CLFREAK

My bank has given me the option to purchase (finance) my 2001 CL600 out of a closed-end lease which costs me $1100/mo. and expires in May of next year. If I keep the lease, all I have to do is hand over the keys and pay an exit fee of $395. That's it. The car has 35K miles and has a Lorinser body kit and $5000 worth of aftermarket rims/tires.

Now, if I opt to purchase and finance, the bank will sell me the car for $48K which is a $10K discount from the current balance of the lease.

The payment on the loan will drop to $824/mo., so I'm saving almost $300 mo. + I get to keep the car for as long as I want.

2 things to take into consideration:

1) Whether $48K is a good deal considering the accelerating depreciation on the CL (current wholesale auction value on the car is about $44-45K).

2) If I wait longer to do this deal, I will only benefit, as the purchase will be re-negotiated at an even lower price, however, the longer I hold the lease, the more I'm out the difference in savings.

Let's hear it from the experts.

Jud Chapin

Do you have an extended warranty for this vehicle? This would be a major item for me. I have an '02 CL500 which has had it's share of problems and in talking to MB techs, they advise never to own one w/o warranty. As I'm sure you know, these cars have more electronics than an Apollo moon rocket.
As for the price, that appears in line. If you own a business, though, or can deduct car expenses, generally a lease is more attractive than ownership from a tax write off standpoint. Good luck!

CLFREAK

Yes, I forgot to mention, I do have an extended warranty.

red00lght

Good thing about the extended warranty. I just asked my MB service advisor (who actually seems very knowledgeable) about keeping my 03' CL500 and he said don't keep it more than 5-10 years unless you are prepared to dump a load of cash into maintaining it. From what I've already seen with all the plastic parts/trim falling apart, I believe him!

Jud Chapin

For sure, I've been told the same thing by MB techs. I've had my '02 since
2/03 and it's been one thing after another. In fact, this car has had more problems (all electronic) than my '76 Vette and '91 Mark combined, both of which cars I bought new. And they can say all they want that it's just the electronics with the CL, but my Lincoln (15 years old and 150K miles) has it's share and I've had next to no trouble with them.

GIRTHBOY

How does the CL compare in reliability to a Porsche 911 turbo or even a regular Porsche 911?

alexgreggs

I guess if my warrenty ran out a few weeks ago I am unable to purchase an extended?

Alex

Jud Chapin

I would start by calling MB to see what is available. I wouldn't buy anything until I discussed it with your local MB dealer as these are the guys that deal with warranty companies, and they should know the good, the bad, and the ugly. If they do suggest one, run that company thru MB forums such as this to see if anyone has had any dealings with them.

mjr24

I would agree that you better be prepared to put alot of money into the car if you do not have a warranty.
Also, it really depends on why you want the car and how long you will be keeping it. Reason is....yes, your payments will drop to $835...but at the same time....in 5 years when the car is 9-10 years old, do you still want to be paying $835 every month for it?
I pay $940 on my CL now (buying) and I am selling it soon, before the new model comes out. I could justify $940 a month if it were the new style...but in another year...with the mileage I drive...I am not going to want to keep paying $940 a month for an older body styled car w/100k miles, let alone doing it until 2008 when the car will be paid off.

CLFREAK

Like I said, I have an ext. warranty, so I'm okay there.

The nice thing about a regular bank loan is that I can sell the car anytime without owing any balloon, unlike the lease, so, I wouldn't have to wait; I can keep enjoying it until the new one comes out or go for something entirely different. If I stick to the lease, then I have to give it up in May and cannot extend it a day further. I'd rather call the shots. I just want to be in the car right if I go for the loan. I don't plan on keeping it past the end of 06 unless circumstances dictate otherwise.

The bank has given me the $48K figure for now. My thinking is that if I wait it out until after the first of Jan., we will be in a new year, and the car should take another big drop in value at which point I might be able to negotiate an even better deal, like $45K. What do you think? I mean can you go wrong with owning at $45K?

mjr24

You obviously do not put enough miles on it to where you will lose much $$ as a result of that. As you said, you can always sell it whenever if you decide that is what you want to do.

Apparently, the new CL is not coming out until next December, so the car is still new for another year. Although the car will be 1 year older in January, the mileage will be that much less per year at the same time, but mileage does not add as much value (when your mileage is below average) as another year on the car will decrease value.

In other words, yes....wait until that lease is about up to negotiate. Why? The new model will really be right around the corner....not to mention the bank will sweat a little more knowing this and knowing they do not have a deal yet. The number 1 thing to do when buying a lease is DO NOT SHOW interest in the car. That is how they negotiate lower. Once April rolls around, I bet you get it for $45k easy, if not less. One model year added on can literally takes thousands off the car's price.

SJRAMROD

I've leased several vehicles in the past and have never bought the vehicle after or during the lease. I personally don't think that it is a smart business move. You're taking away the benifit of leasing the vehicle to begin with!

Bottom line is........do you really want to be paying 8 to 10 years on the same vehicle? That's crazy! Sell the wheels and tires to help with a down payment for a "cap cost reduction" and start out all over again with another vehicle. My $.02!

CLFREAK

Paying for 7-8 years on a loan? Unlike a closed-end lease, a loan allows me to liquidate the car and terminate the loan anytime I want. As long as I buy the car out from the lease at the right price and at the right time, I think it makes way more sense than being stuck with the terms of lease at this point. As for the tax deductibility, that's pretty insignificant this late in the term.

Jud Chapin

Out of curiosity, why is the tax deductibility insignificant?

CLFREAK

There are only a few months left on the term on the lease, only a few thousand bucks, so the tax benefits at this point are no longer a factor in deciding to keep or not keep the the lease. I simply don't like the fact that on a closed-end lease, the bank calls the shots in that you either have to come up with the balloon (which would not make any sense) or say goodbye to the car which I may not want to do. The loan lowers my payments and gives ME the option as to when I want out of the car (I would need to sell it), plus, no balloon.