rraisley

Everything you say is true. And from MB's standpoint, probably makes sense.

In my case, where, for my first, last, one and only Mercedes, I have spec'd and ordered it exactly like I want it, I either: 1) Lease, just in case I don't like it, it has too many problems, or in my case more probably I am unable to drive or not around at all 3-4 years from now, knowing I'll take a bath by buying it at the end of the lease, or 2) Buy the car instead, and hope it doesn't have too many problems and I still like it and am glad I have it. Certain high added cost, or possible/potential loss. I cannot keep leasing, at my age, like MB wants me to do.

Oh, there is choice 3): Lease with another company who charges reasonable interest rates for leasing, and may even have reasonable residuals allowing purchase without losing money, or if not, can be bargained with to buy for a reasonable amount, like I've done with other non-MB cars. That sounds like the best choice.

MB Finance is playing a game I don't think I want to play.

JTK44

Humbly suggest your are wrong:

I doubt any any third party leasing company will match Mercedes Financial: If they do then expect to be nickled and dimed to death at lease termination. Strongly urge not to go to third party leasing company.

I think you have missed a very important point: if at the end of the lease you decide to buy you are no worse off than buying up front: the added cost will only be the acquisition cost: All other costs are the same as if you have bought. Think of the MF as the cost of money, use of money, which as an engineer doing spread sheets I am sure you are aware of. If the MF equals 4%, then the use of money is certainly cheap. If you put the money you save by leasing instead of buying and put that money in a money market account you will receive close to 2%, so if you pay 4% MF, the difference is only 2%. If you have the money invested returning 5%, then you are ahead 1%.

Most people who lease do not intend to buy at the end of the lease. By leasing you only pay depreciation to the extent of the residual. If you buy, then the car at the end of three years is worth less than the residual - that is where leasing for three years is cheaper than owning.

But if you buy at the residual at the end of the lease your are the same as if you had bought plus the acquisition fee.

Perhaps financing would be at less than the MF but then you lose the flexibility of walking away at the end of the lease. At our age, I am your age, that ability to walk away, is worth something - to me certainly the acquisition fee.

So I think by leasing you are in a win/win situation: Walk away and your are cheaper than owning: buy at the end of the lease at residual no different than buying today + the acquisition fee.

I sincerely hope this helps and again from personal experience I urge you not to go to a third party leasing company.

Lanzz

This !!! The game MB Financial is playing is far superior to the game ANY third party leasing firm will play. Leasing sounds smart, given your situation - you are keeping your cash outlay low and giving yourself options and flexibility in a few years, which is when you really may need it. Your only real exposure is making some lease payments on a car you can't drive any longer or the cost of the acquisition fee/cost if you buy the car at the end of the lease - and both of those scenarios are not a certainty at this point.

steve sl550

rraisley,

Are you sure about your MFs or maybe I'm messed up.

I'm being told for a 2020 E350 sedan one pay MF I will pay .00073 which ='s 1.752% (.00073X2400=1.752%) and I think is fair as it gives the dealer I think a .00020 mark up of .48%.....I really got a big cap cost reduction so figure letting them make something here OK
If I go for a 2020 E450 sedan one pay MF is .00176 which ='s 4.224% (.00176X2400=4.224%)
MB tells me like others have said in posts above that bigger engine or AMG vs the E350 carries a bigger MF and less % residual so I guess these #s make sense.

I think something is wrong with your MFs you list in your post for the sedan vs the coupe assuming they are both E350s even if you aren't doing a one pay
Your Coupe @ .00053 X 2400 = 1.272%....Is probably correct for a "one pay" and looks like maybe without any dealer load but your Sedan MF looks way off comparatively @ 4.224% (if anything the sedan S/B a lower MF than the coupe or at lease the same ?)

Did you check Edmunds?

BTW: Based on my #'s above I decided to go with the E350 vs the E450...I presently have a E300 and am happy with it...thought I'd like the E450 if only difference the initial MSRP difference but, when I ran the #'s for MF and Residual big difference so I went with the 2020 E350

Maybe someone else can look this over and chime in.

rraisley

That's possible, of course. And of course if total cost (including the nickels and dimes) were not lower, I wouldn't go to them.
I don't agree that the only added cost is the acquisition fee. A high money factor results in a higher interest rate (0.00225 MF = 5.4%); I can get an auto loan for 3%. Then, with an auto loan, you average one-half (roughly) the interest rate over the life of the loan, as the amount goes from loan amount to zero, while with the lease on the wagon, it's calculated going from 92% MSRP to 59% MSRP, averaging about 80% of the rate. Basically, 1.5% average interest for the loan, 4.3% for the lease. Yes, it's true that investing unused money will help defray interest or lease expenses, but that's always the case. If I can invest at 5%, I'd finance (buy) the car with the smallest amount down over the longest time, because theoretically I'm making money. And paying 3 times the interest for a lease versus a loan, due to the interest rate paid, means I pay more and end up with less.
I don't think so, due primarily to the interest rate charged. And the way it's calculated for a lease.
That's very true, of course, the ability to walk away part. But the cost is much more than the acquisition fee. My figures for Sedan vs Coupe show what huge differences the MF and RV for equally priced cars can be. Not to bad if you lease and don't buy. VERY bad if you buy at the end of the lease.
All of the general leasing web sites (not car specific) state you should pay pretty much the going interest rate. That's all I'm trying to do. But why so much against using a third party leasing company? You know all the costs upfront, and can compare one lease with another. It still may come out to a decision based on whether I think I'll end up buying in the end, but I'd feel better about it if not being ripped off with the interest.

whoover

Just to show what we're talking about, when I got my E63S in January, the MF quoted was .00345, or 8.28%! I can't believe that anyone would bite at that rate. (Residual was 48%.) This was versus 3.25% financing.

rraisley

Them's fightin' words! Right. That's true, and IMHO it's really WRONG. It's bad enough that MB raised the price of the E450 over $1,000 more than the E350 was raise (we're now paying $5,000 more for the V6). But they also want to charge us more INTEREST when we lease the 450. But NOT more if we BUY the 450. It's all so convoluted.
Yes. I'm using the Edmunds MB Leasing Forums at https://forums.edmunds.com/discussio.../mercedes-benz which appear to be pretty official. Both MFs above were for E450s, Sedan and Coupe.
A good decision. I'd probably have done the same, when I initially compared E350 versus E450 Sedan, what with the MSRP of the 450 being $5,000 higher, and now the lease cost, due to MF and RV, making total cost over $6,000 more than that! Unfortunately, I had previously decided to go to an E450 Wagon (they don't import the Wagon in 4 cylinder). That means, if I lease and buy the wagon, I will be paying over $19,000 more for the E450 Wagon over an E350 RWD sedan! ($2,500 more for 4MATIC + $5,000 more for 450 vs 350 + $4,550 more for the wagon + over $7,000 extra lease interest). Yes, it's a ridiculous amount more, but the added lease interest, due to the MF, just adds insult to injury.

Actually getting myself pretty pissed about the whole thing, and may end up just going back to BMW, where they charge the same MF for all models, as near as I can tell, and it's currently .00145. I got a better discount on the E, and like the interior better, but wasn't expecting all these extra costs.

JTK44

Are you getting the MF from the Edmunds forum or from a MB dealer?

As you know both MF and residuals are reset every 60 days.

rraisley

From Edmunds, at this point. But everything there has jived 100% with what people have posted they are getting here.
I'll contact the dealer closer to time of pickup, assuming I go ahead. Just trying to do my homework ahead of time.

JTK44

I think you may wasted a great deal of your time:

What you have posted seems contrary to what many of us have found from years of leasing: I have been leasing from BMW, Audi, Mercedes, Acura and Porsche to name a few.

In all my years, within models I have never seen the variance in MF you are reporting, for example between an E300 and an E450.

A wagon or AMG yes, but not between an E300 and E450: small variance but nothing like you posted.

As I previously posted both MF and residuals are reset every 60 days. Further from a forum you have no idea who is making the statements, how up to date the information is, or what their personal information is, all of which can be reflected in erroneous MF and residuals.

Post what your dealer gives you as to MF and residuals: that is all that counts.

rraisley

Probably so. I'll try to make this my last post.
I won't disagree there. MB is the only one I've seen this kind of variance in lease rates with.
steve sl550 above stated he was given MF of 0.00073 for an E350 Sedan and 0.00146 for an E450 Sedan. That was for one-pay, but it shows a great difference between the two, with E450 having twice the interest rate as E350. Edmunds is quoting MF/RV of 0.00133/50% for E350 Sedan and 0.00196/51% for E450. Here, interest on 450 is almost 50% higher than 35, with an almost identical RV.
I think if you read through those forums, you'll find them accurate. They even had to wait until about a week into this month, as 2020 MFs weren't available until then. In fact I was /directed/ to those forums from here.

If no one believes the information I've quoted, that's fine, but I do advise you to check them out before completely ignoring them. I've done a lot of research, and feel confident about what I've posted.

Anyhow, since I've discovered the huge variation in lease factors that MB has put in place, my discussion has turned pretty much into a b*tch session, and that's silly. I'll never lease with MB at such a high rate, but that's /my/ decision, and no one else's. I'll just have to figure another way to acquire the car that I consider reasonable, or go another way.

I'll keep my complaining to myself from now on, and let everyone go their merry way. Thanks again!

JTK44

My last post also:

Will wait for you to find out from the dealer:

FYI, The RV on my 2019 E450 for 36 months, 10,000 miles per year is 59%. Edmunds is saying 50% and 51%.

That is just not accurate.

BTW, your deal with the dealer was, if my memory is correct, a 12% discount from MSRP.

I still believe that your options are:

• Lease
• Buy out right for cash
• Buy and finance

The third option to finance is not my genetic makeup: I do not buy luxury items on time.

That leaves either leasing (renting) or buy outright for cash.

I prefer a new car every three years, a car that is under warranty, has the latest safety features and I want the flexibility to change as my needs change.

I have never considered owning a MB, or any other luxury car out of warranty: To own vs. leasing you must own minimum of 6 years before it is cheaper to own vs. leasing.

You may be upset with the variance in MF between an E300 and E450 wagon, but in reality there is nothing you can do about it.

My own perspective is that I would be more upset with the additional cost (higher MSRP) of the E450 wagon vs. the E450 sedan - but clearly to those who want the wagon, they are willing to pay extra for it.

I have dealt with third party leasing companies: they must get the car from a dealer, mark it up and then structure a lease for you. My experience has been that with the discount of 12% off of MSRP they will not be able to match a cap cost that low and their monthly payments with no money down will be substantially higher.

The people I know who use third party leasing companies use them not to save money, but for the convenience of them doing all the work for them. They do not want the hassle of going to dealers, picking out options, etc. All they want is a new car delivered to them at a certain monthly payment.

JTK44

Dear rraisley:

What did you find out from your dealer as to MF and RV for the 2020 E350, E450 and E450 wagon?

I checked my lease and I confirm that the RV with 10,000 miles per year, 36 months is 59% and the MF was .00194, 3.88%. This was for a 2019 E450 in December 2018.

JTK44

Just contacted my MB dealer:

Here are the rates for a 2020 E350 4matic vs. 2020 E450 4matic:

E350 4 matic MF.00088 RV 57%

E450 4 matic MF .00196 RV 59%

As I previously posted the RV that you found in Edmunds (50% and 51%) are incorrect.

Also the MF for the E350 4 matic (.00133) was also incorrect.

The MF for the E450 4matic was correct.

That means 3 out of 4 were incorrect! That is why I never use Edmunds for either the MF or RV: I always go to the dealer!

The higher MF for the E450 is somewhat offset by the higher residual.

Using $60,000 as the MSRP:

The monthly lease rate for the E350 will be $799 per month.

The monthly lease rate for the E450 with be $870, $70 a month more, $2520 extra over the term of the lease.

Clearly if you intend to buy at lease end, the E350 4matic is a much better value than the E450: the buy back will be $1,200 lower plus savings of $2520 in lease payments.

Remember that the EPA figures for the E350 are much higher than the EPA figures for the E450. Plus MB sells a fairly high number of S Class and GLE and GL all with poorer EPA figures.

So to achieve a corporate CAFE numbers, MB must sell more C class and E350. So it is not surprising that the cost of the E450 vs. the E350 is higher: the idea is to sell more E350 vs. E450.