Right. Take the buyout and finance it. Smart move.

 

The leasing company does not have to provide a buyout. Audi used to only allow buyouts from a dealer as a trade-in. The time to research a lease is before you sign, not after.

 

You can buyout any lease. Buyout is residual plus remaining lease payments, plus tax. Not worth doing to convert to finance.

 

Correct. MBFS actually has a an option for payoff amount in the login for leased vehicles so if you want to write a check and buy it out, you can.

 

You are writing a check for the interest and taxes. You are not getting out of the 10% money factor. Might as well make payments.

 

Didn't say it was the best deal but it IS an option. Either way, OP is in a box and won't be easy to get out.

 

I don’t understand why these are so terrible to lease. To clarify, a vehicle with such a strong residual value, SHOULD be the ideal vehicle to lease, right? Heck, there are 2019 Gs selling on cars.com for their original MSRP (or very close to).

A main benefit in leasing (yes, there can be many) is that you are (theoretically) only paying for the depreciation that you cause, based on the terms of the lease.

The stronger the residual value, the more attractive the lease SHOULD be. However, I think with the G’s high demand and the dealers limited supply, they pad the heck out of those lease numbers.

I have seen a few people post their lease quotes and I could not find value in any of them. (Of course each person situation is unique...states vary on sales tax rules, tax-deductibility, etc...)

IMO, finance the rig, you can always sell it if you want. Yes, if it is an open-end lease (which someone previously mentioned that all Mercedes leases are) you can buy it out, however your lease payments are going towards the high money factor.

Also, interest rates are dirt cheap. I financed 70k of my G at 1.79%...I hate debt and would prefer not to have a loan, but at that rate, it doesn’t make a lot of sense to pay it off.

The nice thing about a forum is we all have our own opinions. . Good luck on your purchase.

Remember, once you know the money factor, multiple that by 2400 to find out the interest rate you are paying. I swear dealers invented “money factor” to further confuse their clients. The dealer may say, “The rate is .0025!” Sounds low, right? Unfortunately, .0025*2400=6%. However, the dealer will never present a money factor using a standard interest rate (because too many people would know they are getting ripped off).

 

If you're leasing a vehicle, why do you care what the residual value is? The lessor picks a value and writes up the lease according to its statistics. I don't know anyone who negotiates what the residual value 5 years from now SHOULD be, and lessors don't revise the lease's residual value each year based on market conditions. So it is what it is. The point everyone in this thread has been making is that at the end of 5 years, instead of OWNING a vehicle worth perhaps $100K, you own nothing, and it will cost you another $70K to get the title. That's a difference of $170K, while the 60 monthly payments are about the same. Rock bottom interest rates have turned the lease versus buy decision upside down. Back when rates were 6% - 8%, leasing was a way to get into a luxury ride that you couldn't otherwise afford. But now with rates available south of 2% (and some dealers are still offering 0% on some models (not Gs)), leasing seems to be a hard sell. Even if you want to trade every 3 years, you still accumulate some equity on a 5 year loan. But we're trending toward a subscription economy where nobody owns anything. Everyone pays a monthly fee for everything they consume, so leasing cars, homes, furniture, recreational gear, etc. avoids ownership, and subscribing to food delivery, entertainment, media, dating, healthcare, etc. avoids decision-making.

 

The residual value is the value of the car at the end of the lease term. That could be kind of important if someone wanted to buy their car at the end of the lease....otherwise the dealer screws you once, with the money factor and a second time, with their created residual value price.

I didn’t say that you need to negotiate it, although it would be beneficial if you could. Vehicles with high residuals mean that they hold their value well, typically that would equal a lower lease payment.

Maybe some people don’t care, but not everyone walks away from a lease at the end of the term....if purchasing at the end of the lease is a possibility, knowing the residual value would be useful, as that is what you would pay the dealer to own the car.

I agree with the rest of your post...that is why I was also saying to purchase the vehicle rather than lease...

 

I think the problem is people not realizing that a lease is just as negotiable as a purchase. Of course the dealer is going to try to knock your dick in the dirt on the first pencil. Leasing makes a vehicle easier to write off, and save a good chunk on sales tax. Owning a depreciating asset isn't always the smartest route.

 

The residual value is only important if you are a payment buyer. You have the option to buy the car and sell it if the vehicle is worth more than the residual, or turn it in if it is worth less. Its kind of a hedge against unknown depreciation.

 

The good news is that I can always finance the car and step out of the lease and Into a finance. Now I will start calling different banks and credit unions such as Logix and Ally I heard these are 2 good ones. 72 months at 2% would be great but I’m thinking it will be in the mid 3’s for an amount over $200k no?

 

If your FICO is 800+ you should qualify for 2% - the Fed has declared money is worthless, and with trillions being dumped into the economy, $200K should be worth half as much in 6 years. Shop around - a forum post several weeks ago reported nearly 100% financing at 2%.

 

Exactly what I was trying to say but probably wasn’t clear on. I realized that even with this considered, leasing this particular car is still not a good idea. I will purchase the car and try to find a bank who will give me a 2% rate at 72 months.

thanks for all the input.

 

2% at 72 months and 100% financing is amazing. Would you have any idea which bank that would be? I need to shop around. My transunion score was above 800 but the 2 others were around 780.

 

https://mbworld.org/forums/g-class-w...t=Credit+union

 

I was 2.9% for 60 months, FICO was 795, so just under 800. But it was through the dealer, which is pretty good.

They used Huntington Bank which is more of a regional bank here in the mid-west.

 

I got 72 month financing at Bank of America at 2.09% APR for just over $130K loan. I sold my previous G wagon and used that as the down payment for my 2021 G63 and financed the rest.

 

Yea, I did thee same. trade my 2020 F250 in for 70k (paid 74) 1.5 years ago, so got a decent tax credit, then put some cash down and financed 140k for 60 months.

 

I did American 1 credit union in Michigan although I live in NC. I don’t think they will finance 200k but I financed $115k over 6 years at 1.59 percent. I think they are running at 1.99 right now.

 

Or if you plan on buying at the end of your lease...

 

Thanks for all the input guys.

After reading all the posts it seems like I may have gotten screwed with the money factor. This is something I know nothing about but my monthly payments don’t make sense to be this high.

I am just praying I really don’t get screwed by having to pay all the lease payments in order to buy out the car. I have purchased leases before and that was not the case. There was always a buyout cost and it would go down every month after I would make a payment.

 

Back to your opening post, where is your accountant amid all this buy verses lease rhetoric?

 

If the accountant was worth anything this sub wouldn't be where it is. A decent accountant would have cleaned this mess up.

 

I am a bit late to the party, but I have a counterpoint to leasing one of these. Dealer wholesale on a '20 G63 right now is about $197K, way over sticker. The $25K markup does play a factor in the OP's situation, but essentially could still be covered on the back end for the most part.