2019 E Sedan build dates
MBWorld Fanatic!
Joined: Aug 2004
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From: Tampa, FL
2019 E450 4Matic & 2018 E400 4Matic
Let's be real. The big orange man in the WH can huff and puff all he wants, but he is not getting tariffs on EU cars. He would single handedly destroy the automobile industry as we know it, put hundreds of thousands of people out of work and open the door to one of if not THE worst recessions in our history. Even his GOP lynch-men have publicly stated they plan to halt the stupid study about this. Should there be better trade relations on a world scale with the US? Absolutely. But putting huge tariffs on imports will only destroy the economy in rapid pace. It's not going to happen.
Super Member
Joined: May 2018
Posts: 554
Likes: 63
From: Virginia
2019 E450 Cabriolet, 2020 GLS450
Can we please stick to talking about MB cars and keep politics out of it? I really don’t care what side of the isle anyone is from (including myself!)! it’s been so nice browsing this non-political forum as a breath of fresh air from other social media.
Thank you :-)
Thank you :-)
MBWorld Fanatic!
Joined: May 2018
Posts: 3,048
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From: Long Island, NY
2019 E 450, 2016 E350 4matic (retired), 2018 Ford Edge Sport, 2008 Porsche Boxster
Dear Visualguy:
Here is how taxes and tariffs work in New York when you lease:
You multiply the lease payment times the number of months. For example, $800 a month for 36 months is $28,800. NY State plus my Nassau County sales tax is 8.625%, That tax is due on the $28,800, $2484. The dealer then pays that tax. As the lessee you have two options: You can pay the tax at lease inception or have the tax rolled into the lease payment.
In New York it gets a bit "tricky" if you roll the lease payment into the lease: New York then considers the advancement by the dealer to New York of the tax $2484 to be a "loan" to you, and hence a "taxable" event. So, in effect you are paying a tax on a tax. So, you take the $2484, the tax on this amount at 8.625%, $214.25, total $2698.26 and add this into the lease. Then you multiple $2698.26 times the money factor (interest) and this total figure is then divided by the number of months and added into the lease payment.
As you can see the tax is not residualized.
In exactly the same manner the tariff, having been paid by MB to US Customs will be added into the lease payment.
Now it may be true that the present 2.5% tariff is built into the MSRP, but you can bet you last bottom dollar MB is not going to residualize a 25% ($16,000) tariff.
As you know the residual on a 36 month, 10,000 mile per year lease is 61%. That means on a $16,000 tariff, MB would be "eating" 61% or almost $10,000. IMO this is not going to happen.
Here is how taxes and tariffs work in New York when you lease:
You multiply the lease payment times the number of months. For example, $800 a month for 36 months is $28,800. NY State plus my Nassau County sales tax is 8.625%, That tax is due on the $28,800, $2484. The dealer then pays that tax. As the lessee you have two options: You can pay the tax at lease inception or have the tax rolled into the lease payment.
In New York it gets a bit "tricky" if you roll the lease payment into the lease: New York then considers the advancement by the dealer to New York of the tax $2484 to be a "loan" to you, and hence a "taxable" event. So, in effect you are paying a tax on a tax. So, you take the $2484, the tax on this amount at 8.625%, $214.25, total $2698.26 and add this into the lease. Then you multiple $2698.26 times the money factor (interest) and this total figure is then divided by the number of months and added into the lease payment.
As you can see the tax is not residualized.
In exactly the same manner the tariff, having been paid by MB to US Customs will be added into the lease payment.
Now it may be true that the present 2.5% tariff is built into the MSRP, but you can bet you last bottom dollar MB is not going to residualize a 25% ($16,000) tariff.
As you know the residual on a 36 month, 10,000 mile per year lease is 61%. That means on a $16,000 tariff, MB would be "eating" 61% or almost $10,000. IMO this is not going to happen.
Member
Joined: Dec 2017
Posts: 207
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Audi S5
JTK44,
It's a problem for MB only if the increased tariff goes away before the car is returned. If the tariff stays, then used car prices will be higher as well, so no problem with the residual. If the tariff is eliminated, then suddenly the car will be worth less when you return it, and they will have to eat the difference.
My expectation is that we will see somewhat lower residual percentages when leasing after the tariffs are imposed to compensate for this risk. The tariff will be folded into the price and residualized just like today, but the residual percentage will be a bit lower than it is now.
It's a problem for MB only if the increased tariff goes away before the car is returned. If the tariff stays, then used car prices will be higher as well, so no problem with the residual. If the tariff is eliminated, then suddenly the car will be worth less when you return it, and they will have to eat the difference.
My expectation is that we will see somewhat lower residual percentages when leasing after the tariffs are imposed to compensate for this risk. The tariff will be folded into the price and residualized just like today, but the residual percentage will be a bit lower than it is now.
MBWorld Fanatic!
Joined: May 2018
Posts: 3,048
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From: Long Island, NY
2019 E 450, 2016 E350 4matic (retired), 2018 Ford Edge Sport, 2008 Porsche Boxster
Anything is possible, but I believe that tariffs, like a tax will, not be residualized. A tariff is a form of tax - it is collected and is not a cost of manufacturing.
If residuals are lowered, then the monthly payment goes up. As nearly 70% of E and S class are leased, Tariffs and lower residuals will substantially increase the monthly payments.
To the 30% who buy, they will think twice if the MSRP will be increased 25% - knowing that if they wait in all likelihood the tariffs will be dropped.
If there are 25% tariffs the real winners are owners of late model cars as their value will go up:
If residuals are lowered, then the monthly payment goes up. As nearly 70% of E and S class are leased, Tariffs and lower residuals will substantially increase the monthly payments.
To the 30% who buy, they will think twice if the MSRP will be increased 25% - knowing that if they wait in all likelihood the tariffs will be dropped.
If there are 25% tariffs the real winners are owners of late model cars as their value will go up:
Member
Joined: Dec 2017
Posts: 207
Likes: 19
Audi S5
No doubt that both buyers and those who lease will be impacted significantly by such tariffs.
If you think that the tariffs will go away within 3 years, then leasing may make more sense than it normally does, especially if the residuals aren't reduced much compared to what they are now. The scenario you describe where the new tariff isn't part of the residualized price is not going to happen - too extreme and doesn't make sense unless the tariffs were going away for sure.
As to the tariffs going away, remember that the 25% tariff imposed by the US on light trucks has persisted since the 60s, and was just extended for another 20 years in the US trade agreement with South Korea. Such tariffs are very sticky once imposed because they change how the industry operates and develop a powerful constituency in the industry for keeping them once the industry adjusts to rely on them and on higher prices.
If you think that the tariffs will go away within 3 years, then leasing may make more sense than it normally does, especially if the residuals aren't reduced much compared to what they are now. The scenario you describe where the new tariff isn't part of the residualized price is not going to happen - too extreme and doesn't make sense unless the tariffs were going away for sure.
As to the tariffs going away, remember that the 25% tariff imposed by the US on light trucks has persisted since the 60s, and was just extended for another 20 years in the US trade agreement with South Korea. Such tariffs are very sticky once imposed because they change how the industry operates and develop a powerful constituency in the industry for keeping them once the industry adjusts to rely on them and on higher prices.
Junior Member
Joined: Jun 2018
Posts: 19
Likes: 0
2019 E450 4Matic
Hi All, I heard from my dealer yesterday. Car was ordered on April 5 with HUD, 12.3 inch screen and all assistive electronics. I was told "Your new E450 is at the port awaiting the launch/release date by Mercedes Benz. 2019s are not due to be released prior to September 1". Well, at least the build was not delayed.
MBWorld Fanatic!
Joined: Aug 2004
Posts: 3,447
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From: Tampa, FL
2019 E450 4Matic & 2018 E400 4Matic
Hi All, I heard from my dealer yesterday. Car was ordered on April 5 with HUD, 12.3 inch screen and all assistive electronics. I was told "Your new E450 is at the port awaiting the launch/release date by Mercedes Benz. 2019s are not due to be released prior to September 1". Well, at least the build was not delayed.
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Junior Member
Joined: Jun 2018
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Likes: 13
BMW 740i
Tariffs
Juncker can't avert these tariffs. All he can offer is more discussions with the EU and trying to influence non-EU countries. The articles you cited basically say that it's virtually hopeless and the EU is getting ready to strike back. It is a foregone conclusion, unfortunately.
"After talks at the White House with E.U. officials, Trump announced in a joint Rose Garden appearance that the delegation agreed to increase imports of soybeans and liquefied natural gas. Both sides agreed to work toward the goal of "zero" tariffs and subsidies on non-auto industrial goods and to "resolve" recent tariffs that both sides have imposed."
MBWorld Fanatic!
Joined: Aug 2004
Posts: 3,447
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From: Tampa, FL
2019 E450 4Matic & 2018 E400 4Matic
For those doom and gloomers, it appears President Trump's strategy is working and we will not have a trade war, rather we will get tariff concessions from the EU, commitment to purchase more US goods, and the auto market looks stable at this point. In fact, I would not be surprised if tariffs on EU cars go down a little bit over the next year though the official tentative agreement is to exempt the auto industry from current negotiations. Here is a snippet of today's announcement:
"After talks at the White House with E.U. officials, Trump announced in a joint Rose Garden appearance that the delegation agreed to increase imports of soybeans and liquefied natural gas. Both sides agreed to work toward the goal of "zero" tariffs and subsidies on non-auto industrial goods and to "resolve" recent tariffs that both sides have imposed."
"After talks at the White House with E.U. officials, Trump announced in a joint Rose Garden appearance that the delegation agreed to increase imports of soybeans and liquefied natural gas. Both sides agreed to work toward the goal of "zero" tariffs and subsidies on non-auto industrial goods and to "resolve" recent tariffs that both sides have imposed."
Member
Joined: Dec 2017
Posts: 207
Likes: 19
Audi S5
For those doom and gloomers, it appears President Trump's strategy is working and we will not have a trade war, rather we will get tariff concessions from the EU, commitment to purchase more US goods, and the auto market looks stable at this point. In fact, I would not be surprised if tariffs on EU cars go down a little bit over the next year though the official tentative agreement is to exempt the auto industry from current negotiations. Here is a snippet of today's announcement:
"After talks at the White House with E.U. officials, Trump announced in a joint Rose Garden appearance that the delegation agreed to increase imports of soybeans and liquefied natural gas. Both sides agreed to work toward the goal of "zero" tariffs and subsidies on non-auto industrial goods and to "resolve" recent tariffs that both sides have imposed."
"After talks at the White House with E.U. officials, Trump announced in a joint Rose Garden appearance that the delegation agreed to increase imports of soybeans and liquefied natural gas. Both sides agreed to work toward the goal of "zero" tariffs and subsidies on non-auto industrial goods and to "resolve" recent tariffs that both sides have imposed."
Senior Member
Joined: Jul 2018
Posts: 468
Likes: 91
From: Port St. Lucie, Fl
2026 GLE 450 (Black on Brown Saddle)
Yesterday afternoon (July 26th), my salesperson informed me of another delay! Certification of engines is being attributed. No scheduled delivery date. I think is time to look for alternative vehicles. Maybe another CLS or GLE AMG 43.
Super Member
Joined: May 2018
Posts: 554
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From: Virginia
2019 E450 Cabriolet, 2020 GLS450
if what he says is true, it’s not really a delay at this point. The earliest these cars were due to be released was late August / September. That’s still anywhere from 2 to 6 weeks.
Senior Member
Joined: Jul 2018
Posts: 468
Likes: 91
From: Port St. Lucie, Fl
2026 GLE 450 (Black on Brown Saddle)
Super Member
Joined: May 2018
Posts: 554
Likes: 63
From: Virginia
2019 E450 Cabriolet, 2020 GLS450
don’t follow you. Your dealer is saying we are now past September? my dealer says MBUSA doesn’t tell them anything. They never find out about releases or delays. That the cars show up when they show up and to take anything that doesn’t come from an official MBUSA statement with a grain of salt.
Who is your dealer and what, exactly, is his source?
Who is your dealer and what, exactly, is his source?
Senior Member
Joined: Jul 2018
Posts: 468
Likes: 91
From: Port St. Lucie, Fl
2026 GLE 450 (Black on Brown Saddle)
don’t follow you. Your dealer is saying we are now past September? my dealer says MBUSA doesn’t tell them anything. They never find out about releases or delays. That the cars show up when they show up and to take anything that doesn’t come from an official MBUSA statement with a grain of salt.
Who is your dealer and what, exactly, is his source?
MBWorld Fanatic!
Joined: Aug 2004
Posts: 3,447
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From: Tampa, FL
2019 E450 4Matic & 2018 E400 4Matic
Super Member
Joined: May 2018
Posts: 554
Likes: 63
From: Virginia
2019 E450 Cabriolet, 2020 GLS450
4th quarter starts Oct 1st
MBWorld Fanatic!
Joined: Aug 2004
Posts: 3,447
Likes: 333
From: Tampa, FL
2019 E450 4Matic & 2018 E400 4Matic
oops......you're right. I hope people don't have to wait till October for their cars already sitting at VPC's until October. For me, my just recently ordered car won't likely arrive in the US till October anyway, so for me, it's not an issue. But I know it's VERY frustrating for those who's cars are built and just sitting there having to wait for someone to flip a switch and let them truck to the dealerships. And financially, I don't see any upside to MBUSA holding these cars?
MBWorld Fanatic!
Joined: May 2018
Posts: 3,048
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From: Long Island, NY
2019 E 450, 2016 E350 4matic (retired), 2018 Ford Edge Sport, 2008 Porsche Boxster
Just a thought: Maybe they hold to move current inventory of 2018 in stock at dealerships?
In any event the reason does not matter: You ordered the car, you have the price fixed and it as an asset you will probably hold for 3 years or more so delivery in September, October or beginning of November in the big picture really does not matter.
These are what I call "First World Problems!"
In any event the reason does not matter: You ordered the car, you have the price fixed and it as an asset you will probably hold for 3 years or more so delivery in September, October or beginning of November in the big picture really does not matter.
These are what I call "First World Problems!"
MBWorld Fanatic!
Joined: Aug 2004
Posts: 3,447
Likes: 333
From: Tampa, FL
2019 E450 4Matic & 2018 E400 4Matic
