Listing High Mileage in Lease - No Advantage!
08-11-2007, 09:14 AM
#1
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‘08 E-350 Sport, C6 Vette & Harley Davidson
Listing High Mileage in Lease - No Advantage!
When I signed my 2 year lease, I listed 10,000 miles. However
it would appear that I have somewhat ‘undershot’ my estimate.
(I got the car 1 month ago and have 3000 miles on it.)
I had inquired about uping my mileage estimate, and the lessor
called me yesterday. Bottom line: you save Nothing by giving a
higher estimate. (I knew that any “overage” is @ .25 per mile.)
But, I had thought that if I named a higher estimate in the lease
that the bottom line mileage charge would be better. But, NO! It
doesn’t matter! The .25 is blended into your payment, at exactly
.25!
So .. considering the time value of money .. there is NO need to
name anything over 10,000, when you sign your lease. (There is
one exception: If you have a problem saving and paying that big
lump at the end will kill you, then maybe you should let MB hold
your money for you. Another ‘forced savings account’ example.)
jimm
==========
‘08 E350 Sport, P2, Black/black, Parktronic,
Voice, Bluetooth, Burl Walnut, Split rear seat,
Wood/leather steering wheel
it would appear that I have somewhat ‘undershot’ my estimate.
(I got the car 1 month ago and have 3000 miles on it.)
I had inquired about uping my mileage estimate, and the lessor
called me yesterday. Bottom line: you save Nothing by giving a
higher estimate. (I knew that any “overage” is @ .25 per mile.)
But, I had thought that if I named a higher estimate in the lease
that the bottom line mileage charge would be better. But, NO! It
doesn’t matter! The .25 is blended into your payment, at exactly
.25!
So .. considering the time value of money .. there is NO need to
name anything over 10,000, when you sign your lease. (There is
one exception: If you have a problem saving and paying that big
lump at the end will kill you, then maybe you should let MB hold
your money for you. Another ‘forced savings account’ example.)
jimm
==========
‘08 E350 Sport, P2, Black/black, Parktronic,
Voice, Bluetooth, Burl Walnut, Split rear seat,
Wood/leather steering wheel
Last edited by jimm; 08-11-2007 at 03:15 PM.
08-11-2007, 11:39 AM
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E500
Interesting, never did the math when comparing. On the other hand, I only leased one time around 6 years ago. If I ever do so again, I will compare and run the numbers. Thanks.
08-11-2007, 04:16 PM
#3
MBWorld Fanatic!
I did the math and it was approx. 7-8 cents to prepay the mileage vrs. 25 cents afterwards.
There is a 2% lower residual to go from 12k to 15k. That works out to roughly $40 a month on a $66,000 car for a 33 month lease. You get an extra 250 miles a month or- $40/250= $.0625 plus the interest.
There is a 2% lower residual to go from 12k to 15k. That works out to roughly $40 a month on a $66,000 car for a 33 month lease. You get an extra 250 miles a month or- $40/250= $.0625 plus the interest.
08-12-2007, 05:40 AM
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‘08 E-350 Sport, C6 Vette & Harley Davidson
I’m certainly open to be corrected. But - the MB Financial girl insisted that
there was no difference.
Maybe she meant that there was no difference after the lease had started
and you wanted to up the mileage .. but, not if you would have expressed
a higher mileage at the lease’s inception.
I’m glad that you guys were able to calculate this. But - when you did, did
you consider the “present cash value” of the EXTRA that you are paying in
in advance with the payments?
This is quite interesting. It’s very hard to outsmart these financial experts.
jimm
there was no difference.
Maybe she meant that there was no difference after the lease had started
and you wanted to up the mileage .. but, not if you would have expressed
a higher mileage at the lease’s inception.
I’m glad that you guys were able to calculate this. But - when you did, did
you consider the “present cash value” of the EXTRA that you are paying in
in advance with the payments?
This is quite interesting. It’s very hard to outsmart these financial experts.
jimm
08-14-2007, 04:46 AM
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2008 E350
I’m certainly open to be corrected. But - the MB Financial girl insisted that
there was no difference.
Maybe she meant that there was no difference after the lease had started
and you wanted to up the mileage .. but, not if you would have expressed
a higher mileage at the lease’s inception.
I’m glad that you guys were able to calculate this. But - when you did, did
you consider the “present cash value” of the EXTRA that you are paying in
in advance with the payments?
This is quite interesting. It’s very hard to outsmart these financial experts.
jimm
there was no difference.
Maybe she meant that there was no difference after the lease had started
and you wanted to up the mileage .. but, not if you would have expressed
a higher mileage at the lease’s inception.
I’m glad that you guys were able to calculate this. But - when you did, did
you consider the “present cash value” of the EXTRA that you are paying in
in advance with the payments?
This is quite interesting. It’s very hard to outsmart these financial experts.
jimm
You get lower rates on a 7,500 mile lease than on a 10,000 or 12,000 mile lease.
