Nahmeanz

Here's the situation,

I have a 2001 CLK430 Coupe with a little less than 60,000 miles that's paid off. I want to trade my car in for a CLS but I don't know whether I should finance or lease it. I don't intend to keep the car for more than 3 years. I don't really understand leasing and what the advantages or disadvantages are. As you can see with my CLK, I drive about 12,000 miles a year.

CE750

If you KNOW for a fact that you are keeping it for 3 years, and driving 12K/yr it's a no brainer.. lease.

Make sure you get good price, and a high as possible residual.

I leased my Volvo, and paid cash for my MB... one's a keeper and the other a temporary family hauler.

Nahmeanz

Can you explain what happens at the end of a lease? I know that when I'm done with financing, my car is all mine and worth whatever it's worth in the KBB (I'm expecting about $17,000 for a trade-in). But for example, let's say I'm financing the CLS, with a trade-in of the CLK(17Gs) for 60 months and then I decided after 36 months that I want to get another car. How does that compare to trading the CLK in to lease a CLS for 36 months, 15,000 miles a year? At the end of this lease how would my options be compared to trading in a financed CLS after 36 months?

ndabunka

Leasing can bite you in the butt at trade time or for ANY early end to term. If you are planning on leasing, you should also plan on holding the car for the entire term of the lease or else you will get hit HARD with fees and not given realistic trade values. You may even be "upside down" throughout the entire lease period if you have a high residual value. Lease on a CLS500 is between $973 (used $65K with non-MB leasing agency) and $1300/month for a 48-month term so they are not cheap. If you can put $20K down (projected value of your '01 430), your financing amounts will probably be under $950/month.

TMC M5

I would definitely recommend putting as little down (capitalized cost reduction) on a lease as possible. If the car is stolen or totalled in an accident most leases have gap insurance. Gap insurance will cover you for any difference in the insured value vs remaining payments (monthly and residual) on the car. However, if you traded your $17K car towards the lease... you would see $0 from the insurance company. The insurance company would payoff the remaining monthly payments and residual value to the lease company. Imagine dropping $17K and two weeks later the car is gone....can you live with that worst case scenario? You are better financing it with that much of a down payment. Given the same scenario, the insurance company would pay off the bank first and there would likely be a residual paid to you, up to the FMV of the car.

Good luck,

Tom

ndabunka

Clarification - The $20K down and payments outlines a PURCHASE and not a lease. I am saying that you should buy it before leasing. To get the motnhly costs down you should transfer the equity from the CLK into the CLS ONLY if it's a purchase. If you DO lease, then I agree that you don't want to put ANYTHING down on the car.