cbad_monkey

Nobody is responding in the finance area...so maybe I'll drop this here.

Never leased anything before but tempted too.

Wife stopped in at a dealer the other day and this is where we're at

2013 E350 Sport 4matic with P1 - Demo with 8k miles
10k is either done or will be done
MSRP: $59,865
Discount: $9,897.66
Sale Price: $49,967.34

$2995 down + first month and some taxes

27 months, 10k miles/yr
mf = .00127
residual: 40,320.45
monthly payments: $422.12 + tax

This seem reasonable? As said...never leased before, but based on depreciation + mf payment puts me at $357....question is how close should we push to get to that as we're still about $70 away? My wife said they were done dealing with her at present. Does that mf seem reasonable? residual? 67% fior 27mo?

I am a USAA member...does that give me any more benefit on a lease deal?

Thanks for any feedback

aprevo15

If you like to change up cars every few years then lease it. But if you like to keep your car for a long time then I suggest you buy it. No matter how good of a deal you get on a lease, in the end you have to return it and start over on another car.

CEB

Actually no. One can always buy out the lease.

cbad_monkey

question isn't really to lease or not to lease (though we're considering that too), but rather if this seems like a decent lease or not?

aprevo15

There are some good information on this thread if you haven't read it already.

https://mbworld.org/forums/e-class-w...-thoughts.html

TirednAchy

Assuming you don't have to lease in order to lower your payment, the only real question to ask about a lease versus buy decision is how different are the finance rates, as both are methods of financing.

Your money factor is .00127. Multiply that by 2,400, and you get your implied interest rate of 3.05%. This is a very aggressive mf/rate for a lease.

Your lease interest rate is almost always higher than the interest rate on a buy agreement because the company is obligated to take the car back, even if it is worth less than the residual--which is estimated up front. There are usually rules that protect the company from major depreciation associated with abnormal wear and tear, accidents, etc., but the company is not protected from a downturn in the car market, a bad upfront residual estimate, etc.

Leases are often hailed as superior because the company is said to be taking on the risk of depreciation. But, in reality, at least some, if not all of that risk is usually paid for by the customer through higher interest rates implied in the lease.

I've never leased either. I consider it nearly every time I purchase a vehicle, but the math has never made sense, given that I didn't need to lower the payment in order to afford the purchase.

Technically, the correct comparison to make is between the buy interest rate plus whatever premium you believe is in order to capture your own expected cost of unexpected depreciation, versus the lease interest rate, which includes a company-estimated risk premium. In your case, the company has cut the risk premium to nearly nothing. I would say it's a good lease deal, assuming you are satisfied with the price of the car.

Keep in mind that you are using the company's asset for the 27 months. So, the company charges you finance charges on the full price of the car, plus any fees built into the principle--not just the depreciation. If you have that factored in, then the depreciation portion plus the finance portion should equal the quoted payment, else they have misquoted something.

TnA

ghstudio

Given the MSRP, residual, length of lease and MF, I calculate that the monthly cost is $509 plus tax. That includes mercedes $795 origination fee. That's with no money down which is the only way you should do a lease....DON"T PUT MONEY DOWN.

You are quoted $422 a month or $11394 + $2995 or 14389 for the 27 months. You should only be paying $13743 for that lease for the 27 months.

My guess is that they marked up the $795 to $1095 which many dealers do and that would bring your payment using my calculations to $521 per month (with no money down) or $14067 over the life of the lease.

$14389 is pretty close...I'd tell the dealer that with no money down, you're willing to pay $520 a month and see how it goes.

Good luck...it's a great car.

cbad_monkey

They seem to have absorbed all fees - they just want the 2995 down + first month + upfront taxes required by our county.

I've been dealing with another dealer in town via email and they are offering $0 down - but they are charging me for the $1095 acquistion + $499 dealer fee + payment + tax. So out the door difference is about $1600 less in the second scenario and he's actually offering $399/mo payments.

We like the first guy better though so we're trying to work with him further. Going to see if we can get another $1k out of them and call it a day. That'd drop us to 13389. Would still be about $600 more out the door and an extra ~$20 a month but I can deal with that for the relationship.

This is why I buy cars on craigslist and ebay

TirednAchy

I get $357.64 as the payment before taxes, based on the info above. You're paying for $6,652 in depreciation over 27 months, financed at 3.048%. And you are paying monthly interest at (3.048%/12) for 27 months on the residual.

$255.22 (financed net depreciation) + $102.41 (monthly interest on residual) = $357.64

Not sure where the disconnect is between their $422 and your $357.64.

It's as if they are only giving you $1,295 credit for your $2,995 down payment. Is it possible there are $1,700 in taxes/fees being paid for by your down payment?

maguzma

My neighbor is leasing his 2013 E350 sport for $450 a month X24Months at 15K a year. The sticker was 58K and he negotiated $46K with $2400 down. He had to pay for DMV fees/registration and taxes. In reality, he is actually paying $600 a month for the next two years. My friend just picked up a lease from somebody in San Diego. The lease is for a 2012 E350 @14 months for $450 a month ($501 after taxes and fees). He had to pay for lease transfer ($695), DMV transfer fees ($57) and can drive the car for 1K a month. The first guy is paying much higher than my friend. The only issue I saw was that my friend had no choice in the color combination but his payments are far less then the other. He only leases cars and prefers it because every two-three years he gets a new car at the same price. Both have never purchased a car in years and promotes leasing. I guess it pays off if you have $$ to put down. My nieghbor does not take good car of his cars and I am suprised that he does not have to pay extra when he returns them. His last car (Range Rover), I do not think he every washed it and the rims had lots of curb rash. His wife's car was worse (GL450) it had scratches on the bumpers and the rims and looked like she use them to stop along curbs. she now drives a newer SUV and I do not know what the color is becaue of all the dirt. Leasing must work for those who do not like getting beatup on depreciation and want to drive a new car every 2-3 years.