 C300
Man, I had this new Audi A5 coupe on a lease and the seats were torture. I had an upholstery shop pull the driver's seat, remove the lumbar mechanism, repad the seat entirely, and then when it was done I gave the car to my wife because it didn't make a bit of difference, and I bought another S instead. So there's that.
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2020 GLC43
Mexican VWs are horrible about 10 years back. But checking out the latest Golf GTI, they have improved and almost as good as European made Golf R.
For Audi, right now all MQB platform are built in Mexico. So that's almost all VWs and A3/Q3. Q5 will be the first MLB Evo platform built in NA, so I won't want to be the guinea pig. I think it will take 2-3 years to sort out all the supplier bugs.
As for VAG parts sharing, at least they did it tastefully unlike Lexus which used to put Corolla grade switches into IS. Props to Lexus that they don't do that any more and follows Audi.
Thread Starter
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From: Miami, FL
'13 Infiniti G37
Update: MB corporate contacted me to inform me that there is not enough to envoke the Florida lemon law, go figure. Told me they can do nothing except continue to take the car in and have it looked at. Anyone any to take over a lease on a damn near loaded c300? I'm sure these issues will be nothing to someone else, I'm just done with MB as a brand.
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2016 C300
Ha! It's not MB Corporates decision as to whether or not the car is a lemon. (Although that sure would save them a bunch of buy backs).
You need a Florida Lemon Lawyer. Google a couple Fl lemon lawyers, fill out their online case evaluation form(s) and see what comes back.
If they take your case their representation is free. The auto manufacturer has to pay their fee if you win. If you lose, there is no fee.
You need a Florida Lemon Lawyer. Google a couple Fl lemon lawyers, fill out their online case evaluation form(s) and see what comes back.
If they take your case their representation is free. The auto manufacturer has to pay their fee if you win. If you lose, there is no fee.
Thread Starter
Member
Joined: May 2015
Posts: 83
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From: Miami, FL
'13 Infiniti G37
Ha! It's not MB Corporates decision as to whether or not the car is a lemon. (Although that sure would save them a bunch of buy backs).
You need a Florida Lemon Lawyer. Google a couple Fl lemon lawyers, fill out their online case evaluation form(s) and see what comes back.
If they take your case their representation is free. The auto manufacturer has to pay their fee if you win. If you lose, there is no fee.
You need a Florida Lemon Lawyer. Google a couple Fl lemon lawyers, fill out their online case evaluation form(s) and see what comes back.
If they take your case their representation is free. The auto manufacturer has to pay their fee if you win. If you lose, there is no fee.
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2016 C300
Oh, they'll almost never take it upon themselves to buy back a car voluntarily. Florida isn't great for lemon law, it's an arbitration state, but you'll need a lawyer if you want the car bought back.
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2020 GLC43
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From: Mass
2026 GLE 53 Coupe
Update: MB corporate contacted me to inform me that there is not enough to envoke the Florida lemon law, go figure. Told me they can do nothing except continue to take the car in and have it looked at. Anyone any to take over a lease on a damn near loaded c300? I'm sure these issues will be nothing to someone else, I'm just done with MB as a brand.
I'll tell you what helped me mentally though, I made it my hobby to bad-mouth my Jeep and Chrysler Customer Care on every consumer advocate site I could find, and of course told all my friends, family, and coworkers the horrible experience I had with Chrysler/Jeep. To this day I will forever boycott ANY product from Chrysler...and will do the same to Mercedes Benz if history repeats itself.
I find that voting with your wallet sometimes is your best revenge.
