zigma

Hello All,


Is this a good deal on an E63 AMG? I've never leased before so I appreciate any help.



2014 E63 AMG S
36 month lease
10k miles /yr
$1461.05
$7600 down to cover Upfront Taxes, DMV Fees, Bank Fee & 1st Month’s Payment


As far as packages:
Black Nappa Lthr. w/cont. stitch/silver
Red Brake Calipers
Safety Belts in Silver
Power Tilt / Sliding Panorama Sunroof
Black Ash Wood Trim
AMG® Exterior Carbon Fiber Package: Carb
Additional AMG Carbon Fiber Components
: Carbon Fiber Trunklid Spoiler
: AMG Exterior Carbon Package
19-Inch AMG Twin 5-Spoke Forged Wheels
harman/kardon LOGIC7 Surround Sound Syst
Lane Tracking Package: Blind Spot A
Lane Tracking package code
Blind Spot Assist
Lane Keeping Assist
AMG Parking Assist Package: Surround
Parking Package (RVC & Parktronic)
Surround View Camera


To add, I love performance, my wife likes luxury. I also have an offer for a Nissan GT-R but ... if the price is right, maybe make the wife happy for the next 3 years.


Thank you all.

kash2014

Check out the edmunds forums, they have an active lease forum from what I can remember

It would help if you could tell the members
MSRP,
negotiated sale price,
residual price,
money factor,
any MSDs
any money being rolled ie from a previous lease into payment

good luck

zigma

MSRP,
negotiated sale price: 112 MSRP, offered to me at 106.
residual price: Dunno, 51%?
money factor: I don't know
any MSDs: What are MSDs? I'm sorry, first time.
any money being rolled ie from a previous lease into payment: absolutely not.

Thank you.

cbeck44

Without those critical numbers, you are entering a lions den with a butter knife.

hx_guy

Ask the dealer what the residual on the car is and what the money factor is. I would also get a break down of the up front fees, seems a bit high if it's truly just for fees and not an actual down payment toward the purchase price.

MSD's are Multiple Security Deposits. They are optional but they allow you to drop the money factor (interest rate) which can be a great return on your money. For example, when we leased our E350, we did the maximum of 10 MSD's x $500, so we gave a security deposit of $5000 on a 24 month lease and it dropped our monthly payments by $74/month. Over 24 months, that was $1,776 return on the $5,000, which we received back at the end of the lease. It's better to do something like that instead of putting money down toward the vehicle price because you actually get the money back.

What part of the country are you in?

zigma

Thank you for that information. I appreciate it. I am located in New York City. If MSDs are optional, I only get them back if there isn't an accident etc, correct?

zigma

Also, if the taxes are upfront, a chunk of that 7k are basically taxes, which equals to about 4700 bucks. Factor in the 1st month payment and then dealer, tags, etc... I figured 1400 OTD for a 110k car isn't a terrible price but, then, would the car be worth more or less at the end of the lease? I can factor that in as well?

hx_guy

Is that a NY thing with taxes up front? Because here in Arizona taxes are paid on each month payment (on the payment amount, not on the whole price of the car...which is one of the benefits of a lease, that you only pay sales tax on the portion of the car you use not on the whole thing).

I believe with MSDs you still get your money back even in the event of an accident as insurance would cover the cost of the car.

Things that would get held from the MSD are over mileage or excessive wear and tear, but those you would have to pay for anyway out of your pocket. In the case of MSDs, they would just hold those amounts and refund the difference.

Here is a discussion talking about leases and MSD's that I responded to in the past as well...
http://forums.edmunds.com/discussion...questions/p113

zigma

I believe that the reason why they factored in the taxes as a lump sum up front is to make that monthly payment lower. You can roll that cost over to the payment.

The tax rate in New York, NY is about 8.875 so that would make the payment go up by about 125-150 a month.

hx_guy

Can they do that though? Seems odd. I would get a a breakdown of all the fees, make sure they aren't just throwing out there generic "For taxes and fees and such" language and $1461.05 doesn't already include the NY sales tax (as in $1,341.95 lease amount + $119.10 taxes = $1461.05 total payment.

I'm not saying they are trying to do anything fishy, but just double check. On my Audi lease, I actually ran into this where they tried to double tax me, no joke. They added "Sales tax" as a line item of the price and then were also charging monthly sales tax. I didn't actually catch it until a day later, went to the dealership and they did a new contract the correct way. The finance guy was let go a short while later, not sure if because of that particular event or if they had a track record.

stale-bread

Wow. Great catch.

zigma

Good catch indeed. I called them out on it.

Money Factor is .00200 (Includes Auto Pay Discount)
Residual is 60% (The residual will most likely drop next month. So I can guarantee these numbers until 4/30)
Breakdown
$4668.04 (Upfront NYC Tax)
$366 (DMV Fees – New Plates, NYS Registration, NYS Inspection, Doc Fee)
$995 (Bank Fee)
$94.96 (Tax on Bank Fee & Doc Fee)
$1461.05 (1st Month’s Payment)

With Taxes in the payment you are looking at $1613.58 for 35 Payments and $3069.54 Due at Signing.

hx_guy

Ok I'm a little confused...so are you paying the $4668.04 tax up front (out of pocket) or is it being added to the monthly payment? Seems like it's being rolled into the payment since $3069.54 is due at signing, otherwise it would be $7,737.58 due at signing.

zigma

I have the option of rolling the taxes on to the payment OR paying them upfront.

If I pay them up front, payments are going to be in the 1461, if I roll them into the payment, it will be 1613.

hx_guy

Hmm, something is coming out on the lease calculator...

Say you don't pay the sales tax up front and just add it to your monthly payment. The payment should be $1424.18 + $126.40 = $1550.58, so how are they getting $1613.58? That's a difference of $63/month or $2,268 over the life of the lease.

And if you do pay them up front, then the payment should be $1424.18 not $1461.05.

Somewhere they are adding additional costs into the lease. Ask them to explain. Interest is a little high too but I guess you can't do much about that (0.002 money factor = 4.8% APR)

Here is a lease calculator where you can plug the numbers in yourself: http://www.free-online-calculator-us...alculator.html

Also, look into the MSDs. If you do 10 MSDs, it would drop your money factor to .0013 and make your payment $1418.57 including tax, a savings of $132.01/month or $4,752.36 over 36 months. Problem is you'd have to give a deposit of $14,500 which is steep, but the return on it is pretty decent.

ghstudio

Time to get yourself to NJ to lease the car. Multiple security deposits are not allowed in NY, but if you lease the car in NJ (irrespective of where you register the car) you can take advantage of multiple security deposits which will lower your MF and save you significant $'s each month. This only works on cars that don't have a promotional money factor (eg. the e350 has a promotional mf right now).

You want to make the maximum number of security deposits (I think it's 7) which you get back at the end of your lease. For that, mercedes drops the mf by .00007 for each one...or .00049 if you make the maximum deposits. That will save you at least $50 a month in payments...and you get the security deposit money back. Great deal.

I was heavily involved in that edmunds thread as well...

hx_guy

They allow up to 10 security deposits, at least they did 2 years ago when we leased, not sure if it has changed.

Based on the calculations I made earlier, the savings you get per month on your $14,500 deposit would equal to a 32.8% return on your investment.

zigma

You are god. When I asked about MSDs they said they would not be beneficial for me as the consumer. When I said ... wait, how isn't a lower interest rate NOT going to be a good thing for me, the rep I respectfully asked to give me a call back.

When I said that I would look into getting the vehicle from NJ, I could tell they choked and politely asked that I give them the chance to remain competitive.

I think you just saved me a crap load of money.

zigma

When you say return on investment, can you elaborate? Is my security deposit going to be collecting interest? I figured it would give me the opportunity to lower my interest rate.

They also countered and asked that if I paid the balance in full, in one shot, I would save an extra $5200. Obviously, I said no but that was a pretty attractive figure but my accountant would probably frown upon that.

hx_guy

The security deposit isn't collecting any interest (at least not for you :P ), I was just using it as an example to show the value of doing multiple security deposits.

Say you didn't do the MSDs and took that money and invested it somewhere with a guaranteed return over the 3 years, it would be as if you got a 32.8% return on your money.

kash2014

Also I noticed you are putting down a large down payment. When I was looking to lease I remember that unlike the MSDs, if an unfortunate event were to happen and your vehicle was declared a total loss, you would be out the 7600 dollar down payment, if you rolled it in, well that is what GAP insurance is for.

correct me if I'm wrong though as leases are complicated!

ghstudio

Divide the amount of money you saved by the amount of the security deposit. For example, if you kept that money in a bank for 36 mos, you would earn 1% per year. $5000 at 1% a year gives you roughly $5160 at the end of three years.

Now give the $5000 to mercedes and save $50 a month for 36 months....or $1800. At the end of the lease, you get the $5000 back and you've saved $1800.

Another way to think about it....if you put that $50 that you now aren't giving mercedes into your bank, you would have $1800 (ignoring interest) in that bank account at the end of three years...and they give you a check back for $5000 which you put in the bank....so you now have $6800 in your bank account. I'd rather have $6800 than $5160

Does that help?

In fairness, few auto salesmen understand multiple security deposit and surprisingly, few finance managers at dealers understand them. They don't know how to calculate them and they try to fake it by saying it's such a small amount it won't matter....or "we don't do mutliple security deposits"....or they try to scare you that you won't get the money back which isn't true...it's a security deposit. I have personally sat in a couple of finance manager's office forcing them to take out the manual or call mercedes to find out about multiple security deposits before they say anything. Most are surprised to hear about the program when they call mercedes (or lexus or infinity, etc).

You need to be sure they keep the residual value the same...and they reduce the money factor by .00007 for each security deposit. Each security deposit is your monthly payment (without taxes) rounded up to the nearest $50.

By the way, with or without multiple security deposits, use autopay..that will drop your mf by .0001.

One final note...make sure that mercedes service is included in the lease. It's treated as a feature...and for features you really only pay the difference between 100% and the residual value. Make sure they calculate the lease this way and that they don't try to just take the full cost and divide it across the lease....it's a unique mercedes lease thing....suddenly mercedes dealer service is actually cheap. (get the price with and without maintenance....multiply both by the length of the lease and look at the difference in price. It should be a fraction of the "list price" of the maintenance package. If it's not..and it's close to the full price, they did it wrong).

Now you are armed....go get em...

hx_guy

That is correct. Which is another reason why the sales tax should not be paid up front, what if you don't keep the car for the whole term? I doubt you'd get any portion of that sales tax back.