Dr Chill

What would you consider a good lease deal on a new C32 that stickers around $53,000? I plan to put no money down except inception costs.

my401

I thought you posted 1st in Palm Beach for E55.

55 cabdriver

I leased an '03 C32 this past week: it came in at $750 a month for 36 months, 15k/mi a year, with about $3k down for cap cost reduction and taxes. I was able to get $2k off the $59k MSRP. This will be my primary daily driver for business. As an aside, I was #2 at my dealer for an E55, but with the market's continuing decline, I could no longer justify an additional $25-30k for what, in my mind, was marginally enhanced performance. ANd I had no need for the additional room or luxury. Make no mistake, the new E55 will be one heck of a car, but I'm just not in that league as long as I continue to retain my CLK 55 cab for weekends.

Frank_NJ

I leased a 2003 loaded with 15K miles a year, 36 months, $3k cap cost with Chase and the payment was $650 a month with taxes.

Frank_NJ

they discounted the car $2k

55 cabdriver

...I will ask Frank for help negotiating my lease!
Nice job! I could use that $100 a month in my pocket instead of the dealer's.

bluechipbmw

I finally got to test drive a C32 AMG this past weekend. Looking for advice on how to negotiate a lease.

I have 2 different quotes from dealers but they are off by alot from what Frank got.

One dealer gave me:
59% Residual
10k miles
MSRP 53,525
Lease payment = $905

59% Residual
10k miles
MSRP 53,525
Lease payment = $more than 905


need some advice.

Thanks in advance

Vic55

Ok lets help you out here. For the sake of argument lets agree that your cost of the car is the same as the MSRP and your term is 36 months. Here are my calculations on this lease for you:

MSRP 53525
Res % 59
Residual 31580

With these numbers your depreciation over 36 months is:

53525-31580 = 21980

Monthly depreciation is 21945/36 = 609.58

Since the dealer is quoting you 905.00 and I am assuming this includes monthly sales tax- you have a difference of 295.42 which is sales tax and lease service charges (interest equivalent). Using a tax rate of 8.25 % your taxes are around $68.97

Monthly payment 905-68.97 = 836.03 which means you are paying about 226.45 every month in interest on this lease. The interest or service charges are computed by taking the cost of the car, in this case MSRP, and you add the residual and then multiply it by the lease factor.

MSRP is 53525 and the residual is 31580 which equals 85105 and since your month charge is 226.45 your service factor is .00267 (rounded up). For the layman you take this factor and multiply it by 24 to get your approximate interest equivalent which is:

.00267x24 = 6.40

Based on these calculations your lease is too much IMO. If you are a tier 1 customer with 700 plus credit, your money factors should be under .00200- I just leased an M3 and my factor was .00180 which equals about 4.32%.

I have a feeling your quote is with Mercedes Credit which has good residuals but poor factors. If you got the same lease with a different bank offering .00180 (all other numbers the same) then your payment after the 8.25% tax would be 825.70. Thats an 80 dollar per month difference.

Remember that these numbers are easily changed based on the dollars down, and if the dealer is actually particpating in the money factor. They could have actually gotten a factor of .00180 for you but decided to bump you to .00267 so they could make that difference. This is the dealer making money on the lease rate. I hope this helps and feel free to post any questions.

bluechipbmw

Vic...Thanks for your reply.
Sorry to be a pain...I just have a few more questions for you:

How did you get 68.97? I am calcualting sales taxes by taking the MSRP * 0.0825 and then dividing it by 36. I get about $123. What am I doing wrong?

How did you get a month charge of 226.45? Just before u calculate the money factor?

To answer your question this is through Mercedes Credit. I was at one point last year at a 721 score but its probably less now.

My other question is if I decide to put money down and I am trying to calculate this manually before I see the dealer where would I factor the money down? Take it off the MSRP? The residual?

Sorry for so many questions...just trying to educate myself. Its been very frustrating dealing with these salesman. This one salesman on the phone today asked me why am I shopping around. I should pick a dealer and stay with them because shopping around doesnt make me look good especially if I am talking about dealers in NJ and CT. I told him that I am looking for someone that I have confidence in and so far I havent found it. ANd that I would be lucky if I am getting any money off the MSRP.

One last question: Do you think this is a smart move???? I rather purchase than lease but at the time I dont have enough money to put down as a down payment so I was thinking of leasing with my option of buying at the end. What do you think?

Thanks again for all your help!

Vic55

No problem helping thats why I am here.

68.97 is the tax on the depreciation and service charge amounts for each month. If your payment is 905 including tax then a payment of 836.03 plus 8.25% equals 905.

The 226.45 is the difference between the month depreciation of 609.58 and the payment before taxes of 836.03. The 226.45 is derived from using a money factor multiplied against the cost plus the residual.

Any money that you put down goes first to the following:

1. First monthly payment
2. Taxes and registration
3. Security Deposit if applicable

it can be in any order but your down usually covers the above costs and is called "drive off" or inception costs. Once you have covered these items any additional monies reduces the agreed upon cost of the car and in turn reduces your monthly payment. I used MSRP in your case as the agreed upon cost of the car but the cost could be more or less depending on the deal you get.

IMO I would lease the car, its a depreciating asset and a finance payment will be sky high if you dont have a large down. Just make sure your not paying too much in lease service charges because its seems like you are with the above scenario. Work the dealer first for the best cost on the car and then work them for the best lease rate. If you are keeping the car for the full term of the lease, Chase is a very good leasing company if you have good credit. Chase's residuals are generally high and their money factors are low. The only problem with Chase is that if you ever want to get out in the middle of the lease you are screwed because the residual is too high and the payoff is escalated. Any dealer taking in your car for trade early will hit with a low number and the payoff will be too high causing some severe negative equity.

my401

buy it and get over IT.:o

55 cabdriver

...although I eventually went with Chase, I found the following web site most helpful, and this would seemingly offer an additional alternative. I think this particular lease, using the lower residuals, might be better for someone who thinks that they might not complete the full term. The lower residuals are partially offset, evidently, by lower money factors. I believe that this broker uses US Bank. They are at: PrimeLease.com
Phone/Fax 305 361-9803, Racerpete@aol.com. I just happened to go with Chase through the dealer once he made some other concessions on MSRP. My deal was $750 a month for 36 month/15k miles, with $3k total at inception. As I have said here, not great, not terrible. But I would check with Pete.

bluechipbmw

First question which state did you purchase your vechile?

I just spoke to my dealer and ran your numbers by him. He is unable to match your lease.

The closest he came to me was:
cap cost reduction: $3,000
Inception and taxes: $4,400
Total money down 7,400
Miles: 10k a year
term: 39 months
Lease = $733

He also discounted the car for me to 1,500

or $5090 out the door and my payments would be $800. Still not close to you because you are putting less than me down and have a lower monthly payment.

He is under the impression that your $3k down did not include inception.

Is he right?

55 cabdriver

My discount was $2k off of the $59k. I'm in Iowa, a relatively low sales/use tax. (Which still doesn't begin to make up for the fact that the weather sucks.) I put $3k down on the car, the security deposit was waived to my Beacon score. The first month payment was addditional. The $750 (actually $748) includes 15k miles per year and license/tags. I still think Frank in NJ got the best lease deal. I recall his payment was $650 or thereabouts. Hope this helps.

my401

both of you are milking the price program. Are you both day traders? Hope you don't start shopping insurance!

Eurosport

wtf you saying milking the price program for?

smart people DO shop around and educate themselves on every single transaction.

stupid people throw money in the wind (or salesman's pocket )

Boo2

Smart people also only lease if they own their own business. Stupid people don't see the money wasted with a 59% residual.

55 cabdriver

...is a car that has been leased somehow worth less after three years of use and 45,000 miles than a car that was financed or paid for with cash? This is kind of like a thermos bottle...it had the ability to keep coffee hot and icewater cold. How does it know?