pgordon888

I have a new 2012 CLS63 AMG on order that should be here in about 4 to 6 weeks. I am new to MB and AMG and was planning on buying the car (60 month financing at around 2.5%) rather than leasing but after reviewing posts on this forum about AMG depreciation and selling prices for the higher end used AMGs I am rethinking this decision. Any thoughts?

I will likely be driving the car about 6,000 to 7,000 miles a year and will garage it both at home and at work so it will be mint for as long as I own the car. The original plan was to keep it till my GEICO MBW runs out at 7 years (or maybe longer if I love it) but having the option to trade into something new at 3 to 4 years (recognizing my past history here of trading up around 3 years). I would have thought that the early trade scenario would make the lease look better definitely and the longer hold scenario would make the buy look better. However, if I correct on my research here it looks like rolling 3 year leases are not that far off from costs under the longer hold scenario.

topgun04

I would have thought that the early trade scenario would make the lease look better definitely and the longer hold scenario would make the buy look better

You have to look at the number to make that decision. In both lease and buy, you pay for the finance cost (interest rate in buy, money factor in lease), depreciation (different between the buying price and selling price in buy, portion of the monthly payment in lease). Then you hit into some more minor issue. Sales tax can be treated differently between buy and lease in your state (In California, we only pay sales tax on our monthly payment and tax on the entire car when buy.. Save a bunch of tax if you only hold the car for 2 to 3 years with lease). Lease has an acuqisition cost of between 550 to 700 depending on manufacturer but it also come with a gap insurance where you can turn in the insurance check during the lease if you have an accident that total the car and call it a day. Try that with a puchased car where most of the time the insurance check is not enough to cover the balance of the loan..

And the most important issue is whether Mercedes subsidize the lease and whether you can write off the lease payment as part of your business expense. If the car can be used as a business car, it is a no brianer siutation to go with lease.. Otherwise, you have to see the term of lease and buy to see which way work out well for you. Good luck.

looney100

Unless they are offering a better lease rate (%) than you could get financing, leasing rarely works out better financially. One possible exception is for the self-employed or others who can write-off lease payments. If a car suffers from quick depreciation, that is just factored into the lease cost through a lower residual, resulting in higher monthly payments.

Other than the scenario indicated above there are typically two types of people who lease - those who like getting a new vehicle every few years and don't want to go through the hassle of reselling the vehicle, and would just rather hadn it back to the dealer; and people who can't afford payments to own/finance the vehicle, and lease due to lower monthly payments.

pgordon888

Thanks for your thoughts.

In my case, I would use the same negotiated all in purchase price for the lease and sale options (which is a hair over invoice at $109K on a $118K MSRP). The lease rate Money Factor of .00230 translates into an effective APR of 5.52%, which is much higher than the 1.99% to 2.5% APR I should get on a 60 month financing. However, this reduced financing cost is offset by the 59% residual MBFS is offering on a 36 month lease @ 7500 miles per year. There is no way I would get $64,310 in a trade-in 36 months after a purchase. In PA there are also some sales tax savings (in Philly we pay a 10% tax on lease payments/only the purchased depreciation v. a 8% tax on the total purchase price in a sale structure).

So at the end of the day I am comparing a $0 down 36 month lease at $1641 per month to a $30K down 60 month finance at $1537 per month. If I were to sell at the end of Y3 under a buy scenario I would have $49,599 left on the loan and would likely only get about $55K on a dealer trade using 2009 CLS63 trades as an estimate of what a 2012 trade would yield in 2015. Seems like a no brainer in this scenario that a lease is much better.

However, what I can't shake is the thought that the CLS is going to be such a great ride that I will really want to keep it long term --- say for like 10+ years. Based on how little I drive and how well I keep my cars it will only have 60,000 miles and will still look like new. I suspect the styling on this car will also age well. In this scenario, buying the car in such a low rate interest environment makes a whole lot of sense.

Vic55

I heard that MBCC reduced its top tier money factor to .00195 and if you do a direct debit pay you can drop to .00185.

Im considering a short term lease at 7500 miles per year, the residual is 68%...

pgordon888

Thanks for the info on the new mb mf rates. Is that residual on a cls63? What term?

Vic55

That residual is for 24 months at 7500 miles per year...


Also ask about the Conquest Program; if you own currently a certain marquis brand (Im not sure which ones qualify) you get 2k from MBCC towards your lease of purchase. Owning the 997TT qualifies me!!!!!!

pgordon888

Yes, I know about the Conquest Program. I already used it for my 2011 ML BTC lease with my registration from my salvaged BMW M3. In that case, it was worth $4K because they were really trying to move 2011s off lots with the redesigned 2012 MLs arriving. I got a $500 per month ($450 before taxes) $0 down lease on a $60K ML for 33 months.

MPCLS55

If you are on a 3 year plan, you need to lease that car. You are correct in the fact that you will get killed in trade value based on depreciation! Then again, buy it and I'll buy it from you in 36 months!!!!

pgordon888

It would be a great deal for you! Buying this car as a 3 year old CPO with 18K miles for $60K to $65K would be the most rationale and cost effective way to go. Most owners at this price point (myself included) will have also taken great care of their cars and I suspect my car would be in near new condition. However, I want the 2012 CLS63 now and not in 2014 and have the means to make that happen so I am stuck with this quandary.

Still don't know which way I will go but crunching the numbers some more I have determined that a 4 year purchase hold on this car is essentially break even on the value proposition as compared to a rolling 3 year lease scenario. In a 5 year+ purchase hold the purchase scenario is a much greater value than the lease assuming no major repair costs. I have found GEICO mechanical break down coverage a much cheaper alternative to factory after market warranties in the past to cover repairs in Y5, Y6, and Y7.

So the question I really need to answer is whether I will want to trade this car in 3 years or hold it for 5 + years. In a buy I could also modify the car, which I have done with my past cars, so that is also a factor to consider.

impex4

Hey Im looking to move into a CLS63 or possibly e63 (both pp...)
thank you very much for that info. (so this thread is very timely)

could you post or pm me the residuals for 24 and 36 months...and mf....this will help me get the car.....thanks again

EPDRB

I am considering a 2012 CLS63 and like you, want to do a 24 mo/7500 mi lease. I've heard about the 68% residual, but where are you getting the .00195 money factor? I asked my dealer about it and they assured me the MF was .00240 (for top tier). Now with that being said, I do not trust this dealer. They are usually wrong when it comes to lease rates. Would really appreciate some help. Thanks!

Vic55

They are trying to make rate on you... if you are the highest tier with MBCC the buyrate is .00195 currently and if you do ACH with your payments you can get to .00185.