Better to finance or lease a G63?
Thread Starter
Newbie
Joined: Aug 2020
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Ferrari 488 GTB
Better to finance or lease a G63?
I have a G63 on order that should be coming in about a month. I'm debating if I should finance or lease the SUV. I own a business, so leasing would be attractive for tax write-offs. However, with the high demand and mark ups for the G63, financing would give me the option to sell it and possibly make some profit if needed. I was planning on leasing it initially, but the dealer told me most people finance the G63 just for that reason. What does everyone think?
Thanks!
Thanks!
Senior Member
Joined: Sep 2005
Posts: 432
Likes: 40
From: Savannah GA
2020 G550
Not knowing your tax situation, money factor, residual, potential finance rates, etc.. makes it difficult to answer.
I personally rarely lease vehicles. Every time I’ve run the numbers it doesn’t make sense for me.
Knowing that these vehicles have such a great resale right now, if you plan on being in the truck less than 2 years, I would personally finance it.
I personally rarely lease vehicles. Every time I’ve run the numbers it doesn’t make sense for me.
Knowing that these vehicles have such a great resale right now, if you plan on being in the truck less than 2 years, I would personally finance it.
MBWorld Fanatic!
Joined: Feb 2015
Posts: 1,640
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From: NC
2026 G63
I would finance because you can have a return of essentially all your money spent if you do it right.
Leasing you are paying for non existent depreciation. I wonder what residual they use and how they do it with a straight face. Even with tax deductions I imagine you come out ahead with financing.
Leasing you are paying for non existent depreciation. I wonder what residual they use and how they do it with a straight face. Even with tax deductions I imagine you come out ahead with financing.
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From: Washington DC
No more MB:(
MBWorld Fanatic!
Joined: Oct 2019
Posts: 5,152
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From: Colorado
G550
I have a G63 on order that should be coming in about a month. I'm debating if I should finance or lease the SUV. I own a business, so leasing would be attractive for tax write-offs. However, with the high demand and mark ups for the G63, financing would give me the option to sell it and possibly make some profit if needed. I was planning on leasing it initially, but the dealer told me most people finance the G63 just for that reason. What does everyone think?
Thanks!
Thanks!
Thread Starter
Newbie
Joined: Aug 2020
Posts: 9
Likes: 1
Ferrari 488 GTB
I do plan on running this by my CPA, but wanted to see what other owners were doing. Even if I do lease it, and the residual is much lower than actual market value after 3 years, I could sell it and make it up, no? I'm planning on using the G63 as my daily driver. I currently have a 488 GTB as my fun car.
Thanks!
Thanks!
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MBWorld Fanatic!
Joined: Feb 2015
Posts: 1,640
Likes: 826
From: NC
2026 G63
Trading it back in 1-2 years later with low miles (under 10k preferably from what dealers told me) and getting another one. Usually can get MSRP or very close back in trade.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
Thread Starter
Newbie
Joined: Aug 2020
Posts: 9
Likes: 1
Ferrari 488 GTB
Trading it back in 1-2 years later with low miles (under 10k preferably from what dealers told me) and getting another one. Usually can get MSRP or very close back in trade.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
Junior Member
Joined: May 2003
Posts: 45
Likes: 2
Trading it back in 1-2 years later with low miles (under 10k preferably from what dealers told me) and getting another one. Usually can get MSRP or very close back in trade.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
MBWorld Fanatic!
Joined: Nov 2012
Posts: 6,130
Likes: 1,117
A gaggle of MB's
1. YES - always check with your accountant about Section 179 Bonus Deduction with regards to your Business on Purchase
2. Best Purchase Plan is purchase at no higher than MSRP - and write a check with liquidity on hand - 2nd Best Purchase Plan is to purchase at no higher than MSRP then how much you leverage on a note and for what term (and MB is not the best finance house for G-notes) is based on Best Available Interest/Terms and NEVER agree to a interest-only-note and never agree to a note-with-prepayment-penalty
3. Frankly - for those paying Over-MSRP - consider that Market Adjustment as a Expense/not-to-be-recaptured.
4. Pre-Owned low mileage New Gen G's - especially G63's, 2nd G550's with AMG body package - are pulling very strong "wholesale auction" prices to non-MB dealer's - the Key is low mileage - you want to trade a New Gen back for the next New based on your mileage rather than time..
ALL my G customer forever have been Purchase Customers - ALL of my 19 customer have already gone forward either to 21's or 1st wave 22's - "my Winter/Spring 21's " customers will move to 22's - if the Market stays this strong the rest of my 21's will move to 23's - ALL existing G customer's of mine are sticking with having a G in their stable....
2. Best Purchase Plan is purchase at no higher than MSRP - and write a check with liquidity on hand - 2nd Best Purchase Plan is to purchase at no higher than MSRP then how much you leverage on a note and for what term (and MB is not the best finance house for G-notes) is based on Best Available Interest/Terms and NEVER agree to a interest-only-note and never agree to a note-with-prepayment-penalty
3. Frankly - for those paying Over-MSRP - consider that Market Adjustment as a Expense/not-to-be-recaptured.
4. Pre-Owned low mileage New Gen G's - especially G63's, 2nd G550's with AMG body package - are pulling very strong "wholesale auction" prices to non-MB dealer's - the Key is low mileage - you want to trade a New Gen back for the next New based on your mileage rather than time..
ALL my G customer forever have been Purchase Customers - ALL of my 19 customer have already gone forward either to 21's or 1st wave 22's - "my Winter/Spring 21's " customers will move to 22's - if the Market stays this strong the rest of my 21's will move to 23's - ALL existing G customer's of mine are sticking with having a G in their stable....
Junior Member
Joined: May 2003
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2. Best Purchase Plan is purchase at no higher than MSRP - and write a check with liquidity on hand - 2nd Best Purchase Plan is to purchase at no higher than MSRP then how much you leverage on a note and for what term (and MB is not the best finance house for G-notes) is based on Best Available Interest/Terms and NEVER agree to a interest-only-note and never agree to a note-with-prepayment-penalty
MBWorld Fanatic!
Joined: Oct 2018
Posts: 3,360
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From: Washington DC
No more MB:(
Trading it back in 1-2 years later with low miles (under 10k preferably from what dealers told me) and getting another one. Usually can get MSRP or very close back in trade.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
Member
Joined: Oct 2011
Posts: 192
Likes: 44
2022 Shark Blue GT3, 2024 Shelter Green Raptor R
Trading it back in 1-2 years later with low miles (under 10k preferably from what dealers told me) and getting another one. Usually can get MSRP or very close back in trade.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
A number of people on this forum have gotten new ones each year—hoping to do the same myself next year.
MBWorld Fanatic!
Joined: Oct 2019
Posts: 5,152
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From: Colorado
G550
If OP purchases through the business and claims the 179 rule, trading in after two years will likely force OP to pay recapture on the write off. Not a great plan. 179 best used if you keep the truck for at least 5 years I think. If purchased personally then frequent trades can work with a G.
MBWorld Fanatic!
Joined: Nov 2012
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A gaggle of MB's
With regards to Section 179 - which is also called "Bonus Depreciation" - a Business Owner/Principal should ONLY go by the advice/recommendation of his Accountant/Tax-Adviser.
If qualified for Sec 179 by your Accountant - the most "general interpretation" is that Sec 179 Bonus Depreciation can be up to a added $25,000 1st year based on claimed 100% Business Use.
Section 179 is "One Time Bonus Depreciation" specifically for that acquisition year - based on acquisition before last day that taxable year - and NO you are not required to Own/Hold "2Yrs" etc.
If qualified for Sec 179 by your Accountant - the most "general interpretation" is that Sec 179 Bonus Depreciation can be up to a added $25,000 1st year based on claimed 100% Business Use.
Section 179 is "One Time Bonus Depreciation" specifically for that acquisition year - based on acquisition before last day that taxable year - and NO you are not required to Own/Hold "2Yrs" etc.
MBWorld Fanatic!
Joined: Oct 2019
Posts: 5,152
Likes: 1,766
From: Colorado
G550
With regards to Section 179 - which is also called "Bonus Depreciation" - a Business Owner/Principal should ONLY go by the advice/recommendation of his Accountant/Tax-Adviser.
If qualified for Sec 179 by your Accountant - the most "general interpretation" is that Sec 179 Bonus Depreciation can be up to a added $25,000 1st year based on claimed 100% Business Use.
Section 179 is "One Time Bonus Depreciation" specifically for that acquisition year - based on acquisition before last day that taxable year - and NO you are not required to Own/Hold "2Yrs" etc.
If qualified for Sec 179 by your Accountant - the most "general interpretation" is that Sec 179 Bonus Depreciation can be up to a added $25,000 1st year based on claimed 100% Business Use.
Section 179 is "One Time Bonus Depreciation" specifically for that acquisition year - based on acquisition before last day that taxable year - and NO you are not required to Own/Hold "2Yrs" etc.
MBWorld Fanatic!
Joined: Oct 2018
Posts: 3,360
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From: Washington DC
No more MB:(
It's been a couple years since I last looked at Section 179, but I seem to recall that write-offs are limited to profitability, and you can't use it to make your red ink more red. If Covid has pushed your business into loss territory, Section 179 might have limited value. Those more knowledgeable please comment.
Member
Joined: Nov 2019
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Likes: 30
2020 G63, 2016 Range Rover LWB
Buy a 170k vehicle greater than 6000 gvwr. If use it 80 percent for business and do 100 percent accelerated first year depreciation, you would write 136k (80 percent of 170k) off your taxes for only that one calender year. No future depreciation on the truck after year one. If 35 percent tax bracket then would save you about 47.6k.
Vehicle value per the IRS then becomes 34k (170-136k). If sell it at any point for more than 34k, you are responsible for paying taxes on the difference. If you plan on keeping for 5 plus years it is a great option. Shorter time not so much. Accelerated 100 percent depreciation option ends in 2022 I think unless Congress renews it so will not be an option much longer unfortunately.
Vehicle value per the IRS then becomes 34k (170-136k). If sell it at any point for more than 34k, you are responsible for paying taxes on the difference. If you plan on keeping for 5 plus years it is a great option. Shorter time not so much. Accelerated 100 percent depreciation option ends in 2022 I think unless Congress renews it so will not be an option much longer unfortunately.
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From: Colorado
G550
Correct. I used it once. I'm not familiar with the details since I basically turn everything over to my accountant but to my understanding while there is no "formula" the numbers have to make sense. You can't write off a 150K truck with business that grosses 175K, or as you stated is bleeding red. This could flag and become a problem.
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Joined: Oct 2018
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From: Washington DC
No more MB:(
This is a tax matter where I would use extreme caution. I would never use Section 179 as the "can I afford this ride" decision factor. Triggering an IRS audit (which I've heard described as "a pre-mortem autopsy") through agressive use of 179 can ruin your day or worse. An acquaintence of many years ago is currently a guest of the Federal Corrections Agency for playing loose with IRS rules. For a non-industrial business vehicle that's indistinguishable from a personal vehicle, I'd rather buy it myself and bill my company 56 cents a mile for business use. This might not minimize my tax obligation, but it would maximize my sleeping hours, and keep my life simple.
Super Member
Joined: Oct 2007
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CLK 55 AMG 2005 and CLK 63 AMG cab.2007 - 2009 EVO - 2013 ML63 AMG - 2018 G63 AMG
Questions for u guys.
i bought my last G all cash.
but just ordered a new one and asking myself: how much do you guys put cash and finance at what % how many year?
im thinking i might do 50% cash 50 finance at 4% for 5 years. And would probably keep the G63 3 years for a new one.
wondering what you guys do.
i bought my last G all cash.
but just ordered a new one and asking myself: how much do you guys put cash and finance at what % how many year?
im thinking i might do 50% cash 50 finance at 4% for 5 years. And would probably keep the G63 3 years for a new one.
wondering what you guys do.
MBWorld Fanatic!
Joined: Oct 2019
Posts: 5,152
Likes: 1,766
From: Colorado
G550
Questions for u guys.
i bought my last G all cash.
but just ordered a new one and asking myself: how much do you guys put cash and finance at what % how many year?
im thinking i might do 50% cash 50 finance at 4% for 5 years. And would probably keep the G63 3 years for a new one.
wondering what you guys do.
i bought my last G all cash.
but just ordered a new one and asking myself: how much do you guys put cash and finance at what % how many year?
im thinking i might do 50% cash 50 finance at 4% for 5 years. And would probably keep the G63 3 years for a new one.
wondering what you guys do.
MBWorld Fanatic!
Joined: Feb 2015
Posts: 1,640
Likes: 826
From: NC
2026 G63
Between trade in and down payment I paid for 33% at delivery. Financed the rest over 72 months at 1.59% through American 1 credit union.
That rate expired in early January, but I think they are still doing 1.99 percent for up to 72 months.
That rate expired in early January, but I think they are still doing 1.99 percent for up to 72 months.
