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As an experienced car lease investor, I have devised a strategy to maximize profits by selling cars before the end of their lease term. The key to success is timing and finding the right deal, which involves negotiating the MSRP down as much as possible. By selecting the lowest mileage allowance, wear and tear and exceeding mileage limits are of no concern. I always sell the car before it requires high-cost maintenance or new tires, even if the depreciation is high, such as with the EQS. My approach is transactional first and preference second, as I prioritize the best deal available at the time for the car that meets my criteria. This involves skill, research, forming strong relationships with dealership contacts, great timing, and a bit of luck. Over a span of ten years, I have put into effect leasing strategies that have allowed me to pay either the same amount or less than what most people pay in five years for a financed vehicle with an MSRP of $55,000 as an example.
Leasing can be a complex process, and some unscrupulous dealers may use various tactics to extract as much money as possible from you, all while assuring you they are striving to secure the best possible deal. Their goal is to maximize profits, while your aim is to minimize your expenses. Unfortunately, leasing and lease contracts can offer more opportunities for creative maneuvering, which can leave you vulnerable to these tactics. However, knowing your best deal and target selling price beforehand, and agreeing to those amounts before ever setting foot in the dealership, can put you in a better position to negotiate and avoid falling prey to these tactics. In essence, as long as the final selling price and payment match up with your target pricing, it ultimately won't matter how they creatively maneuver their numbers as long as you know you are paying exactly what you have agreed to.
I was able to negotiate the price of my 2023 EQS 450 4MATIC from an MSRP of $112,295 down to $77836 after incentives. This resulted in a savings of $34,459, a discount of over 20% with $12,000 in incentives. Overall, I received a reduction of 30.7% off the MSRP. The residual was slightly over 60%, setting the buyout at $67,900. The final selling price was $77,836. I opted for a one-pay lease, which is my preference unless the interest charge equals close to 0%. Since I completed a one-pay for 24 months, I negotiated a price of $17,984, which, spread out over 24 months, equals $747 a month. In short, I have positioned myself to have the best chance of coming out ahead closer to my lease end. For example, if I sold the car today and it had lost 20% of its value, I'd still generate positive equity of approximately $3952. That's $112,295 - 20% depreciation = $89836 - $67,900 residual = $21,936 - $17,984 one-pay = $3952 in positive equity.
I have no plans of selling my car anytime soon as I intend to keep it for the most part of the lease term. To give you some context, I typically sell my cars after two years of a three-year lease. Mercedes Benz has imposed stricter restrictions on third-party buyouts and lease-end terms, but I have prepared myself for the time when I'll have to part ways with the car. Although there's more information involved, the bottom line is that leasing is the only way that suits my needs for transportation. I tend to lose interest in cars soon, and with leasing, I never have to worry about warranty-related issues or the costs of upkeep. Essentially, it will be someone else's problem before I ever have to worry about associated costs.
Listen to this guy. He and I disagree about the risks involved in a one pay lease, but I basically do the same thing I just do it with traditional monthly leases.
I fear that the depreciation on the EQS is so extreme that it won't be quite as rosy as he hopes with this specific car, but it will be WAY better than having bought it.
Listen to this guy. He and I disagree about the risks involved in a one pay lease, but I basically do the same thing I just do it with traditional monthly leases.
I fear that the depreciation on the EQS is so extreme that it won't be quite as rosy as he hopes with this specific car, but it will be WAY better than having bought it.
As someone who takes pride in being a thoughtful and strategic planner, I'm always careful to consider all the factors when making important decisions. When it came to deciding on the perfect vehicle, I did my research and analyzed every detail of the EQS, including the high depreciation rate. But here's the thing: I never assume that anything is a sure thing, and that's why I always prepare for the best and worst-case scenarios. With a one-pay lease and a calculated approach, I was able to capitalize on the market's treatment of the EQS and score a fantastic deal with a dealer who recognized my strategy and persistence. And even in the unlikely event that the depreciation rate worsens, I can simply hand over the keys and start fresh, knowing that I enjoyed a luxurious ride for two years. By minimizing the risk and staying focused on my goals, I am confident in my decision to pursue the EQS. In the best-case scenario, I make some money and start over. Worst case scenario, I turn it in after two years, walk away, and start over. Although I am fond of this car, I cannot in good conscience recommend its purchase as it will only remain a viable option for a limited time before becoming someone else's burden.
Why would I want to own something that has massive and unpredictable depreciation? I'd much rather rent that and have a set cost that I can depend on.
In fact, IMO purchasing one of these for six figures is insane. A boat would be a smarter buy.
Do you own a boat or are you simply speculating? Value is also relative to how much one gets enjoyment/grief out of it; someone making a couple of hundred grands may not see value in dropping a 100K on this car, but someone making a 1 mil has a different lens.
Despite the market depreciation rate, YOUR vehicle's depreciation will correlate based on how well your negotiate skills are on your lease or purchase. Leasing does not always put you ahead of the depreciation curve compared to a purchase, Likewise, a crappy lease deal or purchase will not shield you from market depreciations curve either.
2022 Taycan GTS, 2023 EQS580 SUV, 2023 EQS580 sedan
1. Keep the car for 10 years, say you paid 140k with tax out the door. so 140k for 10 years.
2. lease a car, get lucky every time great deal without down pay. lease a 140k car for 1500 with tax. so every 36 mo you lease another new 140k car good deal no down. 10 years total you paid 180k.
so which one is better?
people who doesn't change the car often, option 1 is better. people who drive for 3 mo wants to change another car, 2 is better.
most the time the car at 140k and can get a great deal, those type of car you won't make money even close to end of lease. 2021, 2022 are different so don't use it as example lol.
1. Keep the car for 10 years, say you paid 140k with tax out the door. so 140k for 10 years.
2. lease a car, get lucky every time great deal without down pay. lease a 140k car for 1500 with tax. so every 36 mo you lease another new 140k car good deal no down. 10 years total you paid 180k.
so which one is better?
people who doesn't change the car often, option 1 is better. people who drive for 3 mo wants to change another car, 2 is better.
most the time the car at 140k and can get a great deal, those type of car you won't make money even close to end of lease. 2021, 2022 are different so don't use it as example lol.
Even for the person who wants to keep their car for 10 yrs leasing is better.
At the end of the lease if the residual is higher than the market value you can purchase the vehicle at the market value and save money that you couldn’t have saved if you had bought the vehicle instead of leasing.
I was able to negotiate the price of my 2023 EQS 450 4MATIC from an MSRP of $112,295 down to $77836 after incentives. This resulted in a savings of $34,459, a discount of over 20% with $12,000 in incentives. Overall, I received a reduction of 30.7% off the MSRP. The residual was slightly over 60%, setting the buyout at $67,900. The final selling price was $77,836. I opted for a one-pay lease, which is my preference unless the interest charge equals close to 0%. Since I completed a one-pay for 24 months, I negotiated a price of $17,984, which, spread out over 24 months, equals $747 a month. In short, I have positioned myself to have the best chance of coming out ahead closer to my lease end. For example, if I sold the car today and it had lost 20% of its value, I'd still generate positive equity of approximately $3952. That's $112,295 - 20% depreciation = $89836 - $67,900 residual = $21,936 - $17,984 one-pay = $3952 in positive equity.
Fellow one-pay leaser here on my 2022 EQS 450+. Very similar deal to yours. I'm extremely curious on your post, is that 20% depreciation figure accurate? Our residuals are both well above the market value of the car. CarMax appraised my 3-month, 3K old example last week for $49K when the payoff quote is $74K. Unless COVID v2.0 comes around and inflates the used market again, I dont see that $49K going up. Another way to put it, 20% depreciation makes sense on paper, but in reality what dealer is going to cut you the corresponding check for it?
1. Keep the car for 10 years, say you paid 140k with tax out the door. so 140k for 10 years.
2. lease a car, get lucky every time great deal without down pay. lease a 140k car for 1500 with tax. so every 36 mo you lease another new 140k car good deal no down. 10 years total you paid 180k.
so which one is better?
people who doesn't change the car often, option 1 is better. people who drive for 3 mo wants to change another car, 2 is better.
most the time the car at 140k and can get a great deal, those type of car you won't make money even close to end of lease. 2021, 2022 are different so don't use it as example lol.
Just imagine how outdated the EQS is going to be in 5 years, let alone 10 years. I don't want to drive any car for 10 years, or even 5 years but this car is basically a piece of technology more than it is a car. In your lease example you may have paid more, but you have driven 3 different cars in that time and have been enjoying the new features and technology all that time.
My goal is never to make money on the lease, if I do great, if not eh. My goal is to be able to trade out of it whole when I am ready. Sometimes you make money, sometimes you don't, but you really cant LOSE money because if you can't get traded out you just turn it in. I just replaced our 2020 Pacifica with a 2023 Pacifica, made $4,500 on the trade out of the lease on the 2020.
Fellow one-pay leaser here on my 2022 EQS 450+. Very similar deal to yours. I'm extremely curious on your post, is that 20% depreciation figure accurate? Our residuals are both well above the market value of the car. CarMax appraised my 3-month, 3K old example last week for $49K when the payoff quote is $74K. Unless COVID v2.0 comes around and inflates the used market again, I dont see that $49K going up. Another way to put it, 20% depreciation makes sense on paper, but in reality what dealer is going to cut you the corresponding check for it?
Thats the issue, 20% depreciation is not realistic on this car. More like 60-70% depreciation after 2 years. But, with the lease if the depreciation is steeper than you think you just turn it in. In order to see only 20% depreciation you need to drive something like a GLS that holds its value way better.
2022 Taycan GTS, 2023 EQS580 SUV, 2023 EQS580 sedan
TBH for about 10-15 cars I leased, none of them has residual is higher than the market value.
Originally Posted by Tjdehya
Even for the person who wants to keep their car for 10 yrs leasing is better.
At the end of the lease if the residual is higher than the market value you can purchase the vehicle at the market value and save money that you couldn’t have saved if you had bought the vehicle instead of leasing.
Fellow one-pay leaser here on my 2022 EQS 450+. Very similar deal to yours. I'm extremely curious on your post, is that 20% depreciation figure accurate? Our residuals are both well above the market value of the car. CarMax appraised my 3-month, 3K old example last week for $49K when the payoff quote is $74K. Unless COVID v2.0 comes around and inflates the used market again, I dont see that $49K going up. Another way to put it, 20% depreciation makes sense on paper, but in reality what dealer is going to cut you the corresponding check for it?
As someone who takes pride in being an educator and advocate, I always strive to provide a clear and concise answer to any question. However, my brain doesn't let me do so, and I end up providing more context and explanations to improve the chances of relevance and understanding. Although I play it out in my head and think that my answers make sense, a little more clarification might be needed in this instance. The scenario I had in mind was a brilliant fusion of hypothetical and factual details crafted purely for entertainment purposes. It does not depict a heavily researched or real-life event but is not too far-fetched to be disconnected from reality. Hence the hypothetical, for example, "If I sold the car today and it had lost 20% of its value," and the actual and factual statement, "I would still generate positive equity of approximately $3952. That's $112,295 - 20% depreciation = $89,836 - $67,900 residual = $21,936 - $17,984 one-pay = $3952 in positive equity." Depreciation refers to the decline in value of an asset over time. In the case of a car, depreciation can be calculated as the difference between its MSRP or purchase price and resale value. A new car loses as much as 30% of its value in the first year, with the rate slowing down to 5-8% in the second and third years. By the fourth year, the depreciation rate spikes to 15% due to the expiration of warranties and increased mileage. Also, government incentives play a role in the steep depreciation of electric and plug-in hybrid vehicles as their resale value is based on their lower effective post-incentive sticker price. Since the technology of EVs changes at a rapid pace, outdated technology also contributes to their dramatic depreciation, as well as range anxiety and lack of public charging infrastructure. Luxury vehicles depreciate at a higher rate because they are often leased, leading to a surplus of three-year-old off-lease versions of these vehicles, lowering the demand for the older models. As I’ve only had my EQS since 10/21/23, I’ve not made too many attempts to appraise it for resale. I mean, who has time to process anything else? The tech and feature set alone keep my mind in a potential state of asking, “What else can this car do?” This car can be a nemesis if I let it. As an analytical person, I want to know everything this car can do and why. Sometimes, I would love to be satiated with merely knowing a function exists, but NO, I have to know who, what, when, where, why, and how! I hate being me sometimes. So, with that being said, I’ll explain my process. “What was I saying again?”
Due to my busy schedule, I didn’t have a chance to conduct a thorough market analysis. However, I have noticed that the availability of EQS models in the used car market is relatively low compared to other brands. This can create a challenge for third-party buyers such as Carvana, CarMax, and Vroom, who heavily rely on these vehicles to assess their value accurately. While these appraisal methods are convenient and fast, the fact that the 2023 EQS is a new model means that these buyers may not be able to evaluate its worth accurately and may have to resort to alternative methods to make an offer. To generalize the market, you need to research how much similar products are selling for. However, the challenge lies in the fact that with fewer examples, regional disparities, and fluctuations in mileage range, it becomes a bit more difficult to determine what your vehicle would fetch if sold accurately. While the 20% depreciation that I mentioned is simply an example and not even a statistically validated one, it is more for the sake of my calculations. I did not want to have to base a figure on extensive research, so I picked a number that would make some sense. My example is based on the fact that I am describing my scenario less than two weeks after driving it home. Not to mention, none of the 3rd party buyers can give you a quick appraisal without having more statistical data. They will likely need the Window Sticker, title, and permanent registration in addition to the usual mileage and condition of the vehicle. Knowing that the EQS depreciation is relatively high with many factors set against it from the get-go, like the fact that luxury cars and EVs have higher depreciation. Merely driving off the lot, your car’s depreciation can drop around 10%, 20-30% after one year, on up to most cars' average of 50% depreciation at five years. Remember that these figures are based on the average number of vehicles and are not specific to EVs and luxury cars. For example, the average 5-year depreciation of an S-Class is around 69.9%. This data range sample is taken from 2019-2020. Also, that same S-Class will depreciate higher in Chicago or LA, for example. There are many factors, and with the EQS, those data points and examples become fewer and far between. That being said, Edmunds, KBB, and taking your car to a physical appraiser are ways to get those numbers to a more accurate figure, the latter being a definitive way to achieve some answers.
Regarding your question about the accuracy of a 20% depreciation estimate, I must say, it's merely a rough estimate. However, the more crucial aspect of your query - and the one that truly matters - is the time when you decide to sell your car. Therefore, to align with this scenario, which is an excellent point, the only answer that counts is the one that concerns the actual appraisal value when you sell your EQS. It's one thing to consider the market value of your car, let's say 20% in my example, which, as you said, "makes sense on paper," but it's a completely different scenario, as you also pointed out, "to find a buyer who will offer an appraisal and cut a check for that $89k." While market value and depreciation are factors that influence an appraisal, they will not ultimately dictate what a dealer or buyer will offer for your EQS. In areas where the depreciation rates of EQS are higher or where the market may be more saturated with inventory, it is probable that the appraisal value will be lower. Some examples of such areas include Chicago and LA. It’s ironic - fascinating, really - to think that an appraiser who stands to make a hefty profit off their evaluation of your car with the intention of buying it might not quite align with the market value that you, as the owner, have researched. How peculiar!
Just when you thought I couldn’t possibly be any more verbose, here are some takeaways and analogies - as if I haven’t bored you to death yet! In essence, the key points of my diatribe can be distilled as follows:
The value of a car is not solely based on its price tag, just as a person's self-worth is not determined by their net worth. Ultimately, a car's value is determined by the price that buyers are willing to pay rather than its market value.
The value of a car can be uncertain, just like Schrödinger’s Cat. It may have a high or low value until someone decides to buy it or not. The uncertainty of the car's value persists until a transaction takes place, similar to the cat's state of uncertainty until it is observed.
Similarly, the value of a car may exist in a state of both high and low, until a buyer observes and decides to pay the asking price or not. The value is uncertain until it is realized through a transaction. the fact that the advertised value of a car may become irrelevant in the absence of a buyer willing to pay the asking price.
Lesson learned: market demand trumps perceived value every time.
For example, if I sold the car today and it had lost 20% of its value, I'd still generate positive equity of approximately $3952. That's $112,295 - 20% depreciation = $89836 - $67,900 residual = $21,936 - $17,984 one-pay = $3952 in positive equity.
Your post :
Originally Posted by SW20S
Thats the issue, 20% depreciation is not realistic on this car. More like 60-70% depreciation after 2 years. But, with the lease if the depreciation is steeper than you think you just turn it in. In order to see only 20% depreciation you need to drive something like a GLS that holds its value way better.
Could you please clarify what you mean by "That's the issue?" Are you referring to the 20% depreciation? Also, which timeline are you suggesting is not realistic? Are you implying that it's unrealistic to sell it today with a 20% depreciation or two years later? However, I never made such a claim. Are we discussing the present-day timeline or the two-year timeline that seems to have shifted focus from the 20% range to the random inclusion of 60-70% at two years?
I am annoyed with your repeated attempts to contradict information that I have accurately researched and verified. This is not the first time that this has happened. When you make statements, you only sometimes provide relevant data or context to support them. Instead, you rely solely on your perception that you "know it to be true." This approach insults me, as I put in significant effort to ensure that everything I share is backed up with evidence or experience.
You often make broad assertions and seem unwavering in your conviction without being able to justify your stance when questioned. Rather than offering support for your perspective, you tend to deflect and deviate from the topic instead of addressing counterarguments. A little objectivity and diplomacy go a long way.
Even when you slightly agree with me, you seem disingenuous. Sometimes, your statements are direct, generalized, and blunt and often lack context, evidence, and validation. While I acknowledge that some of your arguments may be valid, your approach needs improvement. This complaint may seem futile, and I usually don't give oxygen to these situations. However, they keep occurring, so I feel obligated to address them. If you insist on challenging me or my credibility, you better come with your facts straight and your ducks in a row because you can guarantee I will! I always have evidence to support my claims, and I don't make assertions I can't prove. I strive to maintain a civil and respectful demeanor even when I disagree with someone. Nevertheless, there are times when even I get pissed off!
Regarding the 20% depreciation level, I have evidence to support my claim. It seems I might have been pretty generous because it looks like it's possible to have even less at 15%. Now, before you go there, having a market value of 15% depreciation is possible; finding a buyer who will pay it is another matter, but that's not the point I'm trying to make. What it ultimately proves is that my case in point has some credence, and it's possible to have a 15% depreciation level.
I think I need to adjust my meds and caffeine intake! I’m a bit cranky tonight!
I have a several family members that work as a new car salesman for Mercedes and BMW in Socal and they told me 9 out 10 customers leased their car. BMW and Mercedes value drop like a brick once you drove it off the lot, plus EV buyer are not certain how long the battery will last them. They want new battery Technoloy when it come out. My brother owns a Tesla Model X, 7 months later Mercedes give him 39K for his trade in. EV Technoloy are getting better every day, By the time my lease is over i can return it for a more advanced battery plus without all the bugs and I don't have to worry about the value of the EV. Win win if you lease.
I have a several family members that work as a new car salesman for Mercedes and BMW in Socal and they told me 9 out 10 customers leased their car. BMW and Mercedes value drop like a brick once you drove it off the lot, plus EV buyer are not certain how long the battery will last them. They want new battery Technoloy when it come out. My brother owns a Tesla Model X, 7 months later Mercedes give him 39K for his trade in. EV Technoloy are getting better every day, By the time my lease is over i can return it for a more advanced battery plus without all the bugs and I don't have to worry about the value of the EV. Win win if you lease.
I think the first EQS deliveries happened in 02/2022 in the US. If 9 out of 10 were a lease, that means in 2 or 3 months the lease returns of the EQS will flood the market?
@capt_slow Did you take it to Car max or did online assessment ? I think it does not provide online trade in for EQS SUV yet.
KBB gives a value for EQS SUV though.
In person appraisal with my sedan.
Originally Posted by J_Boxer
Regarding the 20% depreciation level, I have evidence to support my claim. It seems I might have been pretty generous because it looks like it's possible to have even less at 15%. Now, before you go there, having a market value of 15% depreciation is possible; finding a buyer who will pay it is another matter, but that's not the point I'm trying to make. What it ultimately proves is that my case in point has some credence, and it's possible to have a 15% depreciation level.
The bolded statement (mine) is incredibly accurate, but all goes back to the idea of "you don't realize your profits/losses till you sell". Yes the conditions CAN exist in the car market, but they don't for the EQS. You cant sell until you have a corresponding offer, which in context of the EQS is nonexistent. I encourage you to shop your EQS around for actionable offers and see how it stacks up to your evidence.
I think the first EQS deliveries happened in 02/2022 in the US. If 9 out of 10 were a lease, that means in 2 or 3 months the lease returns of the EQS will flood the market?
Yes, but it will be a tiny flood, given the low number of cars sold
The same happened with the very successful W222 S-Class in which a glut of lease returns impacted resale values and led MBFS to reduce the residual for later model years.
that's good for you. none of my cars makes money end of lease. specially the Bentley Continental GT, for 2 years damn that car worth nothing lol.
But at least you were just able to give it back!
The more expensive the cars get, the harder it is to accomplish this.
Originally Posted by J_Boxer
Could you please clarify what you mean by "That's the issue?" Are you referring to the 20% depreciation? Also, which timeline are you suggesting is not realistic? Are you implying that it's unrealistic to sell it today with a 20% depreciation or two years later? However, I never made such a claim. Are we discussing the present-day timeline or the two-year timeline that seems to have shifted focus from the 20% range to the random inclusion of 60-70% at two years?
I am annoyed with your repeated attempts to contradict information that I have accurately researched and verified. This is not the first time that this has happened. When you make statements, you only sometimes provide relevant data or context to support them. Instead, you rely solely on your perception that you "know it to be true." This approach insults me, as I put in significant effort to ensure that everything I share is backed up with evidence or experience.
You often make broad assertions and seem unwavering in your conviction without being able to justify your stance when questioned. Rather than offering support for your perspective, you tend to deflect and deviate from the topic instead of addressing counterarguments. A little objectivity and diplomacy go a long way.
Even when you slightly agree with me, you seem disingenuous. Sometimes, your statements are direct, generalized, and blunt and often lack context, evidence, and validation. While I acknowledge that some of your arguments may be valid, your approach needs improvement. This complaint may seem futile, and I usually don't give oxygen to these situations. However, they keep occurring, so I feel obligated to address them. If you insist on challenging me or my credibility, you better come with your facts straight and your ducks in a row because you can guarantee I will! I always have evidence to support my claims, and I don't make assertions I can't prove. I strive to maintain a civil and respectful demeanor even when I disagree with someone. Nevertheless, there are times when even I get pissed off!
Did you miss where I told everybody they should listen to you even though we disagree on the security of a one pay lease? In case you missed it, here it is:
Originally Posted by SW20S
Listen to this guy. He and I disagree about the risks involved in a one pay lease, but I basically do the same thing I just do it with traditional monthly leases.
And my response to your follow up:
Originally Posted by SW20S
Couldn’t have said it better myself…
I think you need to check your narcissism here. Nobody is challenging you on anything, certainly not me. How can I be challenging your credibility when I told everybody to listen to you and that I couldn't have said what you said any better myself? People who discuss what you are talking about and offering other points of view are not challenging you or your credibility...its a discussion forum. Your POV and experience is not the only one that exists. I have also been leasing cars for 20+ years and have spent a lot of time doing research and have a lot of experience also. You are not the only person who has done research and has experience in this.
I don't have to bring anything to a discussion with you. I have been nothing but respectful and kind towards you, but you seem to want to attack me for having a viewpoint that only slightly differs from yours. Give it a rest. Read everything you just said to me and apply it to yourself
I think I need to adjust my meds and caffeine intake! I’m a bit cranky tonight!
Yes...yes you do.
Originally Posted by capt_slow
The bolded statement (mine) is incredibly accurate, but all goes back to the idea of "you don't realize your profits/losses till you sell". Yes the conditions CAN exist in the car market, but they don't for the EQS. You cant sell until you have a corresponding offer, which in context of the EQS is nonexistent. I encourage you to shop your EQS around for actionable offers and see how it stacks up to your evidence.
Thats the issue. the depreciation on this car is so steep, its way more than other cars he has dealt with. He is a member at ClubLexus and this is the first really expensive car he has leased I believe. Its much harder to accomplish what he has accomplished in the past on flagship cars. Before I moved up to this class I ALWAYS traded out and made money, but I haven't made money on any of the flagship cars I have traded out of, I have broken even. Right now if I wanted to trade out of my S560 I would be upside down. His previous car was a Lexus ES, well yeah the last Lexus ES I had I made $4k on when I traded it in. I made $4k on my Chrysler Pacifica when I traded it in last month. MUCH harder to do on cars with much steeper depreciation curves.
My goal with this style car is to break even when I trade, so that my only costs have been my monthly payments. Not gonna make money trading in an EQS lease.
As an experienced car lease investor, I have devised a strategy to maximize profits by selling cars before the end of their lease term. The key to success is timing and finding the right deal, which involves negotiating the MSRP down as much as possible. By selecting the lowest mileage allowance, wear and tear and exceeding mileage limits are of no concern. I always sell the car before it requires high-cost maintenance or new tires, even if the depreciation is high, such as with the EQS. My approach is transactional first and preference second, as I prioritize the best deal available at the time for the car that meets my criteria. This involves skill, research, forming strong relationships with dealership contacts, great timing, and a bit of luck. Over a span of ten years, I have put into effect leasing strategies that have allowed me to pay either the same amount or less than what most people pay in five years for a financed vehicle with an MSRP of $55,000 as an example.
Leasing can be a complex process, and some unscrupulous dealers may use various tactics to extract as much money as possible from you, all while assuring you they are striving to secure the best possible deal. Their goal is to maximize profits, while your aim is to minimize your expenses. Unfortunately, leasing and lease contracts can offer more opportunities for creative maneuvering, which can leave you vulnerable to these tactics. However, knowing your best deal and target selling price beforehand, and agreeing to those amounts before ever setting foot in the dealership, can put you in a better position to negotiate and avoid falling prey to these tactics. In essence, as long as the final selling price and payment match up with your target pricing, it ultimately won't matter how they creatively maneuver their numbers as long as you know you are paying exactly what you have agreed to.
I was able to negotiate the price of my 2023 EQS 450 4MATIC from an MSRP of $112,295 down to $77836 after incentives. This resulted in a savings of $34,459, a discount of over 20% with $12,000 in incentives. Overall, I received a reduction of 30.7% off the MSRP. The residual was slightly over 60%, setting the buyout at $67,900. The final selling price was $77,836. I opted for a one-pay lease, which is my preference unless the interest charge equals close to 0%. Since I completed a one-pay for 24 months, I negotiated a price of $17,984, which, spread out over 24 months, equals $747 a month. In short, I have positioned myself to have the best chance of coming out ahead closer to my lease end. For example, if I sold the car today and it had lost 20% of its value, I'd still generate positive equity of approximately $3952. That's $112,295 - 20% depreciation = $89836 - $67,900 residual = $21,936 - $17,984 one-pay = $3952 in positive equity.
I have no plans of selling my car anytime soon as I intend to keep it for the most part of the lease term. To give you some context, I typically sell my cars after two years of a three-year lease. Mercedes Benz has imposed stricter restrictions on third-party buyouts and lease-end terms, but I have prepared myself for the time when I'll have to part ways with the car. Although there's more information involved, the bottom line is that leasing is the only way that suits my needs for transportation. I tend to lose interest in cars soon, and with leasing, I never have to worry about warranty-related issues or the costs of upkeep. Essentially, it will be someone else's problem before I ever have to worry about associated costs.
This is a highly condensed explanation that provides a simplified overview of the topic. Due to the complexity involved, it is not possible to discuss or disclose every parameter in detail. However, it is important to note that there are nuances that should be taken into consideration to gain a comprehensive understanding of the subject matter. Leasing may not be the ideal option for everyone, but it certainly isn't as malevolent as it's sometimes portrayed. Detractors who speak out vehemently against it often do so because they misunderstand the process and the potential benefits it can offer. In fact, many of those who have had negative experiences with leasing may have fallen victim to common misconceptions.
***Just a quick note to clarify my stance on the topic of a one-pay lease. I understand that this can be a controversial topic with many preconceived notions and misunderstandings surrounding it. Therefore, I prefer not to engage in debates or discussions about it, unless someone is genuinely interested in having a constructive conversation. I believe that such discussions should be productive and positive, and I don't want to contribute to negative or misleading conversations. If you have any questions or would like to have a meaningful conversation about a one-pay lease I'm all ears, but if your intention is to engage in a negative debate about the validity of the one-pay lease, I kindly request that you refrain from doing so. Instead, I invite you to consider the benefits of this lease option and how it may be the best choice for your unique situation. Thank you for respecting my request.
Originally Posted by SW20S
But at least you were just able to give it back!
The more expensive the cars get, the harder it is to accomplish this.
Did you miss where I told everybody they should listen to you even though we disagree on the security of a one pay lease? In case you missed it, here it is:
And my response to your follow up:
I think you need to check your narcissism here. Nobody is challenging you on anything, certainly not me. How can I be challenging your credibility when I told everybody to listen to you and that I couldn't have said what you said any better myself? People who discuss what you are talking about and offering other points of view are not challenging you or your credibility...its a discussion forum. Your POV and experience is not the only one that exists. I have also been leasing cars for 20+ years and have spent a lot of time doing research and have a lot of experience also. You are not the only person who has done research and has experience in this.
I don't have to bring anything to a discussion with you. I have been nothing but respectful and kind towards you, but you seem to want to attack me for having a viewpoint that only slightly differs from yours. Give it a rest. Read everything you just said to me and apply it to yourself
Yes...yes you do.
Thats the issue. the depreciation on this car is so steep, its way more than other cars he has dealt with. He is a member at ClubLexus and this is the first really expensive car he has leased I believe. Its much harder to accomplish what he has accomplished in the past on flagship cars. Before I moved up to this class I ALWAYS traded out and made money, but I haven't made money on any of the flagship cars I have traded out of, I have broken even. Right now if I wanted to trade out of my S560 I would be upside down. His previous car was a Lexus ES, well yeah the last Lexus ES I had I made $4k on when I traded it in. I made $4k on my Chrysler Pacifica when I traded it in last month. MUCH harder to do on cars with much steeper depreciation curves.
My goal with this style car is to break even when I trade, so that my only costs have been my monthly payments. Not gonna make money trading in an EQS lease.
Upon reviewing our previous conversations, I realized that our primary disagreement occurred on a different forum, not on this one as I had initially thought. I appreciate you for jogging my memory and outlining your thoughts on my progression. However, this does not mean that I do not stand behind my point of view regarding your approach on this forum or that similar incidents have not occurred here to some extent. I acknowledge my missteps and appreciate the clarity you have provided.
I do not believe in bringing conversations from other sites into a different forum to bolster my stance, at least not as directly as you did, nor would I make it personal. I want to express my gratitude for the effort you've made in highlighting your similar achievements and experiences to mine. I just want to highlight that I have been nothing but transparent in my approach, providing unequivocal support for all of my claims. They do say imitation is the sincerest form of flattery, but now I'm just being facetious.
In my attempts to inform and offer other points of view, if it appears narcissistic, I suppose that since you align yourself with me on many occasions, then that makes us both. So you should have no problem understanding where I am coming from, right? However, I won't attempt to convince anyone reading this of my stance or character. I let it go on for too long, and I recognize the futility of my efforts. I will try not to make the same mistake again. This will continue incessantly if it isn't stopped here. You are more than welcome to have the last word so as to have the opportunity to refute anything I've said. I'm bowing out.
I acknowledge my failure to realize the futility of certain discussions with you. It was my responsibility to recognize the signs, but I failed to do so. This is a forum for car enthusiasts, not a platform for pointless arguments. I apologize to anyone who had to endure my rant. I assure you that I will try to restrain myself in the future.
"Now where are my car keys, time to go for a drive, it's way more fun than doing this!"
Cash is king in my book. There's a lot of variables and creativity with leasing vs. cash or financing. Negotiate a good deal for a brand new one, or buy a CPO or demo fully loaded car. For me, the fun is in the search. The tech and gadgets of a fully loaded vehicle typically keeps me happy for years beyond the point where cars selling for more than my old car still don't have the features or drive as nice. I like maintaining my vehicle. Get an extended warranty or get it fix myself. I learn a lot about the technical inner workings of the brand and the car itself. As the car age, I appreciate its design and engineering. Hence, leasing is not for me.
With lease, you get a new vehicle every 3 years, wash your hands, and move on to the next thing. No need to learn about the technical aspect of the engineering. No need to maintain it in the traditional sense. No long commitment. That might work for some people but not for me. Unless you negotiate a good deal on a lease, those bean counters at the dealers usually has the upper hand for most lease deals. You really can't get something for nothing unless you are like J_Boxer and some other "expert" leasees. Sure, sometimes you might make a few grands if the market is on your side toward the end of your lease. A few grand is a drop in the bucket for me. I'd rather use it toward a longer commitment strategy.
If you are happy driving the same car for a long time, then go for it. I just don’t want to drive the same car for more than 3-4 years tops. Because of that buying makes no sense for me at all, plus I own a business and the whole lease is tax deductible. Can deduct a purchase too but it’s less lucrative and less straightforward.
As for cash is king, I leave my cash invested and earning money. Makes no sense to take $130,000 out of performing investments and buy something that will be worth $65,000 in 6 months…that’s a staggering loss.
I think the first EQS deliveries happened in 02/2022 in the US. If 9 out of 10 were a lease, that means in 2 or 3 months the lease returns of the EQS will flood the market?
11-03-2023, 03:51 PM
