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Interesting thread, as I have never leased a car before, so it has been worth it to me to learn what is what if I ever go that route. For example, I had heard of money factor, but not realized that it is just a fancy name for the interest rate.
^Yeah, it's just expressed differently but can be converted to an APR. There are a lot of (intentional) black holes in leasing that a dealer can use to "pad" or "fluff" profit, knowing that most buyers can't sort it all out themselves and just surrender to the monthly payment.
^Yeah, it's just expressed differently but can be converted to an APR. There are a lot of (intentional) black holes in leasing that a dealer can use to "pad" or "fluff" profit, knowing that most buyers can't sort it all out themselves and just surrender to the monthly payment.
Yeah, they even tried that with me, and I was buying. "What do you want your payment to be?". Umm, hell no. We negotiate the new car price, then the trade in price. Then I decide what my payment is by putting down more or less money.
Well, it looks as though knowing about the smoke and mirrors involved with leasing, has scared off my dealer. Emailed him the correct leasing figures and haven't heard from him since. Guess, I'll just have to move on to the next MB stealership...
Ha. Use the same numbers when you contact area dealers as far as discount off MSRP, lease term and mileage and someone will bite. (Leave the other numbers...residual, MF etc out for now.)
Ha. Use the same numbers when you contact area dealers as far as discount off MSRP, lease term and mileage and someone will bite. (Leave the other numbers...residual, MF etc out for now.)
Yeah, now I'm certainly better armed to do battle with the dealer. However, as for using the same discount, I really don't think anyone will go for it as $2500 off this new and hot car doesn't sound like they'd go for it. Probably the most I could get would be $500 or so.
The folks I've been dealing with must have some kind of arrangements with MB. They get the cars from MB and then lease them (it is an MB sponsored lease). Their fees beyond the leasing fees are less than MB's and thus make things look like a good deal. However, in reality, I guess their telling me that I'm getting a $2500 discount is smoke and mirrors.
I still ahve a coupld of dealers that I can go to once I get my courage and energy levels up to battle fitness.
Yeah, now I'm certainly better armed to do battle with the dealer. However, as for using the same discount, I really don't think anyone will go for it as $2500 off this new and hot car doesn't sound like they'd go for it. Probably the most I could get would be $500 or so.
The folks I've been dealing with must have some kind of arrangements with MB. They get the cars from MB and then lease them (it is an MB sponsored lease). Their fees beyond the leasing fees are less than MB's and thus make things look like a good deal. However, in reality, I guess their telling me that I'm getting a $2500 discount is smoke and mirrors.
I still ahve a coupld of dealers that I can go to once I get my courage and energy levels up to battle fitness.
I wouldn't be so sure... honestly I'm not getting a C43 AMG Coupe without at least 10% off msrp.
None of the new cars at an MB dealer are owned by the dealer. MB loans the cars to its franchised dealers, and the dealer pays MB back for the car when it sells. If the car sits too long MB starts charging the dealer interest on it.
Whether leased or sold, the dealer gets lump sum cash from the financing, pays MB back for the car and keeps the difference.
$2500 is aggressive for a new model at launch. Wait six months when the cars start accumulating on the lots and 10% won't be unusual.
Yeah, now I'm certainly better armed to do battle with the dealer. However, as for using the same discount, I really don't think anyone will go for it as $2500 off this new and hot car doesn't sound like they'd go for it. Probably the most I could get would be $500 or so.
The folks I've been dealing with must have some kind of arrangements with MB. They get the cars from MB and then lease them (it is an MB sponsored lease). Their fees beyond the leasing fees are less than MB's and thus make things look like a good deal. However, in reality, I guess their telling me that I'm getting a $2500 discount is smoke and mirrors.
I still ahve a coupld of dealers that I can go to once I get my courage and energy levels up to battle fitness.
I'm getting 10% off a C43 Coupe, a newer and hotter car. You should be fine to get more than a measely $500 off...
And for reference, I am not a long time customer of this dealership. It's my first purchase through them.
I'm getting 10% off a C43 Coupe, a newer and hotter car. You should be fine to get more than a measely $500 off...
And for reference, I am not a long time customer of this dealership. It's my first purchase through them.
I envy your 10%, and thanks for the encouragement. It could be that with the C43 being an "upper level" car, they've got more profit built in and can deal more???
Typically they don't deal much on AMGs, or that was my understating. The C300's are their volume car, so expect to be able to get a great deal on one. Ask for 10% to start and explain why you think that's realistic (and make it seem as if it's a requirement), but be willing to settle down to around 7%. Otherwise I wouldn't waste time talking to the dealerships any further if they can't do that. Also, give them incentive to want to win your business, whether it's factual or not...relationship and repeat customers appeal to them, so use that to your advantage.
Ultimately it's all going to come down to your ability to negotiate and work them a bit. It's very unlikely they are just going to hand you a great deal just because...you've got to earn it. I still remember my conversation with my sales associate almost word for word, even on my C450 test drive I barely remember the car bc I was so focused on guiding the conversation in places I could leverage in negotiating.
Last edited by inhartwetrust; 05-30-2016 at 12:49 PM.
Never negotiate based on payment. Negotiate on price and calculate your own payment. Residual looks too low for 7500 miles a year. A sedan lease for 36 months with double the mileage has a 60% residual.
Clarify from the dealer how much off MSRP he's willing to go and post back. Looks like you're on Edmunds as well. The mod is asking what the net cap cost (the total amount financed), not the residual value.
Download the lease spreadsheet and plug in your numbers. Also read the part about not negotiating based on payment:
Why not negotiate from a payment. ?? It all comes down to that anyway. As long as you know what that payment means......
This thread is a train wreck. You don't need life changing software to figure it out lol. Oh and maybe you should be talking about capitalized cost.....
What the payment "means"? As in the math required to reach the payment amount? Yeah, that's what the spreadsheet does. It tells you what the payment means.
Because there are many ways to get you the payment number you want while simultaneously over charging you.
For example, you want to be at $650 a month. You don't care what the new car costs, what your trade in value is, what your interest rate is, what the loan term is. You just can't spend more than $650.
Not a problem, a dealer will hit your number. Of course if you could build the deal yourself you'd know there was an extra $3k in profit in the deal, and the real numbers if you stripped away the padding put your payment at $615 for the same car.
But hey, dealers love payment buyers. I do to, because a dealership couldn't survive just doing deals with people who know their stuff and can calculate their own payment. Guys like you getting bent over make it possible for guys like me to get the results I get. So thanks! Keep up the good work.
How old are are you Mike??
And dare I ask What results are you referring to??
Rule #1 of leasing cars: dont negotiate to a monthly payment. Pretty universal rule.
This clown needs to give it up, you obviously don't know how to best put a lease deal together so spare the OP any of your bull****. He's here looking to learn, not the be fed misinformation by others (especially not the most common mistake there is).
I do like the part where he said my spreadsheet was life changing though. It's especially true if up until that point in your life you'd never done math.
Here we go, Mike. Got a reply from the dealer. He said that I almost did the calculations correctly, but in order to be correct, I would have to add the acquisition fee ($795) into the calculations. But, I said that I'll be paying that up-front and don't intend on rolling it into the lease payments. He then said that even though it is being paid outside of the lease, I had to put that figure in. When doing so, you'll note (see newly calculated spreadsheet below) that it causes the payments to increase from $617 to $652. What I don't understand is why should acq fee be put into the lease calculation when I am paying it outside the lease??? Also, even though the new calculation has upped the payments, he said he would still honor the $635 payments he quoted me last week. And, BTW, I forgot to mention that he's giving me $9000 (in cash) on my 2005 BMW Z4 2.5i 44K miles...whereas Carmax and another MB dealer quoted $8000. So, will it be $617 or $635???
He's either inexperienced or a crook. You can put that fee in up top and make it part of the capitalized cost (which adds to the lease payment) or you can pay it as an upfront cost and pay it as due at signing, never both. He can't double dip the fee as profit. Funny that it took them a week to figure out how to respond without acknowledging that they padded the first offer.
We don't need him to "honor" the $635 figure necessarily. We need him to explain where he's getting his numbers from in the first place so we can duplicate the calculations and confirm them.
If he's insisting it has go into capitalized costs put it there and back it out of due at signing.
First months rent and tax goes up with the extra $795 to $641.32
Moving it from due at signing to part of the cap costs puts the due at signing at $990.32, which is first months rent and tax of $641.32 plus the $349 dealer fee.
(If he's okay with putting the payment at $635 with $990 due at signing, great. I guarantee he's not. Just taking the extra $795 in profit and moving it around.)
If you look at the monthly payment variance it's now going in your favor, with a $227 credit over the life of the loan. But...
$795 extra fee
-227 less in payments
-----
$568 in extra profit
My response would be:
Dear Dealer,
Thank you for your counter offer. It does appear we're getting close, however MBFS is entitled to only one $795 acquisition fee. I'm fine moving the $795 from due at signing to the cap costs. However I would not be interested in paying it twice.
Attached please find my revised offer, reflecting the fee as part of the cap cost and removed from cash due at signing. It results in a monthly rent and tax of $641 and a total of $990 cash to close.
Presuming these changes are acceptable, I look forward to closing the deal.
Leave the cash for your trade out of it. The value of it didn't change based on whatever lease deal you end up putting together.
He's either inexperienced or a crook. You can put that fee in up top and make it part of the capitalized cost (which adds to the lease payment) or you can pay it as an upfront cost and pay it as due at signing, never both. He can't double dip the fee as profit. Funny that it took them a week to figure out how to respond without acknowledging that they padded the first offer.
We don't need him to "honor" the $635 figure necessarily. We need him to explain where he's getting his numbers from in the first place so we can duplicate the calculations and confirm them.
If he's insisting it has go into capitalized costs put it there and back it out of due at signing.
First months rent and tax goes up with the extra $795 to $641.32
Moving it from due at signing to part of the cap costs puts the due at signing at $990.32, which is first months rent and tax of $641.32 plus the $349 dealer fee.
(If he's okay with putting the payment at $635 with $990 due at signing, great. I guarantee he's not. Just taking the extra $795 in profit and moving it around.)
If you look at the monthly payment variance it's now going in your favor, with a $227 credit over the life of the loan. But...
$795 extra fee
-227 less in payments
-----
$568 in extra profit
My response would be:
Dear Dealer,
Thank you for your counter offer. It does appear we're getting close, however MBFS is entitled to only one $795 acquisition fee. I'm fine moving the $795 from due at signing to the cap costs. However I would not be interested in paying it twice.
Attached please find my revised offer, reflecting the fee as part of the cap cost and removed from cash due at signing. It results in a monthly rent and tax of $641 and a total of $990 cash to close.
Presuming these changes are acceptable, I look forward to closing the deal.
Leave the cash for your trade out of it. The value of it didn't change based on whatever lease deal you end up putting together.
I had been indirect Dealer (Bank side) lending for 10 years and can confirm that you have been correct on all points made but one and it is insignificant (some dealers do own inventory most are wholesale financing product). Very nice job with solid advice on all fronts. . Especially regarding trade price negotiation prior to auto sales price.
People need to understand that when leasing a vehicle you do not own it and you are assuming the heaviest portion of loss in regards to depreciation (New Car depreciation) WITH interest. It comes down to what you are calling variance cost. Are you (as the buyer) willing to throw away $9,000+ to rent the vehicle for 3 years? If you have money to burn and know you don’t want the hassle of resale/trade in they are a good idea. I would suggest that this one (7,500 miles PY for 3 years) SUCKS!!! Dealers refer to this as "clubbing baby seals".
05-27-2016, 10:47 AM
) SUCKS!!! Dealers refer to this as "clubbing baby seals". 
