mcsmcs1

Best so far was 8.5% off on an E450 allocation build about to freeze.

CaptainE

rbrylaw

Thanks

JTK44

For my past four cars, two BMW 5 series, my present E350 and my wife's Ford Edge Sport, my first time in the dealer was to pick up the car. Savvy dealers know that there are a lot of sales out there to be had over the Internet and that a lot of buyers know exactly what they want, do not need a test drive or explanations by salespersons and most important that a lot of people have better ways of spending 2 to 3 hours than going to a dealership.

What I have done is compose a letter setting forth the car and equipment I want, send it to 1) the Internet manager and 2) the sales manager. I ask each dealer to give me their best price. 80% of the dealers respond, but the prices can be quite different. I then "keep" the best quotes and discard the balance. I then contact the dealers with the best quotes by phone and see if in fact that is their best quote. Sometimes it is and sometimes it isn't. If the best quote is not my local dealer I give them a call to see if they can beat the best quote I have.

Here on Long Island there are about 10 Mercedes's dealers within 50 miles - all trying to get my business.

ua549

+1
I've dealt with the same dealer for decades so they always give me their best and final quote. Still, I always use your technique to keep my dealer quoting their lowest price. I do on occasion buy from different dealers as I buy cars almost every year on behalf of other family members.

CaptainE

SoCalRick

I wouldn't scoff at that discount, it seems like a decent deal to me. 7% is also the higher tier of the ED discount, since AMG cars get just 5% off. Also, most people will burn through their ED discount "savings" (and more) through the associated travel expenses that go along with it. Then there is the looong wait time for the car to arrive stateside after you have already paid for it (and had a taste of driving it on the roads it was made for). The ED discount will most likely not leave you with extra money in your pocket at the end of the day. However, you obviously do get value in other ways by traveling to Europe and experiencing the ED process. To me you pay about the same amount of money for the car whether you buy it stateside with a modest (similar to ED) discount, or do the ED process and incur the typical travel expenses. You simply have to weigh the "plusses" of the ED experience, against the "minuses" of all the negative aspects (e.g., non-instant gratification, paying for the car while not having possession, pre-ED logistics, travel fatigue and inconveniences, wait time for re-delivery (while you don't have your new car), etc.
YMMV
-SCR

JTK44

In my experience the only reason to take ED is to save the money on renting a car while you are in Europe and to experience Europe in your new MB and the tour of the MB factory - which is open to the public and I found very, very enjoyable. Monetarily there is little to no savings in ED vs. delivery in the US.

ua549

It isn't cost effective to travel to the EU simply to collect a car and return to the US. A large savings is realized by not having to rent a similar car for a vacation. On my last trip car rental was about €50 per day (unlimited km) plus tax. That adds up quickly for a lengthy vacation. I don't do ED anymore because my trips are much shorter.

rbrylaw

If I were to ever do the European Delivery, cost savings would not be why. I would do it for the experience, which I imagine is pretty cool, with the understanding that any cost savings I realized off the car would quickly be eaten up by the vacation expenses I'd rack up.

CaptainE

rbrylaw

I'm sure it will be a wonderful journey. For me, getting my new car, driving it, then having to say so long to it for it's journey back home would be hard. But I know many do it this way and I'm sure the factory tour and getting delivery by MB itself would be an awesome experience for sure.

ua549

I did that once many years ago. Back then MB provided bigger discounts, luxury hotel stays and other free adventures.

mcsmcs1

Remember to add the $995 savings on the delivery charge to the ED savings side too. Additionally, some buyers are able to get the dealer to give 1-3% from their margin (commission) on the car adding to the 7%. You can get to about 11% this way. On the other hand, you should be asking your other dealers to beat the 7% on your normal US dealer order (not ED). You might very well work your way up to 9%, plus you should check if you qualify for the fleet employee program ( many companies on the list) or other affiliation fleet program such as ADA, AMA, USAA etc. Right now the fleet incentive is $1500 on an E class, so that plus 9% gets you 11% as well.

CaptainE

bobgads

Did you ever find the deal you were looking for in AZ, or did you look out of state? If so which dealers offered the best discount?

JTK44

On my 2019 E450, to be delivered in December, I received just over 10% off of MSRP. As I previously posted, the main advantage of ED is the savings on a rental car, the experience of driving through Europe in a Mercedes instead of a rental car and a tour of the factory, which I have done and it is a wonderful experience.

The downside is not having your Mercedes to drive in the US when you return, waiting for your Mercedes to arrive several weeks later by boat!

lkfoster

Wound up ordering an AMG E53 Coupe in California but with all of the paperwork being done in AZ to keep it as an AZ car. The central CA coast dealer was willing to negotiate more.

bobgads

lensjack

Could you elaborate a bit on why you buy instead of lease? I have always preferred to buy, but in ordering my first MB, leasing appears to make more economic sense. I could still choose either path once the car arrives. But with so much of MB's business predicated on leasing, the relatively low retained value appears to make ownership costs over three years significantly higher than lease costs. Am I missing something in the numbers? Or is your decision more personal and not numbers-driven?

rbrylaw

My decision is more personal. Yes, I get a great discount, but I also don't finance my cars. I buy them outright. And like my home, which I own, I don't want to rent my car or be told how many miles a year I can drive it. I'm sure I've been on the losing end of things, but having both purchased and leased, I've resented EVERY lease I've had. It's really hard to get out of a leased car earlier than say, 6 months before the lease is up. I can trade in a car I bought a month later. Yes, it may not make the most financial sense, but it provides the best mental sense and for us that's a good thing.

lensjack

Thanks for explaining. Makes sense. I'm a little uneasy with the idea of leasing for many of the same reasons. We haven't owed money on anything for a very long time. Peace of mind matters. A lot. I'll probably run the numbers again in January when the car is due to arrive, and decide if the financial/psychological gap between leasing and buying tilts me one way or the other.

rbrylaw

The clear advantage to leasing a car is one can typically drive a nicer car than they could afford to purchase. You're paying for the portion of the car you drive while you drive it. And yes, you can still buy the car after the lease, but that only makes sense IF the residual is lower than the car is actually worth at that time. Also, if you lease, do NOT put much if any money down. Should you total the car, you'd lose the investment you put into it up front. And make sure you get gap insurance (many states require it) to help with a total loss situation (i.e., the insurer pays off the remaining balance owed on the car at total loss). But any money you paid would be gone.

JTK44

Just my $.02:

From a business perspective (and I view a $70,000 purchase as a business purchase) you want to own an appreciating asset (a home, building for example) and rent a depreciating asset - a car for example.

I have been leasing since 1986 and have never regretted it: I have leased from Mercedes, BMW, Audi, Porsche, Ford, Chrysler and Mitsubishi.

RBRYLAW seems to be quite unique on this Board: He and his partner several months ago purchased both a 2018 E300 and E400 and he is now, within 6 months of buying those two cars, trading in the E300 for a new 2019 E450.

Most people tend to keep their cars longer than six months. If you intend to change cars every year or two, leasing is not the way to go. Then you are better off owning.

Also, if you intend to keep your car for more than 5 years, then owning is better than leasing.


But if you intend to keep your car 4 years or less, then leasing is substantially cheaper than owning. (you should never lease for more than the manufacturer’s warranty)


Too many people think leasing is like buying a car on time. Nothing could be further from the truth.


I do agree with RBRYLAW that to finance a luxury item (and a Mercedes is a luxury item) is foolish and should not be done. If you cannot afford to buy a Mercedes you should not kid yourself by financing it.

However, if like me, you enjoy a new car every 3 years, do not want to worry about maintenance then leasing is far, far cheaper than owning.


The basic reason that leasing is cheaper than owning is that the residuals, which determine the depreciation component of the lease, after three years, are 99% of the time much higher than the trade in value of the car: This is called being “Upside down”.

In other words if the MSRP of the car is $70,000 and the residual after three years is 59% (which is the residual on my 2019E450 with 10,000 miles, 36 months), then your depreciation component is $28,700 (41% of $70,000) so at the end of the lease the residual is $41,300.

Now everyone knows that a three year old Mercedes is not worth $41,300.

Check out this board and you will see people considering a one year old CPO Mercedes for $46,000: so we all know that a three year old will not be worth $41,300.

Even if we assume that the three year old Mercedes is worth 50%, (IMO it will be worth less), that means the car you own when you trade it in will be worth $35,000.

The difference between $35,000 and the residual value $41,300, $6,300 is the cost of ownership vs. leasing.

There are several tax advantages to leasing as well.

In NY State, the tax is on the full purchase price of the vehicle.



When you lease, the tax is on total of monthly payments. Each state is of course different.

So using $70,000 at 8.625% (tax rate where I live) the sales tax on $70,000 is $6,038.

The 2019 E450 I am leasing has a MSRP of just over $70,000 and the monthly payments are $899, which includes the NY State sales tax. If I back out the NY State sales tax, approximately $100 per month, the monthly payments are about $800 a month. The tax component of the lease payment is $100 a month, 36 months, $3,600.

The savings on sales tax is $2,400.

When added together, the depreciation and sales tax, the total is over $8,000.


There is an additional cost of leasing and that is the bank fee, $895.

So, after subtracting the bank fee, owning vs. leasing for three years, the cost of ownership vs. leasing is over $7,000.

Now if I am wrong and the value of the Mercedes is actually more than the residual (the opposite of being “upside down”), i.e., the residual is $41,300 but the car is worth $45,000, then you just buy the car at the end of the lease and either keep the car or sell it for a profit.

Either way it is a “win – win”.



Finally, there is an interest rate component to the lease. Presently the MF on my 2019 E450 is .00194 which is 4.65% (multiply MF by 2400 to get interest rate).


Now some may say that is very high. To me it is not.



Presently I am earning substantially more on my investments than 4.65%. So, if I take $70,000 I lose the return on that $70,000 (usually called either “cost of money” or “opportunity costs”) which will be far greater than the 4.65% interest in the lease.



The numbers do not lie. For any period less than 4 years it is much, much cheaper to lease than to own.

JTK44

RBRYLAW is 100% correct:

1) Never put anything down on the lease - not even the sales tax. Everything should be rolled into the lease payment. In the event the car is lost or totaled everything you put down is gone - PUFF gone!
2) Never ever lease for longer than the manufacturer's warranty: Think of it this way: you are renting a house for 5 years and required to maintain it. In the fourth year you are required to put a new roof on the house. At the end of the 5th year the landlord takes back the house with a brand new roof that you have paid for! Now think about leasing for 5 years and in the 5th year after the warranty has run out, you must replace the transmission. At the end of the lease you return the car and the manufacturer has a brand new transmission that you have paid for.
3) Always have GAP insurance - which I now believe is built into every Mercedes lease.
4) Always lease from the manufacturer's financial arm - who will want you back as a customer and will not "nickel and dime" you at the end of the lease.
5) Never buy an extended warranty: You will be returning the car before the manufacturer's warranty runs out.
6) Never buy other protections, paint sealant, fabric sealent, etc. You are renting not owning the car!